Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger. (a) Between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shall: (i) amend or otherwise change its Certificate of Incorporation or By-Laws or any similar governing instruments; (ii) issue, deliver, sell, pledge, dispose of or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan); (iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company); (iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries; (v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof; (vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts; (vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract; (viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule; (ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise; (x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule; (xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto; (xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund; (xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008; (xiv) waive any right of value material to the Company or any subsidiary of the Company; (xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent; (xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice; (xvii) materially change any of its business policies; (xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or (xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii). (b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange. (c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 2 contracts
Sources: Merger Agreement (Jekogian Iii Nickolas W), Merger Agreement (Wilshire Enterprises Inc)
Conduct of Business Pending the Merger. Section 5.1 SECTION 4.01. Conduct of Business of by the Company Pending the Merger.
(a) Between . 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 or the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent agree in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) and except as set forth in Section 4.01 of the Company Disclosure Schedule, the Company shall conduct its business and shall cause the businesses of its subsidiaries to be conducted only the ordinary course of business; and the Company shall use reasonable commercial efforts to preserve substantially intact in all material respects the business organization of the Company and its subsidiaries, to keep available the services of the present key officers, employees and consultants of the Company and its subsidiaries shall be conducted in its ordinary course and to preserve the present relationships of business and the Company shall use and its reasonable best efforts to preserve substantially intact its business organizationsubsidiaries with customers, suppliers and material business relationships, (B) other persons with which the Company shall perform or any of its obligations under subsidiaries has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, and (C) without limiting the foregoing, 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 the Effective Time, and except as set forth in Section 4.01 of the Company Disclosure Schedule, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent, which in the case of clauses (c), (e), (g), (h) and (i), which will not be unreasonably withheld, delayed or conditioned:
(ia) amend or otherwise change its Certificate of Incorporation the Company's Charter Documents or By-Laws or any similar governing instrumentsthe Subsidiary Documents except as contemplated by this Agreement;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of its capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rightsphantom interest) in the Company, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for (A) the issuance of shares of Company Common Shares upon the exercise of Stock issuable pursuant to Company Stock Options or in connection with other stock-based awards outstanding as of on the date hereof, (B) the issuance of this Agreement, in each case, shares of Company Common Stock pursuant to any employer stock fund under any Company Benefit Plan or the Company's Employee Stock Purchase Plan in accordance with their respective terms as in effect on the terms date hereof, (C) the issuance of any Company Stock Option Plan, or Options in the ordinary course and consistent with past practice and (BD) issuances in accordance with the Rights Plangranting of Company Stock Options pursuant to written offers of employment that were extended prior to 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, (ii) dispositions of obsolete assets or assets no longer useful to the Company in its business and (iii) sales of assets which are not, individually or in the aggregate, material to the Company and its subsidiaries, taken as a whole);
(i) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a wholly owned subsidiary of the Company may declare and pay a dividend to its parent that is not a cross-border dividend (except as provided in clause (ii) below), (ii) declare or otherwiseallow any subsidiary of the Company to declare cross-border dividends, with respect or make or allow any subsidiary of the Company to make cross-border capital contributions, in an amount that exceed $250,000 individually or $500,000 in the aggregate; (iii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; (iv) except for as required by the terms of any dividend security as in effect on the date hereof, and except to the extent necessary to effect any right of a grantee to have shares of Company Common Stock withheld to meet minimum tax withholding obligations in connection with any equity award under any Company Employee Plan that is outstanding and in effect on the date of this Agreement, amend the terms or distribution by a change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary to amend the terms or change the period of exercisability of, 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 any such securities; or (v) settle, pay or discharge any claim, suit or other action brought or threatened against the Company with respect to the Company or another wholly owned subsidiary arising out of a stockholder's equity interest in the Company);
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or other business organization or division thereof;
(vi) sell , or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assetsequity interest therein, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth those listed on Section 3.8 4.01 of the Company Disclosure Schedule;
; (ixii) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, except for borrowings and reborrowings under the Company's or any of its subsidiaries' existing credit facilities listed on Section 2.05 of the Company Disclosure Schedule and other borrowings not in excess of $500,000 in the aggregate, or issue any debt securities or assume, guarantee (other than guarantees of the Company's subsidiaries entered into in the ordinary course of business) or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loansloans or advances, advances or capital contributions to except in any other person (other than a subsidiary of the Company), in each case, other than such case in the ordinary course of business consistent with past practice, business; (iii) authorize any capital expenditures or purchases of fixed assets other than pursuant to letters the Company's existing capital expenditures budget, a copy of credit which has been delivered to Parent, except for capital expenditures or otherwisepurchases which are, in the aggregate, not in excess of $1,000,000, and except for the repair or replacement of damaged assets from the proceeds of insurance with respect thereto; or (iv) enter into or materially amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.01(e);
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Ai) increase the compensation or fringe benefits of any of severance payable or to become payable to its directors, officers or employees, except for increases in salary or wages of employees (except of the Company or its subsidiaries in the ordinary course of business with respect to employees who are not directors or officers), business; (Bii) grant any severance or termination pay not provided for to any director, officer or employee of the Company or any of its subsidiaries (except to make payments required to be made under any Employee Benefit Plan, obligations existing on the date hereof in accordance with the terms of such obligations); (Ciii) enter into any employment, consulting employment or severance agreement with respect to which the total annual compensation or arrangement the aggregated severance payments exceed $150,000 with any prospective officer or employee of the Company or any of its present subsidiaries; (iv) enter into or former directors, officers modify any agreement with any director of the Company or other employees, except for offers any of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, its subsidiaries; (Dv) establish, adopt, enter into or amend any collective bargaining agreement, Company Employee Plan, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees or any of their beneficiaries, except, in each case of this clause, (x) as may be required by law or (y) as would not result in a material increase in the cost of maintaining such collective bargaining agreement, Company Employee Plan, trust, fund, policy or arrangement and would not otherwise impose any material respect restraint on the business or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 operations of the Company Disclosure Scheduleor any of its subsidiaries;
(xig) make take any action to change in any accounting principlespolicies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable), except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, law or GAAP;
(Ah) make any Tax tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigationUnited States federal, other than settlements state, local or compromises of litigation where non-United States tax liability if the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive effect thereof would be adverse in any right of value material respect to the Company or any subsidiary of the Company;
(xvi) adopt a plan of liquidation pay, discharge or resolutions providing satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except for the liquidationpayment, dissolution, merger, consolidation discharge or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than satisfaction in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than liabilities reflected or reserved against in the financial statements contained in the Company SEC Reports filed prior to the date of this Agreement or incurred in the ordinary course of business consistent with past practiceand except for any other payment, enter into any lease discharge or satisfaction in an amount not to exceed $75,000 in the aggregate, which settlement, discharge or satisfaction, in either such case, provides for a complete release for the Company and its subsidiaries and which imposes no obligation on the Company and its subsidiaries other than the payment of money as aforesaid;
(as lessor or lessee); sell, abandon or j) make any other disposition loan to any director, officer, employee or independent contractor of the Company or any of its assetssubsidiaries, properties with the exception of loans made in order to effect a cashless exercise of any Stock Option in accordance with its terms or businesses; grant the terms of the plan under which it was granted or suffer any Lien on any advances for expenses in the ordinary course of its assets, properties or businessesbusiness; or
(xixk) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.01(a) through Section 5.1(a)(xviii)(j) above.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 2 contracts
Sources: Merger Agreement (Autotote Corp), Merger Agreement (Scientific Games Holdings Corp)
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between The Company covenants and agrees that, during the period from the date hereof until the earlier of the Effective Time and the date, if any, on which this Agreement and the Effective Timeis terminated pursuant to Section 7.1, except as otherwise expressly contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 5.1(a) of the Company Disclosure Schedule, Schedule or as required by law Law, or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheldwriting, delayed or conditioned), (A) the business of the Company and its subsidiaries Subsidiaries shall be conducted in its ordinary course the Ordinary Course of business the Company’s Business, and in compliance in all material respects with applicable Law and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material to preserve its present relationships with customers, suppliers, employees, licensees, licensors, partners and other Persons with which it or any of its Subsidiaries has significant business relationshipsrelations.
(b) Without limiting the generality of the foregoing, (B) between the Company shall perform its obligations under date of this Agreement and the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 7.1, except as otherwise expressly contemplated by this Agreement, and (Cas set forth in Section 5.1(b) without limiting to the foregoingCompany Disclosure Schedule or as required by Law, neither the Company nor any of its subsidiaries shallSubsidiaries shall without the prior written consent of Parent:
(i) amend or otherwise change its Certificate of Incorporation the Company Charter or By-Laws Company Bylaws or any similar governing instruments;
(ii) issue, deliver, sell, transfer, pledge, redeem, accelerate rights under, dispose of or encumber encumber, or authorize the issuance, sale, transfer, pledge, redemption, acceleration of rights under, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests interest (including any phantom interest) in the Company or any voting securities of its Subsidiaries, except for the issuance of Shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date of this Agreement, and the acceleration of vesting of Options as contemplated by the Option Plans and the issuance of Company Common Stock pursuant to, and in accordance with, the ESPP;
(including but not limited to stock appreciation rightsiii) sell, phantom stock pledge, mortgage, dispose, lease, of or similar instruments)encumber any assets, tangible or intangible, of the Company or any of its subsidiaries (except for Subsidiaries or suffer to exist any Lien thereupon other than (A) sales of assets not to exceed $50,000 in the issuance aggregate and (B) sales of Common Shares upon products in the exercise of Options or in connection with other stock-based awards outstanding as Ordinary Course of the date Company’s Business;
(iv) with respect to Intellectual Property owned by the Company or any of this Agreementits Subsidiaries and with respect to any rights to Intellectual Property granted under any IP Contract, in each case(A) transfer, in accordance with the terms assign or license to any Person any rights to Intellectual Property, (B) abandon, permit to lapse or otherwise dispose of any Company Stock Option PlanIntellectual Property, (C) grant any Lien on any Intellectual Property, or (BD) issuances make any material change in accordance any Intellectual Property that reasonably could be expected to impair such Intellectual Property or the Company’s or its Subsidiaries’ rights with the Rights Plan)respect thereto;
(iiiv) (A) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a direct or otherwiseindirect wholly owned Subsidiary of the Company may declare and pay a dividend to its parent, with respect to (B) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (except for C) purchase, repurchase, redeem or otherwise acquire, directly or indirectly, or permit any dividend Subsidiary to purchase, repurchase, redeem or distribution by a subsidiary otherwise acquire, any of its securities or any securities of its Subsidiaries, or any option, warrant or right, to acquire any such securities, or propose to do any of the Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ivvi) reclassify, combine, split, subdivide, redeem, purchase or otherwise (A) (1) acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose any equity interest therein, in each case, with a value in excess of $10,000, (2) enter into any assetsnew line of business, other than sales development, testing or dispositions marketing of new products in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess Ordinary Course of the Company’s Business, (3) make any capital expenditure budget set forth on Section 3.8 contribution or investment in any joint venture, except as required pursuant to terms of a Material Contract in effect as of the Company Disclosure Schedule;
date of this Agreement, or (ix4) except for borrowings under the Company’s existing credit facilities, create any Subsidiaries; (B) incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible forfor (whether directly, contingently or otherwise), the material obligations of any person, or make any loans, advances or capital contributions to any other person Person (other than a subsidiary wholly-owned Subsidiary), except in the Ordinary Course of the Company’s Business; (C) enter into, renew, fail to renew, amend or terminate any material lease relating to real property (including any existing Material Real Property Leases); (D) adopt or implement any new stockholder rights plan; (E) authorize any capital expenditures or purchase of fixed assets which are in excess of $50,000, for the Company and its Subsidiaries taken as a whole, except as previously budgeted and set forth in each caseSection 5.1(b) of the Company Disclosure Schedule, other than in and taking into consideration all future plans regarding the ordinary course Company’s property, plant and equipment; or (F) enter into or amend any Contract, agreement, commitment or arrangement to effect any of business consistent with past practice, pursuant to letters of credit or otherwisethe matters prohibited by this Section 5.1(b)(vi);
(xvii) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation payable or fringe benefits of any of to become payable to its current or former directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers)employees, (B) hire or promote any person as or to (as the case may be) an executive officer or appoint any director of the Company, (C) hire or promote any employee below officer except to fill a vacancy in the Ordinary Course of the Company’s Business, (D) make or forgive any loan or advance to employees or directors (other than loans or advances of reasonable relocation and travel expenses in the Ordinary Course of the Company’s Business), (E) except as may be required by Law or existing written agreements, grant any severance or termination pay not provided for under to, or modify, amend, terminate or adopt, or promise to modify, amend, terminate or adopt, any Employee Benefit Plan, or any Contract, agreement or arrangement that would be a Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (DF) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonuscollective bargaining agreement, severance compensation plan, program or other amounts to plan, agreement, trust, fund, policy or arrangement for the benefit of any officer current or employee other than as set forth in Section 3.24 former directors, officers or employees of the Company Disclosure Schedule;
(xi) make Company, any change in any accounting principlesof its Subsidiaries, except as may be appropriate necessary to maintain proper qualification under the Code or other Law, (G) pay any discretionary bonuses to any officer of the Company, (H) make any awards of equity in the Company or any of its Subsidiaries or any rights to receive equity in the Company or any of its Subsidiaries, (I) amend any existing stock option or other equity-based compensation or enter into any agreement under which any stock option or other equity-based compensation would be required to be issued, except as permitted by Section 2.4, (J) except as set forth in writing by Parent for the express purpose of communications with employees of the Company or any of its Subsidiaries, make any representation or commitment to, or enter into any formal or informal understanding with any employee of the Company or any of its Subsidiaries with respect to compensation, benefits, or terms of employment to be provided by Parent, Purchaser, or any of their Subsidiaries at or subsequent to the Closing, or (K) materially change any actuarial assumption or other assumption used to calculate funding obligations with respect to any pension or retirement plan, or change the manner in which contributions to any such plan are made or the basis on which such contributions are determined, except, in each case, as may be required by Law;
(viii) take any action to change accounting policies or procedures (including procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable), change any material assumption underlying, or method of calculating, any bad debt contingency or other reserve, except in each case as required to conform to changes in statutory GAAP or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect theretoapplicable Law;
(xiiix) other than in the ordinary course of business make, change or revoke any material Tax election or, except as required by applicable lawLaw, (A) make any Tax election or change any method of Tax accounting, (B) enter into any settlement or compromise of any material Tax liability, (C) file any amended Tax Return with respect to any material Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or Tax, (F) claim or surrender any right to claim a material Tax refundrefund or (G) become a party to a transaction that constitutes a “reportable transaction” for purposes of Section 6011 of the Code and applicable Treasury regulations thereunder (or a similar provision of state Law);
(xiiix) settle or compromise any litigation, fail to pay material accounts payable and other material obligations in the Ordinary Course of the Company’s Business other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008those disputed in good faith;
(xivxi) waive materially accelerate the collection of accounts receivable, modify the payment terms of any right of value material to accounts receivable other than in the Company or any subsidiary Ordinary Course of the Company’s Business, or sell, securitize, factor or otherwise transfer any accounts receivable;
(xvxii) adopt a plan of liquidation complete or resolutions providing for the partial liquidation, dissolution, merger, consolidation consolidation, restructuring, recapitalization or other reorganization of the Company or any subsidiary of its Subsidiaries (other than the Merger or as expressly provided in this Agreement);
(xiii) (A) at any time within the 90-day period before the Effective Time, without complying fully with the notice and other requirements of the WARN Act or any comparable foreign, state or local Law, effectuate (1) a “plant closing” (as defined in the WARN Act or any comparable state or local law) affecting any single site of employment or one or more facilities or operating units within any single site of employment of the Company other than or any of its Subsidiaries; or (2) a “mass layoff” (as defined in the dissolution WARN Act or any comparable state or local law) at any single site of employment or one or more facilities or operating units within any inactive subsidiary single site of employment of the Company mutually agreed or any of its Subsidiaries, nor (B) otherwise terminate or lay off employees in such numbers as to by give rise to material liability under any applicable laws respecting the Company and payment of severance pay, separation pay, termination pay, pay in lieu of notice of termination, redundancy pay, or the Parentpayment of any other compensation, premium, or penalty upon termination of employment, reduction of hours, or temporary or permanent layoffs;
(xvixiv) except as may be required by generally accepted accounting principles(A) authorize, revalue enter into, renew, extend, terminate or amend, or waive, release or assign any portion material rights or claims with respect to (x) any Contract or arrangement with revenues or payments in excess of its assets, properties or businesses including, without limitation, $75,000 in any write-down of the value of any assets or any write-off of notes or accounts receivable, Contract year other than in the ordinary course Ordinary Course of business consistent with past practice;
the Company’s Business, unless such Contract or arrangement is terminable without payment or penalty upon the Company or its Subsidiaries giving no more than thirty (xvii30) materially change days’ notice, (y) any of its business policies;
joint venture, partnership or other similar arrangement, or (xviiiz) any Material Contract other than in the ordinary course Ordinary Course of business consistent the Company’s Business, or (B) engage in any transaction or series of transactions with past practice, enter into any lease (as lessor Affiliate which would constitute a related party transaction under the rules and regulations of the SEC or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; orthe Company’s policy governing such transactions;
(xixxv) agree to take or otherwise settle, compromise or otherwise resolve in whole or in part any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between litigation, actions, suits, actual, potential or threatened claims, investigations or proceedings, whether pending on the date of this Agreement and the Effective Timehereof or hereafter made or brought, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly which settlement or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that compromise would, or would reasonably be expected to, individually or in the aggregate, preventresult in (A) amounts payable to or by the Company or its Subsidiaries in excess of $30,000 or (B) any other administrative action brought by, materially delay or materially impede the consummation civil settlements with, any Governmental Entity;
(xvi) take any action that would reasonably be expected to result in any of the Merger conditions to the Offer set forth in Annex I not being satisfied;
(xvii) make any material change to timing or size of orders of product shipped to customers, trade, or distributors other than in the other transactions contemplated by this AgreementOrdinary Course of the Company’s Business; or
(xviii) authorize or make any commitment to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Pulmuone Cornerstone Corp), Merger Agreement (Monterey Gourmet Foods)
Conduct of Business Pending the Merger. Section SECTION 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between . From the date of this Agreement until the earlier of the Effective Time and the Effective Timevalid termination of this Agreement in accordance with Article VIII, except as otherwise contemplated by this Agreement, as required under the Management Agreements and the Franchise Agreements, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure ScheduleLetter, as required by law applicable Laws, as required by or unless to the extent commercially reasonable in response to any COVID-19 Measures (so long as the Company keeps Parent reasonably informed of, and to the extent reasonably practicable, consults with Parent prior to the taking of any material action with respect to such COVID-19 Measures) or as Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), (Aa) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to conduct the business of the Company and its subsidiaries in the ordinary and usual course of business and maintain the status of the Company as a REIT and shall use its commercially reasonable efforts to preserve substantially intact its business organization, organization and material business relationshipsrelationships with Governmental Entities, (B) the Company shall perform its obligations under this Agreementcustomers, suppliers, creditors, and lessors, and (Cb) without limiting the foregoing, neither the Company nor any shall not and shall cause each of its subsidiaries shallnot to:
(i) amend or otherwise change its Certificate the Company Charter or Company Bylaws or materially amend or otherwise materially change the applicable governing instruments of Incorporation or By-Laws or any similar governing instrumentssubsidiary of the Company;
(ii) issue, deliver, sell, pledge, dispose of or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any Person, corporation, partnership or other business organization or division thereof, in each case, except for (A) purchases of inventory and other assets (other than real property) in the ordinary course of business or pursuant to existing Contracts, (B) acquisitions or investments (other than real property) with a fair market value or purchase price not to exceed $5 million in the aggregate, or (C) any wholly owned subsidiaries of the Company;
(iii) grant, issue, sell, encumber, pledge or dispose of (or authorize the grant, issuance, sale, encumbrance, pledge or disposition of), any shares of capital stock, voting securities or other ownership interest, or any puts, calls, options, warrants, convertible securities or other rights or commitments of any kind to acquire or receive any shares of capital stock, any voting securities or other ownership interest (including stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except (a) for the issuance of Shares upon the vesting or settlement of Stock Units and PSUs outstanding on the date hereof pursuant to the terms of such Company Equity Awards as in effect on the date hereof, or (b) for any issuance, sale or disposition to the Company or a wholly owned subsidiary of the Company by any wholly owned subsidiary of the Company );
(iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except to satisfy applicable tax withholding upon the vesting of Restricted Stock or settlement of any Stock Units and PSUs outstanding on the date hereof, in each case, pursuant to the terms of such Company Equity Awards as in effect on the date hereof), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s wholly owned subsidiaries;
(v) except under the Company’s Credit Facilities, create or incur any Lien, other than Permitted Liens, in excess of $75 million of notional debt in the aggregate on any material assets of the Company or its subsidiaries, except for Liens that are required by or automatically effected by Contracts in place as of the date hereof;
(vi) make any loans or advances to any Person (other than the Company or any of its wholly owned subsidiaries);
(vii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any Person, corporation, partnership or other business organization or division thereof or otherwise sell sell, assign, exclusively license, allow to expire, or dispose of any assets, rights or properties other than sales (A) sales, dispositions or dispositions licensing of equipment and/or inventory and other assets, excluding real property, in the ordinary course of business or pursuant to existing Contracts, (B) assignments of leases or sub-leases, in each case, in the ordinary course of business in connection with dispositions of assets that are otherwise permitted hereunder, (C) sales of obsolete assets in the ordinary course of business, (D) sales among the Company and its wholly owned subsidiaries or among the Company’s wholly owned subsidiaries or (E) sales of the properties set forth on Section 5.1(vii) of the Company Disclosure Letter;
(viiviii) declare, set aside, make or pay, or set a record date for, any dividend or other than distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except (A) the payment of dividends on Company Preferred Stock in accordance with their respective terms as set forth in the Company Charter, or the redemption of Company Preferred Stock in accordance with its terms as set forth in the Company Charter, (B) for any dividend or distribution by a wholly owned subsidiary of the Company to the Company or any wholly owned subsidiary of the Company, (C) dividends or distributions declared, set aside or paid by the Company or any of its wholly owned subsidiaries to any venture partners in any joint venture pursuant to existing Contracts made available to Parent, and (D) for the declaration and payment by the Company of dividends or distributions in accordance with Section 6.17);
(ix) make or authorize any payment of, or accrual or commitment for, capital expenditures, except any such expenditure (A) within the thresholds set forth in Section 5.1(b)(ix) of the Company Disclosure Letter or as required pursuant to the Management Agreements or the Franchise Agreements in effect as of the date of this Agreement, (B) expenditures not in excess of $15 million (net of insurance proceeds) in the aggregate that the Company reasonably determines are necessary to avoid a material business interruption, maintain the ability to operate in the ordinary course, or maintain the safety and integrity of any asset or property in response to any emergency, force majeure event or unanticipated and subsequently discovered events, occurrences or developments, (C) paid by any wholly owned subsidiary of the Company to the Company or to any other wholly owned subsidiary of the Company or (D) for the maintenance and repair at existing Company Real Property in the ordinary course of business consistent with past practice;
(A) other than in the ordinary course of business, enter into any Contract that would have been a Material Contract under clauses Section 3.8(a)(i), Section 3.8(a)(ii), Section 3.8(a)(iii), Section 3.8(a)(iv), Section 3.8(a)(v), Section 3.8(a)(viii), Section 3.8(a)(ix), Section 3.8(a)(x)(B) or Section 3.8(a)(xiii) of Section 3.8(a) had it been entered into prior to this Agreement, amend or modify, or terminate any Material Contract other than (i) expirations and renewals of any such Contract in the ordinary course of business in accordance with the terms thereof, (ii) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other non-exclusive rights under Intellectual Property owned by the Company and its subsidiaries, (iii) any agreement among the Company and its wholly owned subsidiaries or among the Company’s wholly owned subsidiaries or (iv) the termination of any Management Agreement or Franchise Agreement in connection with the sale of a property otherwise permitted hereunder or a default by a counterparty thereunder or (B) amend or modify, or grant any material respect consent under, any ContractMaterial Contract relating to any joint venture;
(viiixi) authorize except for intercompany loans between the Company and any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 its subsidiaries or between any subsidiaries of the Company Disclosure Schedule;
(ix) except and for borrowings under insurance premium financings pursuant to insurance agreements in effect as of the Company’s existing credit facilitiesdate hereof or entered into in the ordinary course of business, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, endorse the obligations of any person, or make any loans, advances or capital contributions to any other person Person (other than a subsidiary of the Company), in each case, in excess of $1 million in the aggregate, other than (A) indebtedness for borrowed money incurred in the ordinary course of business under the Company’s revolving credit facilities and other lines of credit existing as of the date of this Agreement but in any event not to exceed $2 million in the aggregate at any time outstanding, (B) guarantees by the Company or any subsidiary of the Company of indebtedness of the Company or any other subsidiary of the Company the incurrence of which is not otherwise prohibited by this Agreement, (C) indebtedness incurred in connection with a refinancing or replacement of existing indebtedness (but in all cases which refinancing or replacement shall not increase the aggregate amount of indebtedness permitted to be outstanding thereunder and in each case on customary commercial terms consistent in all material respects with past practiceor more beneficial than the indebtedness being refinanced or replaced), (D) indebtedness incurred pursuant to letters of credit credit, performance bonds or otherwiseother similar arrangements in the ordinary course of business, (E) interest, exchange rate and commodity swaps, options, futures, forward contracts and similar derivatives or other hedging Contracts, which are (1) not entered for speculative purposes and (2) entered into in the ordinary course of business, or (F) indebtedness incurred among the Company and its wholly owned subsidiaries or among the Company’s wholly owned subsidiaries;
(xxii) except pursuant to any Company Plan in accordance with its terms as in effect on the extent required under any Employee Benefit Plan or as required by applicable lawdate of this Agreement, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers)employees, (B) grant any retention, change in control, severance or termination pay not provided for under to any Employee Benefit PlanCompany Employee, (C) establish, adopt, enter into into, amend or terminate any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employeesCompany Plan, except for offers of employment in connection with a replacement hiring as expressly permitted by this Section 5.1(b)(xii), (D) grant any compensation award (including equity or equity-based award), (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Plan, (F) accelerate the time of payment or vesting of any compensation, rights or benefits under any Company Plan, (G) terminate, hire or engage any employee, other than terminations for cause, or hiring or engaging employees in the ordinary course of business and consistent with past practice with employees who are not directors or officersto replace departed employees, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (EH) pay loan or become obligated to pay advance any bonus, severance money or any other amounts property to any present or former director, officer or employee other than as set forth in Section 3.24 of the Company Disclosure Scheduleor any subsidiary of the Company;
(xixiii) make any material change in any financial accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles GAAP or regulatory requirements with respect thereto;
(xiixiv) other than except in each case to the ordinary course extent the Company determines, after prior consultation with Parent, that such action is reasonably necessary to preserve the status of business or the Company as required by applicable lawa REIT, (A) make any Tax election or change to any material method of Tax accounting, (B) enter into make, change or revoke any settlement or compromise of any material Tax liabilityelection, (C) file surrender any amended Tax Return with respect to any Taxclaim for a refund of material Taxes, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating with respect to any material Taxes, (E) amend any material Tax or Return, (F) surrender any right to claim a any material Tax refund, (G) enter into any Tax Protection Agreement, (H) settle or compromise any material Tax liability, audit, claim, assessment or other proceeding, (I) seek any Tax ruling from any Tax authority or (J) consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment;
(xiiixv) enter into or amend any collective bargaining agreement with any labor organization or other representative of any Company Employees;
(xvi) other than any Transaction Litigation or any litigation related to Taxes or Tax matters, settle or compromise any litigation, other than settlements or compromises of litigation (A) where the amount paid (net of insurance proceeds receivable) does not exceed $250,000 or2.5 million in the aggregate (net of any insurance proceeds and indemnity, if greatercontribution or similar payments actually received by the Company or its subsidiaries in respect thereof), (B) where the total incurred cash reserve amount for is paid or reimbursed by an insurance carrier after any applicable deductible or a third party under an indemnity or similar obligation, or (C) does not impose any non-monetary relief or obligation on the Company and its subsidiaries (other than customary confidentiality obligations);
(xvii) merge or consolidate with any Person or adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of such matter, entity or otherwise change the form of legal entity of such entity;
(xviii) enter into any new line of business outside its existing business as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xivxix) waive any right of value material vote to approve or otherwise consent to the Company taking of any action, or fail to exercise any rights to veto or prevent, any action by any joint venture of the company or its subsidiaries that would be prohibited by this Section 5.1 if such joint venture was a subsidiary of the Company;
(xvxx) adopt take any action, or fail to take any action, which action or failure to act would reasonably be expected to cause the Company to fail to qualify as a plan REIT or any of liquidation its subsidiaries to cease to be treated as a partnership or resolutions providing disregarded entity for U.S. federal income tax purposes or as a Qualified REIT Subsidiary, a Taxable REIT Subsidiary or a REIT, as applicable; or
(xxi) agree, authorize or commit to do any of the liquidationforegoing actions described in Sections 5.1(i) through Section 5.1(xx). Notwithstanding anything to the contrary set forth in this Agreement, dissolutionnothing in this Agreement shall prohibit the Company or any of its subsidiaries, mergerin consultation with Parent, consolidation from taking any action, at any time or other reorganization from time to time, that in the reasonable judgment of the Board of Directors of the Company, upon advice of counsel, is reasonably necessary for any of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties subsidiaries to maintain its qualification as a REIT under the Code for any period or businesses including, without limitation, any write-down of the value of any assets portion thereof ending on or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree prior to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, including making dividend or other distribution payments to stockholders of the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange(in accordance Section 6.17) or otherwise.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 2 contracts
Sources: Merger Agreement (CorePoint Lodging Inc.), Merger Agreement (CorePoint Lodging Inc.)
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between From the date hereof until the earlier of (i) the Effective Time and (ii) the date of any termination of this Agreement and the Effective Timepursuant to Section 8.1, except as otherwise contemplated consented to by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which such consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed), and except as otherwise contemplated, required or permitted by this Agreement, (A) the Company shall conduct business of only in, and the Company and its subsidiaries Subsidiaries shall be conducted in its not take any action except in, the ordinary course of business consistent with past practice and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform use its obligations under commercially reasonable efforts to keep available the services of its current officers and employees and preserve, in all material respects, the current relationships of the Company with customers, suppliers, licensors, licensees, distributors and other Persons with which the Company has business dealings.
(b) Without limiting the generality of the foregoing, except as set forth in Section 6.1(b) of the Company Disclosure Letter or as otherwise contemplated, required or permitted by this Agreement, applicable Law or the terms of any Company Benefit Plan or as consented to by Parent in writing (such consent not to be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier of (i) the Effective Time and (Cii) without limiting the foregoingdate of any termination of this Agreement pursuant to Section 8.1, neither the Company nor shall not do any of the following and shall not permit its subsidiaries shallSubsidiaries to do any of the following:
(i) amend amend, or otherwise change propose to adopt any amendments to, the Company’s or its Certificate Subsidiaries’ respective certificate of Incorporation incorporation or By-Laws bylaws or any similar governing instrumentscomparable organizational documents;
(ii) authorize for issuance, issue, deliver, sell, pledgedeliver or agree or commit to issue, dispose sell or deliver (whether through the issuance or granting of or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities commitments, subscriptions, rights to purchase, convertible, exchangeable or other exercisable securities, rights of any kind to purchase or otherwise) any securities in respect of, in lieu of or in substitution for shares of its capital stock, voting securities or any other equity interests or Company Stock Rights or other interests or securities in Subsidiaries that would be Company Stock Rights if they were interests or securities in the Company;
(iii) acquire or receive redeem, directly or indirectly, or amend any securities in respect of, in lieu of or in substitution for shares of its capital stock, except to the extent that such acquisition or redemption is required pursuant to the terms of any Company Benefit Plan (as then in effect) or any agreement subject to any such Company Benefit Plan (as then in effect);
(iv) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock or other equity interests, split, combine or reclassify any shares of capital stockstock or other equity interests of the Company or its Subsidiaries, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any such shares of capital stock or other equity interests, or make any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom distribution in respect of such shares of capital stock or similar instruments)other equity interests;
(v) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereofSubsidiaries;
(vi) sell (A) except as reasonably necessary or otherwise dispose of (whether by mergerappropriate in order to comply with municipal platting, consolidation planning, construction and development codes or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions requirements in the ordinary course of business (but in no event for an amount that exceeds $100,000) incur Indebtedness for borrowed money or pursuant issue any debt securities except for loans or advances to or from Subsidiaries, or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, in each case, other than the incurrence of Indebtedness under, and in accordance with, the Existing Loan Documents secured solely by Owned Real Property, Leased Real Property or JV Owned Real Property in the ordinary course of business consistent with past practice (provided that, in the event that any borrowing will exceed $500,000 under any Existing Loan Document, the Company shall give Parent reasonable advance notice prior to the incurrence of any such Indebtedness), (B) make any loans or advances to any Person, make any material change in its existing Contractsborrowing or lending arrangements for or on behalf of any Person or enter into any “keep well” or similar agreement to maintain the financial condition of another entity, (C) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; (D) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any material Lien (other than Permitted Liens) thereupon; or (E) prepay any Indebtedness for borrowed money or issue or amend the terms of any debt securities of the Company or any of its Subsidiaries;
(vii) (A) enter into, adopt, amend, modify or terminate any employment, bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, severance or other Company Benefit Plan or employee benefit arrangement, agreement, trust, plan, fund, Contract or other arrangement for the compensation, benefit, or welfare of any current or former employee, director or consultant of the Company or any of its Subsidiaries, (B) otherwise take any action to cause to accelerate the payment, funding, right to payment or vesting of any compensation or benefits (except as required pursuant to this Agreement) or grant any increases to the compensation, severance or benefits of any current or former employee, director or consultant of the Company or any of its Subsidiaries or pay any bonus or special remuneration (whether in cash, equity or otherwise) to any current or former employee, consultant, independent contractor or director; (C) hire or terminate (without cause) any employee or service provider of the Company or its Subsidiaries with an aggregate annual compensation opportunity of $100,000 or more; or (D) appoint any Person to a position of executive officer or director of the Company or its Subsidiaries;
(viii) except as may be specifically required under a Company Benefit Plan, grant, confer, award, or modify the terms of any options, convertible securities, restricted stock, phantom shares, equity-based compensation or other rights to acquire, or denominated in, any of the Company’s or any of its Subsidiaries’ capital stock or other voting securities or equity interests (except as may be required by the terms of any unexercisable options or other equity awards outstanding on the date of this Agreement);
(ix) other than transactions required pursuant to existing Contracts as in effect on the date hereof and disclosed in the Company Disclosure Letter, (A) acquire, lease (as lessee) or license (as licensee) any property or assets; or (B) other than the sale of lots owned by the Company as of the date hereof in the ordinary course of business consistent with past practice, sell, lease (as lessor), license (as licensor) or dispose of any property or assets (including, for the avoidance of doubt, any Owned Real Property), in each case of clause (A) or clause (B), with an individual value greater than $100,000;
(x) except as may be required as a result of a change in applicable Laws or in GAAP, make any change in any of the accounting principles or practices used by it or fail to maintain all financial books and records in all material respects in accordance with GAAP;
(xi) (A) make, change or revoke any Tax election that would be reasonably expected to adversely affect in any material respect the Tax liability of the Company or any of its Subsidiaries, (B) change any material Tax accounting method, (C) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability, (D) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes, (E) file any amended material Tax Return with respect to any Tax, or (F) surrender any right to a refund of material Taxes;
(xii) (A) enter into, renew, extend or terminate (other than the termination or expiration of a Material Contract as in effect as of the date hereof pursuant to its terms) any Material Contract (or any Contract that would have been a Material Contract if it had been in effect on the date hereof, but specifically excluding any Material Real Property Leases), except in the ordinary course of business consistent with past practice with respect to (1) any such Material Contract described solely in clause (iv) of the definition of “Material Contract” or (2) subject to clauses (ix) and (xxi) of this Section 6.1(b), any sale agreement; or (B) make any material amendment or change to any such Material Contract (including any waiver, release, compromise or assignment of material rights or claims thereunder, but specifically excluding any Material Real Property Leases), except in the ordinary course of business consistent with past practice with respect to any amendment or change that would not itself alone result in such Contract being a Material Contract (other than pursuant to clause (iv) of the definition of “Material Contract”) and which amendment or change does not involve payments to or from the Company or any of its Subsidiaries of more than $200,000 during any twelve-month period;
(xiii) except as required by applicable Law, recognize or certify any labor union, labor organization, works council, or group of employees of the Company or its Subsidiaries as the bargaining representative for any employees of the Company or its Subsidiaries;
(xiv) except for the Litigation referred to in Section 6.6, settle or compromise any pending or threatened Litigation or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation, absolute or accrued, asserted or unasserted, contingent or otherwise, other than the settlement, compromise, payment, discharge or satisfaction of Litigation, claims and other liabilities that (A) are reflected or reserved against in full in the Company Financial Statements, (B) are covered by insurance policies or (C) otherwise do not involve the payment of money in excess of $150,000 in the aggregate, in each case where the settlement, compromise, discharge or satisfaction of which does not include any obligation to be performed by the Company or its Subsidiaries following the Effective Time;
(xv) enter into any Contract or arrangement between the Company or any of its Subsidiaries, on the one hand, and any Affiliates of Company (other than its Subsidiaries), on the other hand;
(xvi) fail to use reasonable best efforts to maintain in full force and effect the existing insurance policies or to replace such insurance policies with reasonably comparable insurance policies, to the extent available on commercially reasonable terms, covering the Company, its Subsidiaries and their respective properties, assets and businesses;
(xvii) form any new joint ventures or materially modify the terms of any existing joint ventures with third parties;
(xviii) amend or modify the compensation terms or any other obligations of Company contained in the engagement letter with JMP Securities LLC in a manner adverse to Company or any of its Subsidiaries or the Surviving Entity or engage other financial advisers in connection with the transactions contemplated by this Agreement or the Related Agreements;
(xix) other than in the ordinary course of business consistent with past practice, initiate or consent to (A) any material zoning reclassification of any Owned Real Property or Leased Real Property or (B) any material change to any approved site plan, special use permit, planned unit development approval or other land use entitlement affecting any Owned Real Property or Leased Real Property;
(xx) other than in the ordinary course of business consistent with past practice, enter into into, renew, modify, amend or amend in terminate, or waive, release, compromise or assign any material respect rights or claims under, any Contract;
Material Real Property Lease (viii) authorize or any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except lease for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 orreal property that, if greater, the total incurred cash reserve amount for such matter, existing as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008would be a Material Real Property Lease) or enter into any other lease of real property with a term in excess of one year;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviiixxi) other than in the ordinary course of business consistent with past practice, sell, license, mortgage, pledge, assign, transfer, dispose of, abandon, or encumber, or effect a deed in lieu of foreclosure with respect to, any Owned Real Property or other property or assets (except for Permitted Liens), in each case, with an individual value greater than $100,000 (or, in the case of Intellectual Property, that is material to the Company);
(xxii) enter into any lease new line of business;
(xxiii) (A) purchase any “non-core” asset or right (e.g., mineral rights, surface rights, multifamily or other developed residential or commercial property, real property held primarily for the purpose of resource extraction, groundwater leases or timberland assets) or any other asset or right not purchased in furtherance of the Company and its Subsidiaries’ core community development business or (B) invest or spend or commit to invest or spend any amounts with respect to such “non-core” assets other than as lessor may reasonably be required in the ordinary course of business consistent with past practice or lessee); sellto preserve the value of such assets or to prepare them for sale;
(xxiv) make, abandon authorize, enter into any commitment for, or make a capital contribution to any Joint Venture for, any new capital expenditure (such new capital expenditures being referred to hereinafter as the “Capital Expenditures”), other disposition than Capital Expenditures in the ordinary course of any business consistent with past practice for continuation of its assetsdevelopment of existing phases of Owned Real Property and JV Owned Real Property currently under construction and in an amount not to exceed, properties or businesses; grant or suffer any Lien on any in each case, 110% of its assetsthe aggregate budgeted amount as reflected in the applicable property level budget of the Company, properties or businessescopies of which are attached as Section 6.1(b)(xxiv) of the Company Disclosure Letter; or
(xixxxv) agree enter into a Contract to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Timeforegoing or make any formal or informal arrangement or understanding, the Company will timely file all reports required whether or not binding, with respect to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreementforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Forestar Group Inc.), Merger Agreement (Horton D R Inc /De/)
Conduct of Business Pending the Merger. Section 5.1 5.01 Conduct of Business of by the Company Pending the Merger.
(a) Between . The Company agrees that, from the date hereof until the earlier of the Effective Time and termination of this Agreement and the Effective Timepursuant to Article VIII, except as otherwise (x) required by applicable Law, (y) set forth in Section 5.01 of the Company Disclosure Schedule or (z) expressly contemplated or permitted by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), (Ai) the business businesses of the Company and its subsidiaries Group Companies shall be conducted in its the ordinary course of business and in a manner consistent with past practice, (ii) the Company shall use its commercially reasonable best efforts to preserve substantially intact its the assets and business organizationorganization of the Group Companies in all material respects, to keep available the services of the current officers and key employees of the Group Companies and to maintain in all material respects the current relationships of the Group Companies with existing customers, suppliers and other persons with which any Group Companies has material business relationships, relations as of the date hereof and (Biii) the Company shall perform its obligations under as promptly as practicable after the date hereof make the registrations set forth in Section 5.01(iii) of the Company Disclosure Schedule with respect to SAFE Rules and Regulations (or any successor law, rule or regulation). Without limiting the generality of the foregoing paragraph, from the date hereof until the earlier of the Effective Time and termination of this Agreement pursuant to Article VIII, except as (x) required by applicable Law, (y) set forth in Section 5.01 of the Company Disclosure Schedule or (z) expressly contemplated or permitted by this Agreement, and (C) without limiting the foregoing, neither the Company nor shall not and shall not permit any other Group Company to, directly or indirectly, do or propose to do any of its subsidiaries shall:the following without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(ia) amend or otherwise change its Certificate memorandum and articles of Incorporation association or By-Laws or any similar governing instrumentsequivalent organizational documents;
(iib) issue, deliversell, selltransfer, lease, sublease, license, pledge, dispose of of, grant or encumber encumber, or authorize the issuance, sale, transfer, lease, sublease, license, pledge, disposition, grant or encumbrance of, (i) any shares of capital stockany class of any Group Company (other than in connection with (A) the exercise of any Company Options or Company RSs in accordance with the Share Incentive Plan, ownership interests (B) the withholding of Company securities to satisfy Tax obligations with respect to Company Options or voting securitiesCompany RSs, (C) the acquisition by the Company of its securities in connection with the forfeiture of Company Options or Company RSs or (D) the acquisition by the Company of its securities in connection with the net exercise of Company Options in accordance with the terms thereof, or any options, warrants, securities convertible securities into any share capital or other rights of any kind to acquire any shares, or receive any shares of capital stock, any other ownership interests or any voting securities interest (including but not limited to stock appreciation rights, any phantom stock or similar instrumentsinterest), of the Company any Group Company) or (ii) any of its subsidiaries property or assets (except for (Awhether real, personal or mixed, and including leasehold interests and intangible property) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Group Company Stock Option Planwith a value or purchase price (including the value of assumed liabilities) in excess of $30,000,000, or (B) issuances except in accordance with the Rights Plan)ordinary course of business;
(iiic) declare, set aside, make or pay any dividend or other distribution, payable in cash, stockshares, property or otherwise, with respect to any of its capital stock shares (except for other than dividends or other distributions from any dividend or distribution by a subsidiary Subsidiary of the Company to the Company or another wholly owned subsidiary any of the Companyits other Subsidiaries);
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire acquire, directly or indirectly, any shares of its share capital stock or securities or other rights exchangeable into or convertible or exercisable for any of its share capital (other than the Company (except for purchase of Shares to satisfy obligations under the acquisition Share Incentive Plan, including the withholding of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Company Options or the lapse of restrictions Company RSs in respect of Restricted Shares pursuant to accordance with the terms and conditions of a such Company Stock Option PlanOptions or Company RSs (as applicable), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries);
(ve) make effect or commence any acquisition liquidation, dissolution, scheme of (whether by arrangement, merger, consolidation consolidation, amalgamation, restructuring, reorganization or acquisition of stock similar transaction involving any Group Company, or substantially all of create any new Subsidiary (other than creating any new Subsidiary in the assetsPRC by a Group Company that (i) is incorporated in the PRC and (ii) does not require any capital injection (directly or indirectly) from outside the PRC after the date hereof), or make any investment in any interest in, any corporation, partnership or other business organization or division thereofthan as contemplated by this Agreement;
(vif) sell or otherwise dispose of (acquire, whether by purchase, merger, consolidation consolidation, scheme of arrangement, amalgamation or disposition acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales securities or dispositions properties, in aggregate, with a value or purchase price (including the ordinary course value of business assumed liabilities) in excess of $30,000,000 in any transaction or pursuant to existing Contractsrelated series of transactions;
(viig) incur or guarantee any indebtedness for borrowed money of any person except for, the incurrence or guarantee of indebtedness (i) under any Group Company’s existing credit facilities as in effect on the date hereof in an aggregate amount not to exceed the maximum amount authorized under the Contracts evidencing such Indebtedness (including any renewal, extension, refinancing or replacement of such Contracts on substantially the same or similar terms) or (ii) not in an aggregate amount in excess of $10,000,000;
(h) other than expenditures necessary to maintain assets in the ordinary course of business good repair consistent with the past practice, enter into authorize, or amend make any commitment with respect to, any single capital expenditure that is in any material respect any Contract;
(viii) authorize any material new excess of $15,000,000 or capital expenditures which that are, in the aggregate, in excess of $30,000,000 for the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure ScheduleGroup Companies taken as a whole;
(ixi) except for borrowings under as required pursuant to any Company Employee Plan or this Agreement, (i) enter into any new employment or compensatory agreements (including the renewal of any such agreements), or terminate any such agreements, with any director, officer, employee or consultant of any Group Company other than the hiring or termination of employees or consultants below the vice president level or its equivalent (e.g. the head of business unit) or with an annual compensation of less than $150,000, (ii) grant or provide any severance or termination payments or benefits to any director or officer of any Group Company except as required by applicable Law, (iii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to any director or officer of any Group Company except such increases or payments, in the aggregate, do not cause an increase in the labor costs of the Group Companies, taken as a whole, by more than 5%, (iv) make any new equity awards to any director, officer or employee of any Group Company’s existing credit facilities, incur (v) establish, adopt, amend or modify in terminate any material respect in an manner adverse to the Company Employee Plan or materially amend the terms of any indebtedness for borrowed moneyoutstanding Company Options, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, (vi) take any action to voluntarily accelerate the obligations vesting of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except Company Options to the extent not already required under any Employee Benefit in the Share Incentive Plan or as required contemplated by applicable law, this Agreement or (Avii) increase the compensation or fringe benefits of forgive any of its loans to directors, officers or employees of any Group Company;
(except in j) issue or grant any Company Option or Company RSs to any person under the ordinary course of business Share Incentive Plan;
(k) make any changes with respect to employees who are not directors financial accounting policies or officers)procedures, (B) grant any severance including changes affecting the reported consolidated assets, liabilities or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any results of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 operations of the Company Disclosure Schedule;
(xi) make any change in any accounting principlesGroup Companies, except as may be appropriate to conform to required by changes in statutory or regulatory accounting rules or generally accepted accounting principles GAAP or regulatory requirements with respect thereto;
(xiil) enter into, amend, modify, consent to the termination of, or waive any material rights under, any Material Contract (or any Contract that would be a Material Contract if such Contract had been entered into prior to the date hereof) that calls for annual aggregate payments of $30,000,000 or more that cannot be terminated without material surviving obligations or material penalty upon notice of 90 days or less;
(m) enter into, amend, modify, consent to the termination of, or waive any material rights under, any Control Agreements (or any Contract that would be a Control Agreement if such Contract had been entered into prior to the date hereof), except as contemplated by Section 6.16 of the Company Disclosure Schedule or as necessary to satisfy the Reorganization Condition Actions (and not otherwise inconsistent with Section 6.16 of the Company Disclosure Schedule);
(n) enter into any Contract between the Company or any of its Subsidiaries, on the one hand, and any of their directors or executive officers, on the other hand, in each case required to be disclosed pursuant to Item 7B or Item 19 of Form 20-F under the Exchange Act (except as permitted under Section 5.01(i));
(o) terminate or cancel, let lapse, or amend or modify in any material respect, other than renewals in the ordinary course of business, any material insurance policies maintained by it that is not promptly replaced by a comparable amount of insurance coverage;
(p) commence any Action for a claim of more than US$30,000,000 (excluding any Action seeking for an injunctive relief or other similar equitable remedies) or settle any Action other than any settlement involving the payment of monetary damages not in excess of $30,000,000;
(q) permit any Intellectual Property owned by any Group Company to lapse or to be abandoned, dedicated, or disclaimed, fail to perform or make any applicable filings, recordings or other similar actions or filings, or fail to pay all required fees and Taxes required or advisable to maintain and protect its interest in each and every item of Intellectual Property owned by any Group Company;
(r) fail to make in a timely manner any filings or registrations with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(s) enter into any Contract involving the acquisition from another person or disposition to another person, directly or indirectly (by merger, license or otherwise), of assets or capital stock or other equity interests of another person that contains (i) a put, call or similar right pursuant to which any Group Company could be required to purchase or sell, as applicable, any equity interests of any person or assets that have a fair market value or purchase price of more than $30,000,000 or (ii) any earn-out or similar payment payable by any Group Company with a maximum potential earn-out or similar payment that, as reasonably estimated by the Company, individually, could reasonably be expected to result in payments by any Group Company of more than $30,000,000, to any Third Party (in the case of each of clauses (i) and (ii), other than Contracts in respect of acquisitions or dispositions of inventory, properties and other assets in the ordinary course of business);
(t) engage in the conduct of any new line of business material to the Company and its Subsidiaries, taken as a whole;
(u) make or change any material Tax election, materially amend any Tax return (except as required by applicable lawLaw), (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return material closing agreement with respect to any TaxTaxes, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) material refund of Taxes, settle or compromise finally resolve any litigation, other than settlements material controversy with respect to Taxes or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any method of its business policies;Tax accounting; or
(xviiiv) other than in the ordinary course of business consistent with past practiceannounce an intention, enter into any lease (as lessor formal or lessee); sellinformal agreement or otherwise make a commitment, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 2 contracts
Sources: Merger Agreement (Baring Asia Private Equity Fund v Co-Investment L.P.), Merger Agreement (Shi Yuzhu)
Conduct of Business Pending the Merger. Section 5.1 SECTION 5.01. Conduct of Business of by the Company Pending the Merger.
(a) Between Purchaser's Election Date. The Company covenants and agrees that, between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior election or appointment of Purchaser's designees to the date Board pursuant to Section 6.03 upon the purchase by Purchaser of this Agreementany Shares pursuant to the Offer (the "Purchaser's Election Date"), as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent agree in writing (which consent shall not be unreasonably withheldwriting, delayed or conditioned), (A) the business businesses of the Company and its subsidiaries the Subsidiaries shall be conducted in its 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 its the business organizationorganization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and material consultants of the Company and the Subsidiaries and to preserve the goodwill of those current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relationshipsrelations. By way of amplification and not limitation, (B) except as contemplated by this Agreement or as disclosed in Section 5.01 of the Disclosure Schedule, the Company shall perform its obligations under not, between the date of this AgreementAgreement and the Purchaser's Election Date, and (C) without limiting the foregoingdirectly or indirectly do, neither the Company nor or propose to do, any of its subsidiaries shallthe following without the prior written consent of Parent:
(ia) amend or otherwise change its Certificate the certificate of Incorporation incorporation or Byby-Laws laws or any similar governing instrumentsequivalent organizational documents of the Company or the Subsidiaries;
(iib) issue, deliver, sell, pledge, dispose of of, grant, encumber, or encumber authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of capital stock, ownership interests stock of any class of the Company or voting securitiesany Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instrumentsinterest), of the Company or any of its subsidiaries Subsidiary (except for (A) the issuance of Common Shares upon issuable pursuant to Options outstanding on the exercise of Options date hereof) or in connection with other stock-based awards outstanding as (ii) any assets of the date Company or any Subsidiary, except for sales of this Agreement, products in each case, the ordinary course of business and in accordance a manner consistent with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)past practice;
(iiic) 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 such declarations, set asides, dividends and other distributions made from any dividend or distribution by a subsidiary of the Company Subsidiary to the Company or another wholly owned subsidiary of the Company);
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options acquire, directly or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan)indirectly, or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesits capital stock;
(vi) make any acquisition of acquire (whether including, without limitation, by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or partnership, other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose any material amount of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) assets other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
business; (viiiii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, 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, advances or capital contributions to contribution to, or investments in, any other person (other than such of the foregoing as are made by the Company to or in a wholly-owned subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice practice; or (iii) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 5.01(e);
(f) increase the compensation payable or to become payable to its officers or employees, except for increases in accordance with past practices in salaries or wages of employees of the Company or any Subsidiary who are not directors officers of the Company or officersany Subsidiary, (D) 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 in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other amounts to plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee other than as set forth in Section 3.24 of the Company Disclosure Scheduleemployee;
(xig) make any change in tax election or settle or compromise any accounting principlesmaterial federal, except as may be appropriate to conform to changes in statutory state, local or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect theretoforeign income tax liability;
(xiih) 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 the ordinary course of business and consistent with past practice, of liabilities reflected or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where reserved against in the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company 1996 Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than subsequently incurred in the ordinary course of business and consistent with past practice;
(xviii) materially change settle or compromise any pending or threatened suit, action or claim which is material or which relates to any of its business policiesthe Transactions;
(xviiij) other than undertake any capital commitment not reflected in the ordinary course of business consistent Company's budget in an individual amount greater than $100,000 or, when aggregated with past practiceall other capital commitments not reflected in the Company's budget, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businessesin an aggregate amount greater than $1,000,000; or
(xixk) take or offer or propose to take, or agree to take in writing, or otherwise, any of the actions described in Section 5.1(a)(iparagraphs (a) through Section 5.1(a)(xviii).
(bj) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly Section 5.01 or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue which would result in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or conditions to the Offer not being satisfied (other transactions than as contemplated by this Agreement).
Appears in 2 contracts
Sources: Merger Agreement (McFarland Energy Inc), Merger Agreement (McFarland Energy Inc)
Conduct of Business Pending the Merger. Section 5.1 SECTION 6.01 Conduct of Business of by the Company Pending the Merger.
(a) Between . The Company agrees that, between the date of this Agreement and the Effective Time, except as required by Law, as otherwise specifically contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, Agreement or as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent agree in writing (which consent agreement shall not be unreasonably withheld, delayed withheld or conditioneddelayed), (A) the business businesses of the Company and its subsidiaries the Subsidiaries shall be conducted in its all material respects only 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 its the business organization, and material business relationships, (B) organization of the Company shall perform its obligations under 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 expressly contemplated by this Agreement, Agreement and (C) without limiting Section 6.01 of the foregoingDisclosure Schedule, neither the Company nor any Subsidiary shall, between the date of its subsidiaries shall: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):
(ia) amend or otherwise change its Certificate Articles of Incorporation or By-Laws or any similar governing instrumentsBylaws;
(iii) issue, deliver, sell, pledge, dispose of of, grant or encumber encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any shares of capital stockstock of the Company or any Subsidiary, ownership interests or voting securities, any Company Stock Options or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), interest) of the Company or any of its subsidiaries Subsidiary (except for (A) the issuance of shares of Common Shares Stock upon the exercise of outstanding Company Stock Options or in connection with other stock-based awards outstanding as upon conversion of the date of this AgreementDebentures) or (ii) sell, in each casepledge, in accordance with the terms of any Company Stock Option Plandispose of, encumber, or authorize the sale, pledge, disposition or encumbrance of, any assets of the Company or any Subsidiary, except (Bx) issuances immaterial assets in accordance the ordinary course of business and in a manner consistent with the Rights Plan)past practice or (y) assets held for resale;
(iiic) authorize, 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 (stock, except for dividends by any dividend direct or distribution by a subsidiary of the Company wholly owned Subsidiary to the Company or another wholly owned subsidiary of the Company)any other Subsidiary;
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or that of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes any Subsidiary, other than in connection with the exercise of Options employee stock options or the lapse purchase of restrictions in respect stock of Restricted Shares LabOne of Ohio, Inc. from the Ohio Minority Holders pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of existing agreements with the Company’s subsidiariesOhio Minority Holders;
(vi) make any acquisition of acquire (whether including, without limitation, by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets)assets or any other business combination) any business, or make any investment in any interest in, any corporation, partnership or partnership, other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof ; (ii) repurchase, repay, cancel or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, 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, loans or advances or capital contributions to grant any other person (other than a subsidiary security interest in any of its assets, except for the Company), incurrence of any indebtedness that does not exceed $1,000,000 individually or $1,500,000 in each case, other than the aggregate and that arises in the ordinary course of business and is consistent with past practice, practice (which shall be deemed to include the renewal of and borrowings and repayments under the Credit Agreement); (iii) enter into any contract or agreement that requires the payment of more than $1,500,000 during the term of such contract or agreement other than contracts or agreements that are terminable pursuant to letters the terms of credit such contract upon not more than 90 days' notice without penalty (it being agreed and understood that retroactive price increases permitted under the terms of such agreement shall not be considered for purposes of determining the aggregate payments required under any such contract or otherwiseagreement or constitute a penalty under any such contract or agreement); (iv) (x) with respect to fiscal year 2005, authorize, or make any commitment with respect to, capital expenditures outside of the Company's fiscal year 2005 capital expenditure budget, attached hereto as Schedule 6.01(e), other than any individual capital expenditure in excess of $500,000 or aggregate capital expenditures in excess of $1,500,000 for the Company and its Subsidiaries, taken as a whole, and (y) with respect to fiscal year 2006, authorize, or make any commitment with respect to, capital expenditures, which in the case of any individual capital expenditure is in excess of $1,500,000 or which in the case of aggregate capital expenditures is in excess of $5,000,000 for the Company and the Subsidiaries, taken as a whole, in any fiscal quarter; 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); except in each case as may reasonably be required in connection with the construction of the Cincinnati Facility as disclosed in Section 6.01(e) of the Disclosure Schedule;
(xf) except to the extent required under any Employee Benefit Plan or in each case as required by applicable lawto comply with any Plan, (A) written policy or agreement in effect on the date of this Agreement that has been previously disclosed in writing to Parent, increase the compensation payable or fringe to become payable or the benefits of any of provided to its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment increases in the ordinary course of business and consistent with past practice with in salaries or wages of employees of the Company or any Subsidiary who are not directors or officersofficers of the Company or any Subsidiary, or grant any severance or termination pay to, or enter into any employment or severance agreement with (D) other than employment offer letters which do not provide for severance on termination provisions), any director, officer or other employee of the Company or of any Subsidiary, or establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other amounts to plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee employee;
(g) change any of the accounting principles, policies or procedures used by it other than as set forth in Section 3.24 of required by GAAP or applicable Law, which Law shall have been enacted or effective after the Company Disclosure Scheduledate hereof;
(xih) make make, revoke or change any change in any accounting principles, except as may be appropriate to conform to changes in statutory express or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any deemed Tax election or change any method of Tax accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigationmaterial liability with respect to Taxes, other than settlements consent to any material claim or compromises material assessment relating to Taxes or waive the statute of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount limitations for any such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008claim or assessment;
(xivi) waive subject to Section 6.01(e)(ii), pay, discharge or satisfy any right of value material to the Company claim, liability or any subsidiary of the Company;
obligation (xv) adopt a plan of liquidation absolute, accrued, asserted or resolutions providing for the liquidationunasserted, dissolution, merger, consolidation contingent or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivableotherwise), other than in the ordinary course of business and consistent with past practice;
(xviij) materially change amend or modify in any material respect or consent to the termination of its business policies;
(xviii) any Listed Contract, or waive in any material respect any rights of the Company or any Subsidiary thereunder, other than in the ordinary course of business and consistent with past practice;
(k) settle any material Action;
(l) sell, transfer, or grant any license or sublicense of, or execute any agreement with respect to, any right under or with respect to any material Intellectual Property held by the Company or any of its Subsidiaries or disclose any Intellectual Property held by the Company or any of its Subsidiaries in the form of confidential information to any third party, except in the ordinary course of business and consistent with past practice; or
(m) announce an intention, enter into any lease (as lessor formal or lessee); sellinformal agreement, abandon or otherwise make any other disposition of any of its assetsa commitment, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 2 contracts
Sources: Merger Agreement (Labone Inc/), Merger Agreement (Quest Diagnostics Inc)
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company Pending the Merger.
(a) Between agrees that, between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent agree in writing (which consent shall not be unreasonably withheldwriting, delayed or conditioned)except as expressly contemplated by this Agreement or described in Section 6.01 of the Disclosure Schedule, (A) the business businesses of the Company and its subsidiaries the Subsidiaries of the Company shall be conducted in its only in, and the Company and the Subsidiaries of 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 its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact its the business organization, and material business relationships, (B) organization of the Company and the Subsidiaries of the Company, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries of the Company and to preserve the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in this Section 6.01 shall perform its obligations under require the Company or the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by this Agreement, Agreement and (C) without limiting Section 6.01 of the foregoingDisclosure Schedule, neither the Company nor any Subsidiary of its subsidiaries the Company 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:
(ia) amend or otherwise change its Restated Certificate of Incorporation or By-Laws laws or any similar governing instrumentsequivalent organizational documents;
(iib) issue, deliver, sell, pledge, dispose of of, grant or encumber encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock, ownership interests stock of the Company or voting securitiesany Subsidiary of the Company, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instrumentsinterest), of the Company or any Subsidiary of its subsidiaries the Company (except for (A) the issuance of Common Shares upon securities issuable pursuant to the exercise of Options Warrants or in connection with other stock-based awards outstanding as of the date of this AgreementCompany Stock Options, in each casecase as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in accordance the case of (ii) in the ordinary course of business and in a manner consistent with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)past practice;
(iiic) 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 (stock, except for dividends by any dividend direct or distribution by a subsidiary indirect wholly owned Subsidiary of the Company to the Company or another wholly owned subsidiary any other Subsidiary of the Company);
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options acquire, directly or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan)indirectly, or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesits capital stock;
(ve) make any acquisition of (whether i) acquire (including, without limitation, by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), assets or make any investment in any interest in, other business combination) any corporation, partnership or partnership, other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose any significant amount of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
; (viiii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, 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 loansloans or advances, advances or capital contributions to grant any other person security interest in any of its assets; (other than iii) enter into any contract or agreement that would be a subsidiary of the Company)Material Contract, in each case(iv) enter into any distribution or manufacturing contract or agreement, other than contracts or agreements (including intellectual property contracts) entered into in the ordinary course of business and consistent with past practice; (v) authorize, pursuant or make any commitment with respect to, any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any contract, agreement, commitment or binding arrangement with respect to letters of credit or otherwiseany matter set forth in this Section 6.01(e);
(xf) take any action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $2,340,000 in the aggregate;
(g) except to the extent required under any Employee Benefit Plan as specifically contemplated or as required by applicable lawprovided for in this Agreement, (A) increase the compensation payable or fringe to become payable or the benefits of any of provided to its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment increases in the ordinary course of business and consistent with past practice with in salaries, wages, bonuses or incentives of employees of the Company or any Subsidiary of the Company who are not directors or officersofficers of the Company, (D) 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 of the Company, or establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other amounts to plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee other than as set forth in Section 3.24 of the Company Disclosure Scheduleemployee;
(xih) change any of the accounting methods used by it unless required by GAAP;
(i) make any change tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any accounting principlesUnited States federal, except as may be appropriate to conform to changes in statutory state, local or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect theretonon-United States material income tax liability;
(xiij) 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 of any such liabilities in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return and consistent with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refundpast practice;
(xiiik) settle amend, modify or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material consent to the Company termination of any Material Contract, or any subsidiary amend, waive, modify or consent to the termination of the Company;
(xv) adopt a plan of liquidation 's or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivableSubsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practice;
(xviil) materially change commence or settle any of its business policiesAction;
(xviiim) other than fail to pay, discharge or satisfy any claim, liability or obligation in accordance with the ordinary course of business of the Company, consistent with past practice; or
(n) announce an intention, enter into any lease (as lessor formal or lessee); sellinformal agreement or otherwise make a commitment, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 2 contracts
Sources: Merger Agreement (Bei Medical Systems Co Inc /De/), Merger Agreement (Bei Medical Systems Co Inc /De/)
Conduct of Business Pending the Merger. Section 5.1 6.1 Conduct of Business of by the Company Pending the Merger.
(a) Between the date of this Agreement and . Prior to the Effective TimeDate, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent agree in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shallwriting:
(i) amend the Company shall, and shall cause its subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, and shall, and shall cause its subsidiaries to, use their diligent efforts to preserve intact their present business organizations, keep available the services of their present officers and employees and preserve their relationships with customers, suppliers and others having business dealings with them to the end that their goodwill and ongoing businesses shall be unimpaired at the Effective Date. The Company shall, and shall cause its subsidiaries to, (A) maintain insurance coverages and its books, accounts and records in the usual manner consistent with prior practices; (B) comply in all material respects with all laws, ordinances and regulations of Governmental Entities applicable to the Company and its subsidiaries; (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 respects its obligations under all contracts and commitments to which it is a party or otherwise change its Certificate of Incorporation by which it is bound, in each case other than where the failure to so maintain, comply or By-Laws perform, either individually or any similar governing instrumentsin the aggregate, would not result in a Company Material Adverse Effect;
(ii) issueexcept as required by this Merger Agreement or as permitted pursuant to Section 7.10 hereof, deliverthe Company shall not and shall not propose to (A) sell or pledge or agree to sell or pledge any capital stock owned by it in any of its subsidiaries, sell(B) amend its Restated Certificate of Incorporation or Bylaws, pledge(C) split, dispose combine or reclassify its outstanding capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or encumber any in substitution for shares of capital stock, ownership interests or voting securitiesstock of the Company, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declare, set aside, make aside or pay any dividend or other distribution, distribution payable in cash, stockstock or property (other than Regular Company Dividends), property or otherwise(D) directly or indirectly redeem, with respect purchase or otherwise acquire or agree to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of Company capital stock;
(iii) the Company shall not, nor shall it permit any of its subsidiaries to, (A) except as required by this Merger Agreement, 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 the any class, any Indebtedness or any option, rights or warrants to acquire, or securities convertible into, shares of capital stock other than issuances of Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order Stock pursuant to pay taxes in connection with the exercise of Options employee stock options outstanding on the date hereof or the lapse conversion of restrictions in respect of Restricted Shares pursuant to the terms of a Company Series C Preferred Stock, Company Series B Preferred Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any Indebtedness of the Company’s subsidiaries;
; (vB) make acquire, lease or dispose or agree to acquire, lease or dispose of any acquisition capital assets or any other assets other than in the ordinary course of business, (whether C) incur additional Indebtedness or encumber or grant a security interest in any asset or enter into any other material transaction other than in each case in the ordinary course of business; (D) acquire or agree to acquire by merger, consolidation merging or acquisition of stock or substantially all of the assets)consolidating with, or make any investment in any by purchasing a substantial equity interest in, or by any other manner, any business or any corporation, partnership partnership, association or other business organization or division thereof, in each case in this Clause (D) which are material, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, except that the Company may create new wholly owned subsidiaries in the ordinary course of business; or (E) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(viiv) sell except as set forth in the Company Disclosure Schedule, the Company shall not, nor shall it permit, any of its subsidiaries to, except as required to comply with applicable law and except as provided in Section 7.5 hereof, (A) adopt, enter into, terminate or otherwise dispose of (whether by mergeramend any bonus, consolidation or disposition of profit sharing, compensation, severance, termination, stock or assets or otherwise) any corporationoption, partnership pension, retirement, deferred compensation, employment or other business organization Company Benefit Plan, agreement, trust, fund or division thereof other arrangement for the benefit or otherwise sell or dispose welfare of any assetsdirector, other than sales officer or dispositions current or former employee, (B) increase in any manner the compensation or fringe benefit of any director, officer or employee (except for normal increases in the ordinary course of business that are consistent with past practice and that, in the aggregate, do not result in a material increase in benefits or pursuant compensation expense to the Company and its subsidiaries relative to the level in effect prior to such amendment), (C) pay any benefit not provided under any existing Contracts;
plan or arrangement, (viiD) 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 the removal of existing restrictions in any benefit plans or agreements or awards made thereunder), (E) take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or Company Benefit Plan other than in the ordinary course of business consistent with past practice, or (F) adopt, enter into into, amend or amend in terminate any material respect contract, agreement, commitment or arrangement to do any Contractof the foregoing;
(viiiv) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilitiesshall not, incur or modify nor shall it permit any of its subsidiaries to, make any investments in any material respect in an manner adverse to non-investment grade securities provided, however, that the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions will be permitted to any other person (other than a subsidiary of the Company), in each case, other than create new wholly owned subsidiaries in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;business; and
(xvi) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and nor shall cause each it permit any of is its subsidiaries not to, directly take or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in taken any material respect; action, whether before or (iiafter the Effective Date, which would disqualify the Merger as a "pooling of interests" for accounting purposes or as a "reorganization" within the meaning of Section 368(a) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or Code.
Section 6.2 Conduct of Business by Parent and Sub Pending the other transactions contemplated by this AgreementMerger.
Appears in 2 contracts
Sources: Merger Agreement (Tyco Toys Inc), Merger Agreement (Corporate Advisors Lp)
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between the date of this Agreement and the Effective Time, except Except as otherwise contemplated by this Agreement, as required by law, disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 Schedule 5.01 of the Company Disclosure Schedule, or, subject to such Schedule 5.01, provided for in the Company's Annual Budgets, including the draft budget for the calendar year 2002 (as the same may be required to be revised by law the Company's lenders) and Capital Plan, as attached to the Company Disclosure Schedule and identified as the Company Budgets and Capital Plan (collectively, the "COMPANY BUDGETS") or unless Parent shall otherwise except, in the case of clause (a) and clause (i) below only, in connection with necessary repairs due to breakdown or casualty, or other necessary actions taken in response to a business emergency or other unforeseen operational matters, after the date hereof and prior to the Effective Time, without Parent's consent in writing (which consent shall not be unreasonably withheld, delayed withheld or conditioneddelayed), the Company shall, and shall cause its subsidiaries to:
(Aa) conduct their respective businesses in the ordinary course of business consistent with good operating practice in the electric generating industry taking into account the age, type and location of the assets of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, subsidiaries;
(Bb) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shall:
not (i) amend or otherwise change its Certificate propose to amend their respective certificates of Incorporation incorporation or Byby-Laws laws or any similar governing instruments;
equivalent organizational documents, (ii) issuesplit, deliver, sell, pledge, dispose of combine or encumber any shares of reclassify their outstanding capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declare, set aside, make aside or pay any dividend or other distribution, distribution payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for any dividend the payment of dividends or distribution by a subsidiary of the Company distributions to the Company or another wholly owned any of its subsidiaries by a direct or indirect subsidiary of the Company);
(ivc) reclassifynot issue, combinesell, splitpledge or dispose of, subdivideor agree to issue, redeemsell, purchase pledge or otherwise dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities which are convertible into or exchangeable for such capital stock, except that (i) the Company may issue shares of capital stock of the Company (A) upon exercise of Company Options outstanding on the date hereof or hereafter granted in accordance with the provisions of subclause (ii) of this clause (c), (B) upon conversion of the Convertible Notes or in accordance with the Company Rights Agreement as in effect on the date hereof and (C) upon exercise of Warrants outstanding on the date hereof, (ii) the Company may grant Company Options pursuant to existing contractual obligations as set forth in Schedule 5.01 of the Company Disclosure Schedule, and (iii) issuances, sales or dispositions of capital stock among the Company and its subsidiaries shall be permitted;
(d) except for transactions among the acquisition Company and its subsidiaries or as otherwise provided in Schedule 5.01 of Common Shares tendered the Company Disclosure Schedule, not (i) incur or become contingently liable with respect to any indebtedness for borrowed money or enter into any "keepwell" or other agreement to maintain the financial condition of another person or enter into arrangements having the effect of any of the foregoing (including any capital leases, "synthetic" leases or conditional sale or other title retention agreements) in excess of $25 million other than (A) borrowings in the ordinary course of business under existing credit facilities of the Company or any of its subsidiaries as such facilities may, if permitted by optionees clause (ii) of this Section 5.01(d), be amended or replaced in connection a manner that does not have a Material Adverse Effect (the "EXISTING CREDIT FACILITIES") and (B) if permitted by clause (ii) of this Section 5.01(d), borrowings to refinance existing indebtedness, (ii) incur or become contingently liable with respect to any indebtedness (other than indebtedness to be incurred under Liberty Electric PA, LLC's Note Purchase Agreement with the "Institutional Lenders" dated as of July 31, 2001 as amended to the date of this Agreement, relating to the Liberty electric generating station) that bears interest at a cashless exercise fixed rate or that requires payment of Options a makewhole or other premium in order the event of redemption or repayment before stated maturity or enter into any interest rate swap, cap, collar or similar agreements, (iii) redeem, purchase, acquire or offer to pay taxes 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 in connection with the exercise of outstanding Company Options or the lapse of restrictions in respect of Restricted Shares and Warrants pursuant to the terms of a the Company Stock Option Plan)Plan and the relevant written agreements evidencing the grant of Company Options and Warrants, or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(viv) make any acquisition for consideration valued at $25 million or more individually (for any single acquisition) or $50 million or more in the aggregate (for all acquisitions) of (whether any operating assets, securities or businesses other than acquisitions by merger, consolidation the Company or acquisition of stock or substantially all a subsidiary of the Company of any operating assets), securities or make any investment in any interest inbusinesses of a subsidiary of the Company, any corporation, partnership or other business organization or division thereof;
(viv) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of assets or businesses having a value of $25 million or more individually or $50 million or more in the aggregate, or pledge or encumber any assetsassets or businesses, other than (A) pledges or encumbrances required pursuant to Existing Credit Facilities or other permitted borrowings to the extent replacing Existing Credit Facilities in whole or in part and in such case only to the extent of the pledge or encumbrance required pursuant to Existing Credit Facilities, (B) sales or dispositions of businesses or assets by the Company or a subsidiary of the Company to a subsidiary of the Company or as may be required by applicable law, (C) if permitted by Section 5.01(j), sales of power and services and capacity and other current assets or dispositions of obsolete assets or equipment, in each case, in the ordinary course of business consistent with good operating practices in the electric generating industry taking into account the age, type and location of the assets of the Company and its subsidiaries, (D) if in connection with an actual or pursuant threatened eminent domain proceeding where fair value, in the Company's reasonable judgment, is paid for the asset or business, or (vi) enter into any binding contract, agreement, commitment or arrangement with respect to existing Contractsany of the foregoing;
(viie) use reasonable best efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present senior officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them;
(f) except as otherwise provided in Schedule 5.01 of the Company Disclosure Schedule, not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other than similar arrangements or agreements with any directors, officers or key employees or pay any benefit not required by any plan or arrangement in effect on the date hereof, except pursuant to (i) the requirements of applicable law, (ii) the ordinary course of business consistent with past practice, enter (iii) the Company Plans or collective bargaining agreements in effect on the date of this Agreement or (iv) employment agreements entered into with a person who is hired or amend promoted by the Company or one of its subsidiaries after the date hereof in any material respect any Contractthe ordinary course of business based on job performance or workplace requirements and that are consistent with past practice and comparable in form and amount to individual compensation or benefit plans or agreements maintained by the Company and its subsidiaries on the date of this Agreement;
(viiig) authorize not increase the base salary or other monetary compensation of any material new capital expenditures which areofficer or employee, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than increases in the ordinary course of business consistent with past practice, practice or as permitted by Section 5.06(f) or except pursuant to letters of credit or otherwisepreviously existing contractual obligations;
(xh) not adopt, enter into, amend to materially increase benefits or obligations of or accelerate the payment or vesting of any benefit or amount payable under any Company Plan, except (i) in the ordinary course of business, (ii) as required pursuant to existing contractual obligations or this Agreement or (iii) as required by applicable law;
(i) excluding expenditures made to support projects described in the Company Budgets to the extent permitted by Schedule 5.01 of the Company Disclosure Schedule, (i) except to the extent required permitted by item (ii) of this Section 5.01(i), not make any expenditures (capital or otherwise) in respect of those projects and (ii) not make any capital expenditures (whether on those projects or otherwise) in excess of $1 million individually or $10 million in the aggregate, or, in either case, enter into any binding commitment or contract to make such expenditures;
(j) not enter into, terminate, grant any material waiver or consent under or materially amend any Employee Benefit Plan material contract or as required commitment or series of related contracts or commitments, including any contract or commitment or series of related contracts or commitments (i) providing for sales of goods or services by applicable law, (A) increase the compensation Company or fringe benefits of any of its directorssubsidiaries that has a term of more than one year and which is reasonably expected to generate more than $25 million in revenues over its term, officers excluding forward sales in respect of the calendar year 2002 to the extent permitted under the Company's two principal subsidiaries' credit agreements in their current form or employees (ii) providing for purchases of goods or services by the Company or any of its subsidiaries that has a term of more than one year and which is reasonably expected to involve payments of more than $25 million over its term;
(k) maintain insurance coverages as contemplated by Section 4.18 and file and prosecute any claims thereunder relating to the business of the Company and its subsidiaries;
(l) invest available cash balances, to the extent not otherwise required by the terms of the Existing Credit Facilities, in investments that would qualify as "Permitted Investments" under the terms of the Company's Credit Agreement, dated as of July 27, 2000, with Union Bank of California, N.A., CIBC World Markets Corp., The Bank of Novia Scotia and various other financial institutions;
(m) not make any tax election or settle or compromise any tax liability or refund, except as would not reasonably be expected to have a Material Adverse Effect;
(n) not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $10 million, net of any insurance benefit to Company, in the aggregate, other than the payment, discharge or satisfaction in the ordinary course of business consistent with respect to employees who are not directors past practice of liabilities reflected or officers), (B) grant any severance reserved against in the financial statements contained in the Company SEC Reports or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment incurred in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedulepractices;
(xio) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) not settle or compromise any litigationpending or threatened suit, other than settlements action or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material claim relating to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.transactions contemplated hereby; and
(cp) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly commit or indirectly, take agree in writing or otherwise to do any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated act restricted by this AgreementSection 5.01.
Appears in 2 contracts
Sources: Merger Agreement (Reliant Resources Inc), Merger Agreement (Orion Power Holdings Inc)
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between Except as required by this Agreement, during the period from the date of this Agreement through the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course of its business consistent with past practice and in compliance with all material applicable Laws and all material governmental authorizations, and use reasonable best efforts to preserve intact its present business organization, maintain in effect all of its foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations, keep available the services of its directors, officers and employees and maintain satisfactory relationships with its customers, lenders, suppliers and others having material business relationships with it. Without limiting the generality of the foregoing and to the fullest extent permitted by applicable Law, from the date of this Agreement until the Effective Time, except as otherwise contemplated required by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, Agreement or as set forth in Section 5.1 4.1 of the Company Disclosure ScheduleLetter, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organizationnot, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor not permit any of its subsidiaries shallSubsidiaries to, without the prior written consent of Parent:
(i) amend (A) other than regularly scheduled dividends with respect to the Company Series B Preferred Stock consistent with the Company’s past practice with respect to payment date and amount, declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or any combination thereof) in respect of, any shares of its capital stock or other securities, or otherwise change make any payments to its Certificate stockholders in their capacity as such other than dividends or distributions by Subsidiaries to other Subsidiaries or to the Company, (B) split, combine or reclassify any shares of Incorporation its capital stock or By-Laws issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any similar governing instrumentsof its Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities other than the cancellation of Company Stock Options in connection with the exercise thereof or pursuant to the Rights Agreement;
(ii) (A) issue, deliver, sell, pledge, dispose of or encumber any shares of capital stock, ownership interests or voting securitiesotherwise encumber, or any optionsauthorize the issuance, warrantsdelivery, convertible securities sale, pledge, disposal or other rights of any kind to acquire or receive any shares of capital stockencumbrance of, any Company Securities or Company Subsidiary Securities, other ownership interests or any voting securities than (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for (A1) the issuance of shares of Company Common Shares Stock upon the exercise of Company Stock Options or in connection with other stock-based awards that are outstanding as of on the date of this Agreement, in each case, Agreement in accordance with the terms of any Company Stock Option Plan, those options on the date of this Agreement and (2) issuances pursuant to the Rights Agreement or (B) issuances amend any term of any Company Security or any Company Subsidiary Security (in accordance with the Rights Planeach case, whether by merger, consolidation or otherwise);
(iii) declare, set aside, make amend its charter or pay any dividend by-laws or other distributioncomparable charter or organizational documents (whether by merger, payable in cash, stock, property consolidation or otherwise, with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify(A) acquire or agree to acquire, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether including by merger, consolidation or acquisition of stock or substantially all of the assets), or make ) any investment interest in any interest in, business or any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by mergerlimited liability company, consolidation or disposition of stock or assets or otherwise) any corporationpartnership, partnership association or other business organization or division thereof or otherwise sell or dispose any material amount of assets from any assets, other Person (other than sales or dispositions purchases of inventory in the ordinary course of business or pursuant to existing Contractsin accordance with Section 4.1(a)(x)), (B) merge or consolidate with any other Person or (C) adopt a plan of complete or partial liquidation, dissolution, recapitalization or restructuring;
(viiv) sell, lease, license, mortgage, encumber or otherwise dispose of any Subsidiary or any material amount of securities, properties or assets, other than the sale of inventory or obsolete equipment in the ordinary course of business consistent with past practicepractice or pursuant to existing Contracts or commitments disclosed in Section 4.1 of the Company Letter;
(vi) (A) create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees thereof other than in the ordinary course of business on terms consistent with past practices in an amount not to exceed $100,000 in the aggregate, provided that all such indebtedness for borrowed money must be prepayable at any time by the Company without penalty or premium, or (B) make any loan, advance, investment or capital contribution to, or other investment in, either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any Person, other than loans, advances, investments and capital contributions to or in its wholly-owned Subsidiaries made in the ordinary course of business consistent with past practices and other than advances of expenses to employees and consultants in the ordinary course of business;
(vii) (A) grant or increase any severance or termination pay to (or amend any existing arrangement with) any of their respective directors, officers or employees other than as required pursuant to existing Company Plans, (B) increase benefits payable under any severance or termination pay policies or employment agreements existing as of the date of this Agreement, (C) enter into any employment, consulting, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any of their respective directors, officers or employees, or (D) establish, adopt or amend (except as required by applicable Law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, severance, compensation, stock option, restricted stock or other benefit plan or arrangement covering any of their respective directors, officers or employees, other than benefit arrangements (other than collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, severance, compensation, stock option, restricted stock plans or arrangements) with employees in any material respect any Contractthe ordinary course of business;
(viii) authorize any material new capital expenditures which areincrease the compensation, in the aggregatebonus or other benefits payable or to become payable to its directors, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur executives or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each caseemployees, other than in the ordinary course of business consistent with past practice, pursuant practice as to letters timing and amount;
(ix) transfer or agree to transfer any employee from working for the Company or any of credit its Subsidiaries (other than to the Company or otherwiseany of its Subsidiaries) or induce any employee to resign such employee’s employment with the Company or any of its Subsidiaries;
(x) except incur any capital expenditures or any obligations or liabilities in respect thereof, other than (i) expenditures with respect to commitments in existence on the extent required under date of this Agreement which, in the case of material commitments in an amount in excess of $25,000, are set forth in Section 4.1(a)(x) of the Company Letter, or (ii) in an amount in excess of $100,000 individually or $250,000 in the aggregate;
(xi) create or incur any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of Lien on any of its directors, officers or employees (except material asset other than any immaterial Lien incurred in the ordinary course of business consistent with past practices;
(xii) (A) enter into any Contract that would have been a Company Material Contract were the Company or any of its Subsidiaries a party or subject thereto on the date of this Agreement other than in the ordinary course consistent with past practices or (B) terminate or amend, in any material respect which would reasonably be expected to employees who are not directors be detrimental to the Company or officers)any of its Subsidiaries, any such Contract or any Company Material Contract or waive any material right thereunder;
(xiii) terminate, renew, suspend, abrogate, amend or modify in any material respect any Company Permit, other than renewals, amendments or modifications in the ordinary course of business;
(xiv) make any change in any method of accounting or accounting principles or practice, except for any such change required by reason of a concurrent change in GAAP or Regulation S-X under the Exchange Act, as approved by the Company’s independent public accountants;
(xv) settle, or offer or propose to settle, (A) any litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any of its Subsidiaries that is material to the Company and its Subsidiaries, taken as a whole or involving a payment by the Company or its Subsidiaries in excess of $100,000, (B) grant any severance stockholder litigation or termination pay not provided for under dispute against the Company or any Employee Benefit Planof its officers or directors, or (C) enter into any employmentlitigation, consulting arbitration, proceeding or severance agreement dispute that relates to the Transactions;
(xvi) grant any license with respect to Intellectual Property of the Company other than non-exclusive licenses granted in the ordinary course of business consistent with past practices or arrangement with take any action or omit to take any action or make any filing or pay any fee that would reasonably be expected to cause any material Intellectual Property of the Company used or held for use in its present business to expire or former directorsbecome invalidated, officers abandoned or dedicated to the public domain;
(xvii) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other employeesthan the payment, except for offers of employment discharge or satisfaction, in the ordinary course of business and consistent with past practice with employees who are not directors practice, of liabilities and obligations reflected or officers, (D) establish, adopt, enter into or amend reserved against in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 the financial statements of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in fail to use reasonable efforts to maintain existing material insurance policies or comparable replacement policies to the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; orextent available for a similar reasonable cost;
(xix) agree to take any action that would make any representation or warranty of the actions described Company hereunder inaccurate in Section 5.1(a)(i) through Section 5.1(a)(xviii).any material respect at, or as of any time before, the Effective Time or would materially delay the Closing;
(bxx) Between except as required by Law, (A) make any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement and the Effective Timeor adopt any material accounting method that is inconsistent with elections made, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.positions taken or methods used in preparing or filing similar Tax Returns in prior periods or (B) settle or resolve any material Tax controversy;
(cxxi) Between the date enter into any lease or sublease of this Agreement and the Effective Timereal property (whether as lessor, the Company shall notsublessor, and shall cause each lessee or sublessee) or change, terminate or fail to exercise any right to renew any lease or sublease of is subsidiaries not toreal property; or
(xxii) agree, directly resolve or indirectly, take commit to do any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreementforegoing.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of by the Company Pending the Merger.
(a) Between . 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 or the Effective Time, except as unless DHI shall otherwise contemplated by this Agreementagree in writing, as disclosed in the SEC Reports filed prior to Company shall conduct its business and shall cause the date of this Agreement, as set forth in Section 5.1 businesses of the Company Disclosure ScheduleSubsidiaries to be conducted only in, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of and the Company and its subsidiaries the Company Subsidiaries shall be conducted in its not take any action except in, the ordinary course of business and in the manner consistent with past practice. The Company shall use its reasonable best commercial efforts to preserve substantially intact its the business organization, and material business relationships, (B) organization of the Company shall perform its obligations under and the Company Subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and the Company Subsidiaries and to preserve the present relationships of the Company and the Company Subsidiaries with customers, suppliers and other persons with which the Company or any Company Subsidiary has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, and (C) without limiting the foregoing, neither the Company nor any Company Subsidiary shall, during the period from the date of its subsidiaries shallthis Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectly do any of the following without the prior written consent of DHI:
(ia) amend or otherwise change its the Certificate of Incorporation or By-Laws Bylaws of the Company or the organizational documents of any similar governing instrumentsCompany Subsidiary;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests interest (including, without limitation, any phantom interest) in the Company (except for the issuance of shares of Company Common Stock pursuant to any previously granted Company Stock Option or under the Company Stock Purchase Plan);
(c) sell, pledge, dispose of or encumber any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), assets of the Company or any of its subsidiaries (Company Subsidiary, except for (Ai) sales of assets in the issuance ordinary course of Common Shares upon business in a manner consistent with past practice, (ii) disposition of obsolete or worthless assets, (iii) sales of immaterial assets not in excess of $250,000 individually, and (iv) liens on assets to secure purchase money and construction financings in the exercise ordinary course of Options business consistent with past practice or arising under the Company's existing revolving and warehouse lines of credit and other non-monetary encumbrances entered into in connection the ordinary course of business consistent with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)past practice;
(iiid) (i) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a wholly owned Company Subsidiary may declare and pay a dividend or otherwisemake advances to its parent or the Company, with respect to (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any Company Subsidiary to purchase, repurchase, redeem or otherwise acquire, any of its securities, 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;
(e) except for any dividend or distribution by a subsidiary as set forth in Section 5.1(e) of the Company to the Company or another wholly owned subsidiary of the Company);
Disclosure Schedule, (ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or other business organization or division thereof;
; (viii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any person, except under existing lines of credit in the ordinary course of business consistent with past practice, or make any loans, loans or advances or capital contributions to any other person (other than a subsidiary loans or advances to or from direct or indirect wholly owned Company Subsidiaries or pursuant to existing contracts or contracts for the acquisition or development of land entered into in the Companyordinary course of business consistent with past practice), in each case(iii) enter into or amend any contract or agreement, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit that is or otherwise;
(x) except to the extent required under any Employee Benefit Plan would be a Material Contract or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value is otherwise material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of and the Company Subsidiaries taken as a whole; or (iv) authorize any subsidiary capital expenditures or purchase of the Company fixed assets (other than the dissolution purchase of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than land in the ordinary course of business consistent with past practice) which are, in the aggregate, in excess of $100,000 individually or $1,000,000 in the aggregate;
(xviif) materially change except as may be required by law, increase the compensation payable or to become payable to its officers or employees, grant any severance or termination pay to, or enter into any employment or severance agreement with any director, officer or other employee of its business policies;
(xviii) the Company or any Company 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, termination, severance or other than plan, agreement, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees, except increases in annual compensation for employees in the ordinary course of business consistent with past practicepractice to the extent such compensation increases do not result in a material increase in compensation expense to the Company;
(g) change accounting policies or procedures (including, enter into any lease without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable);
(h) except as lessor or lessee); sellprovided in Section 5.4, abandon or make any other disposition 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 with respect to any material amount of Tax, except to the extent the amount of any of its assets, properties such settlement or businessescompromise has been reserved for in the financial statements contained in the Company SEC Reports filed prior to the date hereof; grant or suffer any Lien on any of its assets, properties or businesses; orand
(xixi) take, or agree to take take, any of the actions described in Section 5.1(a)(iSections 5.1(a) through Section 5.1(a)(xviii).
(bh) Between above, or any action which would make any of the date representations or warranties of the Company contained in this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly untrue or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue incorrect in any material respect; respect as contemplated hereby or (ii) that would, prevent the Company from performing or would reasonably be expected to, individually or cause the Company not to perform in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreementany material respect its covenants hereunder.
Appears in 1 contract
Sources: Merger Agreement (Schuler Homes Inc)
Conduct of Business Pending the Merger. Section SECTION 5.1 Conduct of Business of the Company. The Company Pending covenants and agrees that, during the Merger.
(a) Between period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, unless Parent shall otherwise agree in writing, which agreement shall not be unreasonably withheld or delayed, the Company shall conduct its business and shall cause the businesses of the Company Subsidiaries to be conducted only in, and the Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business in a manner consistent with past practice except as otherwise expressly contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the . The Company shall use its reasonable best efforts to preserve substantially intact its the business organization, organization and material business relationships, (B) assets and maintain the material rights of the Company shall perform its obligations under this Agreementand the Company Subsidiaries, keep available the services of the present officers, employees and (C) without consultants of the Company and the Company Subsidiaries and preserve the present relationships of the Company and the Company Subsidiaries with customers, suppliers and other persons with which the Company or any Company Subsidiary has business relations. Without limiting the foregoing, except as contemplated by this Agreement, neither the Company nor any Company Subsidiary shall, during the period from the date of its subsidiaries shallthis Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectly do any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its Certificate the Articles of Incorporation or By-Laws Bylaws of the Company or the organizational documents of any similar governing instrumentsCompany Subsidiary;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests interest (including, without limitation, any phantom interest) in the Company (except for the issuance of shares of Company Common Stock pursuant to any option previously granted under the Company Option Plans);
(c) sell, pledge, dispose of or encumber any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), assets of the Company or any of its subsidiaries (Company Subsidiary, except for (Ai) sales of assets in the issuance ordinary course of Common Shares upon business in a manner consistent with past practice, (ii) sales of lots and/or homes in a manner consistent with past practice, (iii) disposition of obsolete or worthless assets, (iv) sales of immaterial assets not in excess of $250,000 individually, and (v) liens on assets to secure purchase money and construction financings in the exercise ordinary course of Options or business consistent with past practice and other non-monetary encumbrances entered into in connection the ordinary course of business consistent with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)past practice;
(iiii) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a wholly owned Company Subsidiary may declare and pay a dividend or otherwisemake advances to its parent or the Company, with respect to (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (except for iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any dividend Company Subsidiary to purchase, repurchase, redeem or distribution by a subsidiary otherwise acquire, any of its securities, 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 Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or other business organization or division thereof;
; (ii) purchase any securities or make any material investment (other than investments in existing joint ventures for the purpose of land acquisition complying with the dollar limits set forth in clause (vi) sell of this Section 5.1(e)), either by purchase of securities, contributions to capital, asset transfers, or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose purchase of any assets, in any person other than sales a wholly owned Company Subsidiary or dispositions in the ordinary course of business otherwise acquire direct or pursuant to existing Contracts;
indirect control over any person; (viiiii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any person, except under existing lines of credit in the ordinary course of business consistent with past practice, or make any loans, loans or advances or capital contributions to any other person (other than a subsidiary loans or advances to or from direct or indirect wholly owned Company Subsidiaries or pursuant to existing contracts or contracts for the acquisition or development of land entered into in the Companyordinary course of business consistent with past practice), in each case(iv) enter into or amend any contract or agreement, other than in the ordinary course of business consistent with past practice, that is or would be a Company Material Contract or is otherwise material to the Company and the Company Subsidiaries, taken as a whole; (v) authorize any capital expenditures or purchase of fixed assets which are, in excess of $250,000 individually or $1,500,000 in the aggregate; (vi) authorize any expenditures for the purchase of real estate which are in excess of $15,000,000 in any single transaction or series of related transactions or in excess of $30,000,000 in the aggregate in any 30-day period (it being understood and agreed that this clause (vi) shall not prohibit the performance of any obligation pursuant to letters any agreement entered into prior to the date of credit this Agreement (including any obligation to purchase land in order to fulfill obligations pursuant to agreements with home purchasers executed prior to the date hereof) in Section 5.1(e)(vi) of the Company Disclosure Schedule); or otherwise;(vii) fail to use their commercially reasonable efforts to cause to be memorialized in writing all agreements pertaining to the obligations of the Company or any of the Company Subsidiaries to purchase land in connection with the joint ventures as set forth on Schedule 5.1(e)(vii), except where the failure to so memorialize an agreement is not reasonably likely to individually or in the aggregate have a Company Material Adverse Effect.
(xf) except to the extent required under any Employee Benefit Plan or as may be required by applicable law, (A) increase the compensation payable or fringe benefits of any of to become payable to its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors employees, grant or officers), (B) grant pay any severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting employment or severance agreement or arrangement with any of its present or former directorsdirector, officers officer or other employeesemployee of the Company or any Company Subsidiary, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other amounts plan, agreement, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees, except increases in annual compensation for employees in the ordinary course consistent with past practice to the extent such compensation increases do not result in a material increase in compensation expense to the Company;
(g) enter into or amend any employment agreement between the Company or any Company Subsidiary (unless required by law) and any person that the Company or the Company Subsidiary does not have the unconditional right to terminate without liability at any time on or after the Effective Time;
(h) change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable);
(i) 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 with respect to any officer material amount of Tax, except to the extent the amount of any such settlement or employee other than compromise has been reserved for in the financial statements contained in the Company SEC Reports filed prior to the date hereof;
(j) except as set forth in Section 3.24 5.1(j) of the Company Disclosure Schedule, commence any litigation other than in accordance with past practice, or settle any litigation involving any liability of the Company or any Company Subsidiary for material money damages or restrictions upon the operations of any of the Company or the Company Subsidiaries, or enter into any agreement to waive, release, compromise or assign any material rights or claims held by the Company or Company Subsidiary or settle any claim described in Section 3.14 of the Company Disclosure Schedule for a payment exceeding $3,000 per claim or in such other maximum amount as may be set forth in Section 3.14 of the Company Disclosure Schedule;
(xik) make any change fail to renew the Company's existing insurance policies, including general liability insurance policies, or fail to replace such policies with new policies with terms substantially identical to those currently in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) force other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does premium amounts which will not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businessesthen market rates; or
(xixl) take, or agree to take take, any of the actions described in Section 5.1(a)(iSections 5.1(a) through Section 5.1(a)(xviii).
(bk) Between above, or any action which would make any of the date representations or warranties of the Company contained in this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly untrue or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue incorrect in any material respect; respect as contemplated hereby or (ii) that would, prevent the Company from performing or would reasonably be expected to, individually or cause the Company not to perform in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreementany material respect its covenants hereunder.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. From the date of this Agreement and to the Effective Time, except unless Parent shall otherwise agree in writing (which agreement shall not be unreasonably withheld or delayed), or as otherwise set forth in Section 5.1 of the Company Disclosure Schedule or as expressly contemplated by this Agreement, as disclosed the Company shall conduct, and shall cause each of its Subsidiaries to conduct, its business only in the SEC Reports filed prior ordinary and usual course consistent with past practice, and the Company shall use, and shall cause each of its Subsidiaries to use, reasonable efforts to preserve intact the date present business organization, keep available the services of this Agreementits present officers and key employees, and preserve its existing relationships with customers, suppliers, licensors, licensees, distributors and other having business dealings with them. In addition, without limiting the generality of the foregoing, unless Parent shall otherwise agree in writing (which agreement shall not be unreasonably withheld or delayed), as set forth in Section 5.1 of the Company Disclosure ScheduleSchedule or as otherwise contemplated by this Agreement, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) from the business date of this Agreement to the Company and its subsidiaries shall be conducted in its ordinary course of business and Effective Time the Company shall use its reasonable best efforts to preserve substantially intact its business organizationnot, and material business relationships, (B) the Company nor shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor it permit any of its subsidiaries shallSubsidiaries to:
(a) (i) amend or otherwise change its Certificate of Incorporation or By-Laws or any similar governing instruments;
Organizational Documents, (ii) issuesplit, deliver, sell, pledge, dispose of combine or encumber reclassify any shares of its outstanding 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, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declare, set aside, make aside or pay any dividend or other distribution, distribution payable in cash, stock, stock or property or otherwise, with respect to on any class of its capital stock stock, or (iv) directly or indirectly redeem or otherwise acquire (except for any dividend or distribution by a subsidiary deemed acquisitions upon cashless exercises of the Company to the Company or another wholly owned subsidiary of the Company);
(ivOptions) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of its capital stock of stock, including without limitation the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.Series B Preferred
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between The Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement and is terminated in accordance with Article X (such period being hereinafter referred to as the Effective Time“Interim Period“), except as otherwise contemplated expressly required by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law Agreement or unless Parent shall otherwise consent in writing (writing, which consent shall not be unreasonably withheld, delayed conditioned or conditioned)delayed, the Company: (Ai) shall conduct its business only in the business of the Company and its subsidiaries shall be conducted in its ordinary course of business business, consistent with past practice and according to the Company plans and budgets previously delivered to Parent; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve substantially intact its business organization, properties and material business assets, keep available the services of its officers, employees and consultants, maintain in effect all Company Material Contracts and preserve its relationships, (B) customers, licensees, suppliers and other Persons with which it has business relations. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Company shall perform its obligations under this Agreementnot, and (C) without limiting during the foregoingInterim Period, neither the Company nor directly or indirectly, do any of its subsidiaries shallthe following without the prior written consent of Parent:
(i) amend or otherwise change its Certificate of Incorporation Incorporation, Bylaws or By-Laws other equivalent organizational documents, or any similar governing instrumentsotherwise alter its corporate structure through merger, liquidation, reorganization or otherwise;
(ii) issue, delivertransfer, sell, pledge, dispose of pledge or encumber any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), interest of the Company or any of its subsidiaries (Company, except for (A) the issuance of Common Shares upon pursuant to the exercise of Company Options or in connection with other stock-based awards Company Warrants outstanding as of on the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)Signing;
(iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase repurchase or otherwise acquire acquire, directly or indirectly, any shares of capital stock of the Company (except for the acquisition repurchase of Company Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares Stock pursuant to the terms of a Company Stock Option Plan);
(iv) transfer, lease, license, mortgage, pledge, encumber or reclassifyincur or assume any Lien on any properties, combinefacilities, split or subdivide any capital stock equipment or other ownership interests of any of the Company’s subsidiariestangible or intangible assets;
(v) make declare, set aside or pay any acquisition dividend or other distribution in respect of (whether by merger, consolidation or acquisition any of its capital stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereofequity interests;
(vi) sell split, combine or otherwise dispose reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(whether vii) acquire (by merger, consolidation or disposition consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing ContractsPerson;
(viiviii) other than incur indebtedness for borrowed money or issue debt securities or assume, guarantee or endorse or become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except as otherwise permitted under any loan or credit agreement to which the Company is a party as of the date of this Agreement;
(ix) authorize any capital expenditure in excess of $25,000 individually or $50,000 in the aggregate;
(x) take or permit to be taken any action to: (A) increase employee compensation or grant any severance or termination compensation, except in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), ; (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employmentcollective bargaining agreement; (C) hire or terminate any employees, consulting independent contractors or consultants, having a total salary or severance agreement package that is individually in excess of $100,000, or arrangement with any that collectively is in excess of its present $100,000; or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other amounts to plan, trust, fund, policy, agreement or arrangement for the benefit of any officer of its directors, officers or employee other than as set forth in Section 3.24 of the Company Disclosure Scheduleemployees;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in policies or procedures unless required by statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect theretoGAAP;
(xii) other than in the ordinary course of business or as required by applicable law, take any action that (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect without regard to any Taxaction taken, (Dor agreed to be taken, by Parent or any of its Affiliates) change any annual Tax accounting period, (Ewould be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of section 368(a) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refundof the Code;
(xiii) settle or compromise fail to make any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 expenditures that are necessary and sufficient to maintain or, if greater, to the total incurred cash reserve amount for such matter, as extent budgeted or consistent with the past practice of the date Company, improve the conditions of this Agreementthe properties, maintained by facilities and equipment of the Company on the Company Balance Sheet at March 31Company, 2008including, without limitation, budgeted expenditures relating to maintenance, repair and replacement;
(xiv) waive take any right action or fail to take any action permitted by this Agreement if such action or failure to take action would result in either: (A) any of value material the representations and warranties of the Company set forth in Article III of this Agreement becoming untrue or (B) any of the conditions to the Company or any subsidiary of the CompanyClosing set forth in Article VII not being satisfied;
(xv) adopt a plan expend more than $425,000 of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization cash in excess of the Company or receipts in any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;calendar month; or
(xvi) except as may be required by generally accepted accounting principlesauthorize, revalue any portion of its assetsrecommend, properties propose, announce or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor agreement, contract, commitment or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree arrangement to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) Between . 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 or the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent agree in writing (writing, which consent agreement shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company shall conduct its business only in, and its subsidiaries the Company shall be conducted in its 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 in contemplation of the Merger; and the Company shall use its all reasonable best commercial efforts to preserve substantially intact its the business organizationorganization of the Company, to keep available the services of the present officers, employees and material consultants of the Company and to preserve the present relationships of the Company with customers, suppliers and other persons with which the Company has business relationshipsrelations. By way of amplification and not limitation, (B) except as contemplated by this Agreement, the Company shall perform its obligations under not, during the period from the date of this AgreementAgreement and continuing until the earlier of the termination of this Agreement or the Effective Time, and (C) without limiting the foregoingdirectly or indirectly do, neither the Company nor or propose to do, any of its subsidiaries shallthe following without the prior written consent of Parent:
(ia) amend or otherwise change its Certificate the Articles of Incorporation or By-Laws or any similar governing instrumentsof the Company except pursuant to the Merger Agreement;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests interest (including, without limitation, any phantom interest) in the Company;
(c) except in the ordinary course of business, sell, pledge, dispose of or encumber any voting securities assets (including but not limited to stock appreciation rights, phantom stock tangible or similar instruments), intangible) of the Company or any of its subsidiaries (except for (Ai) dispositions of obsolete or worthless assets and (ii) sales of assets not in excess of $50,000 in the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)aggregate;
(iiii) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property (ii) split, combine or otherwise, with respect to reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (except for iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, any dividend of its securities including without limitation, shares of Company Common Stock or distribution by a subsidiary any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock, or propose to do any of the Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or other business organization or division thereof;
; (viii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions except in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings and only under the Company’s existing credit facilities's revolving line of credit, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personperson or, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than except in the ordinary course of business consistent with past practice, pursuant make any loans or advances; (iii) enter into or amend any material contract or agreement; (iv) authorize any capital expenditures or purchases of fixed assets which are, in the aggregate, in excess of $100,000; or (v) enter into or amend any contract, agreement, commitment or arrangement to letters effect any of credit or otherwisethe matters prohibited by this Section 4.1(e);
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Af) increase the compensation payable or fringe benefits of any of to become payable to its directorsofficers, officers increase compensation payable or to become payable to its employees (except other in the ordinary course of business with respect to employees who are not directors business, or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting employment or severance agreement with any director, officer 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, termination, severance or other plan, agreement, trust, fund, policy or arrangement with for the benefit of any of its present current or former directors, officers or other employees, except for offers 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 employment 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), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into reserved against in the Financial Statements or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixj) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.1 (a) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that wouldabove, or any action which would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation make any of the Merger representations or warranties of the other transactions contemplated by Company contained in this AgreementAgreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 6.01 Conduct of Business of by the Company Pending the Merger.
(a) Between . Except as expressly contemplated by this Agreement or in Section 6.01 of the Company Disclosure Schedule, the Company covenants and agrees that, between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent agree in writing (which consent shall not be unreasonably withheldwriting, delayed or conditioned), (A) the business businesses of the Company and its subsidiaries the Company's Subsidiaries shall be conducted in its only in, and the Company and the Company's 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 its the business organization, and material business relationships, (B) organization of the Company shall perform its obligations under and the Company's Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Company's Subsidiaries and to preserve the current relationships of the Company and the Company's Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary of the Company has significant business relations. By way of amplification and not limitation, except as expressly contemplated by this Agreement, and (C) without limiting the foregoing, neither the Company nor any Subsidiary of its subsidiaries the Company shall, 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, which consent shall not be unreasonably withheld, conditioned or delayed:
(i) amend or otherwise change its Certificate of Incorporation or By-Laws or any similar governing instruments;
(iia) issue, deliversell or contract for the issuance or sale, sell, pledge, dispose of or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of the capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any securities convertible into or exchangeable for shares of its subsidiaries capital stock of the Company or any securities, warrants, options or rights to purchase any of the foregoing (except for (A) the issuance of Common Shares upon pursuant to the exercise of Options or in connection with other stock-based awards options currently outstanding as under the Company Stock Plans and pursuant to the exercise of options to purchase shares of Company Common Stock under the date of this Agreement, in each case, in accordance with ESPP);
(b) amend the terms of any Company Stock Option Planoutstanding security, option or (B) issuances in accordance with the Rights Plan)warrant;
(iiic) purchase or redeem any shares of capital stock of the Company;
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stockstock or other securities, property or otherwise, with respect to any of its the Company's capital stock stock;
(except for e) amend any dividend of the charter documents, bylaws or distribution by a subsidiary other organizational documents of the Company to the Company or another wholly owned subsidiary of the Company)its Subsidiaries;
(ivf) reclassify, combine, split, subdivide, redeem, purchase incur or otherwise acquire guarantee any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options indebtedness or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide incur any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in liabilities outside the ordinary course of business or pursuant to existing Contractsbusiness;
(viig) other than in the ordinary course of business consistent except as required to comply with past practiceapplicable Laws, adopt or amend any employee benefit plan, enter into any employment contract, settle any employment dispute, pay or amend agree to pay any severance, special bonus or special remuneration (except that any such bonus or remuneration payable in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget 2003 set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to Schedule that ordinarily would have been payable by the Company the terms in 2004 may be paid in 2003), including change of control payments, to any indebtedness for borrowed moneydirector or employee, or assumeincrease the salaries, guarantee wage rates or endorse, or otherwise as an accommodation become responsible for, the obligations compensation of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each caseits directors or, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwiseits employees;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (Ch) enter into any employment, consulting agreement with respect to the Intellectual Property Rights or severance agreement or arrangement with respect to the Intellectual Property of any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adoptthird party, enter into any collaboration, co-marketing or co-promotion agreement regarding any of the Company's compounds or otherwise extend, modify or amend in any material rights with respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Scheduleforegoing;
(xii) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any an election in respect of material Taxes, amend a Tax Return, adopt or change an accounting method in respect of accountingTaxes, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement, settle or compromise any litigationclaim or assessment in respect of Taxes, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as consent to any extension or waiver of the date limitation period applicable to any claim or assessment in respect of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008Taxes with any Governmental Authority;
(xivj) waive change any right of value material to the accounting methods used by the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidationits Subsidiaries, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be unless required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business GAAP; (k) fail to maintain insurance coverage at levels consistent with past practicepresently existing levels so long as such insurance is available at commercially reasonable rates;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between The Company covenants and agrees that, except as contemplated by this Agreement, between the date of this Agreement and the Effective Time, except as unless the Buyer shall otherwise contemplated by this Agreementagree in writing, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 Business of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted only in its the Company, and the Company shall not take any action, except in the usual, regular and ordinary course of business and the Company will generally conduct its business in substantially the same way as heretofore conducted, and without limiting the foregoing, the Company will continue to operate in the same geographic markets serving the same market segments. The Company shall use its reasonable best efforts to preserve substantially intact the business organization of the Company, to keep available the present services of the officers, employees and consultants of the Company and to preserve the current relationships and goodwill of the Company with customers, suppliers and other persons with which the Company has business relationships. Without limiting the generality of the foregoing, the Company shall:
(i) maintain in full force and effect all contracts of insurance and indemnity specified in any Company Disclosure Schedule hereto;
(ii) repair and maintain all of its tangible properties and assets in accordance with its usual and ordinary repair and maintenance standards;
(iii) continue to apply in full the same rigorous credit review process used by the Company prior to the Closing in determining the extent to which it will extend credit to customers or potential customers in the ordinary course of business;
(iv) notify the Buyer of any material emergency or other material change in the operation of its business organizationor properties and of any governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated).
(b) By way of amplification and material business relationshipsnot limitation of clause (a) above, (B) the Company shall perform its obligations under not between the date of this AgreementAgreement and the Effective Time, and (C) without limiting the foregoingdirectly or indirectly do, neither the Company nor or publicly announce an intention to do, any of the following without the prior written consent of the Buyer through one of its subsidiaries shall:authorized representatives (which representatives shall be each of its Chief Executive Officer, President and Chief Financial Officer):
(i) amend or otherwise change its Certificate of Incorporation Organizational Documents or By-Laws laws or any similar governing instrumentsequivalent organizational documents;
(ii) issue, deliver, sell, pledge, dispose of, grant, encumber, or authorize the issuance, delivery, sale, pledge, disposition, grant or encumbrance of, any Equity Interests of or encumber any shares of capital stock, ownership interests or voting securitiesthe Company, or any options, warrants, convertible securities or other rights of any kind to acquire any such Equity Interests, or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments)interest, of the Company Company, or enter into any agreement with respect to any of its subsidiaries (except for (A) the issuance of Common Shares foregoing, other than upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)Options;
(iii) declare, set aside, make or pay any distribution (by way of dividend or other distribution, payable in cash, stock, property or otherwise, ) with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company)Equity Interests;
(iv) reclassify, combine, split, subdividecombine or reclassify any of its Equity Interests or issue or authorize or propose the issuance of any other securities in respect of, redeem, purchase or otherwise acquire any shares in lieu of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariessubstitution for its Equity Interests;
(v) make repurchase, redeem or otherwise acquire any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all Equity Interests of the assets)Company, or make any investment in securities convertible into or exercisable for any interest in, any corporation, partnership or other business organization or division thereofof the Equity Interests of the Company;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) enter into any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course new line of business or pursuant to existing Contractsmaterially expand the business currently conducted by the Company;
(vii) acquire or agree to acquire, by merging or consolidating with, or by purchasing an equity interest in or a portion of the assets of, or by any other than in the ordinary course of manner, any business consistent with past practiceor any corporation, enter into partnership, other business organization or amend in any division thereof or any material respect any Contractamount of assets;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, increase the aggregate amounts owed under the Company's existing credit facilities or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any personindividual, corporation or other entity, or make any loans, advances loan or advance;
(ix) lower or otherwise alter its credit card fraud review process;
(x) authorize any capital contributions to any other person expenditures of more than $10,000 in the aggregate (other than a subsidiary expenditures listed in Section 6.01(b)(x) of the Company Disclosure Schedule and previously approved by the Buyer);
(xi) (A) (x) adopt, amend, renew or terminate any plan or any agreement, arrangement, or policy between the Company and one or more of its current or former directors, officers or employees, or (y) increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan or agreement as in effect as of the date hereof (including, without limitation, the granting of stock options, stock appreciation rights, restricted stock, restricted stock units or performance units or shares); or (B) enter into, modify or renew any employment, severance or other agreement with any director, officer or 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, termination, severance, retention or other plan, agreement, trust, fund, policy or arrangement providing for any benefit to any director, officer or employee;
(xii) pay any bonus or any compensation other than base compensation, except for payments of bonuses and other incentive compensation to sales personnel pursuant to and consistent with the written sales incentive plan which has been provided to and approved by the Buyer;
(xiii) take any action with respect to accounting methods, principles or practices, other than changes required by applicable law or GAAP or regulatory accounting as concurred in by the Company's independent accountants;
(xiv) make any Tax election or settle or compromise any federal, state, local or foreign tax liability;
(xv) pay, discharge or satisfy any claim, liability or obligation, other than the payment, discharge or satisfaction, in each casethe ordinary course of business and consistent with past practice;
(xvi) sell, lease, encumber, assign or otherwise dispose of, or agree to sell, lease, encumber, assign or otherwise dispose of, any of its material assets, properties or other rights or agreements;
(xvii) take any action that is intended or reasonably can be expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect, or any of the conditions to the consummation of the Merger and the other transactions contemplated by this Agreement set forth in Article IX not being satisfied in any material respect, or in any material violation of any provision of this Agreement;
(xviii) enter into or renew, amend or terminate, or give notice of a proposed renewal, amendment or termination of or make any commitment with respect to, (A) any contract, agreement or lease for office space or operations space to which the Company is a party or by which the Company or its properties is bound; (B) any lease, contract or agreement other than in the ordinary course of business consistent with past practicepractice including renewals of leases to existing tenants of the Company ; (C) regardless of whether consistent with past practices, pursuant any lease, contract, agreement or commitment involving an aggregate payment by or to letters the Company of credit more than $10,000 or otherwiserequiring performance by the Company of any obligations at any time more than one year after the time of execution;
(xxix) except enter into an agreement, contract, or commitment that, if entered into prior to the extent date hereof, would be required under to be listed on a Schedule delivered to the Buyer pursuant to the terms of this Agreement, including without limitation, any Employee Benefit Plan arrangement or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business contract with respect to employees who are not directors web site development or officers)operations; marketing, promotion, affiliate and advertising, including search engine referrals and Internet private labeling; fulfillment operations; or telephone, credit card or freight carrier services;
(Bxx) grant amend, terminate or change in any severance material respect any lease, contract, undertaking, arrangement or termination pay not provided for under other commitment listed in any Employee Benefit PlanSection of the Company Disclosure Schedule (including without limitation its arrangements and contracts with respect to web site development and operations; marketing, promotion, affiliate and advertising, including search engine referrals and Internet private labeling; fulfillment operations; and telephone, credit card or freight carrier services) or knowingly do any act or omit to do any act, or permit an act or omission to act, that will cause a breach of any such lease, contract, undertaking, arrangement or other commitment;
(Cxxi) change its pricing policies or its policies with respect to freight rates charged to customers;
(xxii) enter into any employment, consulting or severance agreement or arrangement transaction with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the a Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businessesInsider; or
(xixxxiii) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between Except as expressly permitted by clauses (i) through (xvii) of this Section 4.1(a), during the period from the date of this Agreement and through the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, in all material respects carry on its business in the ordinary course of its business as currently conducted and, to the extent consistent therewith, use reasonable best 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, as disclosed in the SEC Reports filed prior to the date of this Agreement, Agreement or as set forth in Section 5.1 4.1 of the Company Disclosure ScheduleLetter (with specific reference to the applicable subsection below), as required by law or unless Parent the Company shall otherwise consent in writing (which consent not, and shall not be unreasonably withheldpermit any of its Subsidiaries to, delayed or conditioned), without the prior written consent of Parent:
(A) the business declare, set aside or pay any dividends on, or make any other actual, constructive or deemed distributions in respect of, any of the Company and its subsidiaries shall be conducted capital stock, or otherwise make any payments to its stockholders in its ordinary course of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationshipstheir capacity as such, (B) split, combine or reclassify any of its capital stock or issue or authorize the Company shall perform issuance of any other securities in respect of, in lieu of or in substitution for shares of its obligations under this Agreementcapital stock, and (C) without limiting the foregoingpurchase, neither redeem or otherwise acquire any shares of capital stock of the Company nor or any of its subsidiaries shall:
other securities thereof or any rights, warrants or options to acquire any such shares or other securities or (iD) amend or otherwise change its Certificate of Incorporation or By-Laws or any similar governing instrumentsthe Rights Agreement;
(ii) issue, deliver, sell, pledge, dispose of or otherwise encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of its capital stock, any other ownership interests voting securities or equity equivalent or any voting securities (including but not limited to stock appreciation convertible into, or any rights, phantom stock warrants or similar instruments)options to acquire any such shares, voting securities, equity equivalent or convertible securities, other than (A) the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement in accordance with their current terms, (B) the issuance of shares of Company Common Stock pursuant to the Stock Option Agreement and (C) the issuance of Company Stock Options to purchase up to 800,000 shares of Company Common Stock in the ordinary course of business consistent with past practice to newly hired employees who are not officers of the Company or any of its subsidiaries Subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any provided that no individual receives Company Stock Option Plan, or (B) issuances Options to purchase in accordance with the Rights Planexcess of 12,500 shares of Company Common Stock);
(iii) declare, set aside, make amend its charter or pay any dividend by-laws or other distribution, payable in cash, stock, property comparable charter or otherwise, with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company)organizational documents;
(iv) reclassifyacquire or agree to acquire by merging or consolidating with, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock by purchasing a substantial portion of the Company (except for the acquisition assets of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan)equity in, or reclassifyby any other manner, combine, split any business or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by mergerlimited liability company, consolidation or disposition of stock or assets or otherwise) any corporationpartnership, partnership association or other business organization or division thereof or otherwise sell acquire or dispose of agree to acquire any assets, other than sales or dispositions assets acquired in the ordinary course of business or pursuant and not material to existing Contractsthe Company and its Subsidiaries taken as a whole;
(viiv) sell, lease, license (as licensor of Intellectual Property Rights of the Company), mortgage, encumber or otherwise dispose any of its properties or assets, other than sales, leases or licenses of products or services in the ordinary course of business consistent with past practice, enter into or amend in any and not material respect any Contractto the Company and its Subsidiaries taken as a whole;
(viiivi) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, such indebtedness or make any loans, advances or capital contributions to to, or other investments in, any other person (other than a subsidiary of the Company), in each caseperson, other than in indebtedness, loans, advances, capital contributions and investments between the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of Company and any of its directors, officers wholly owned Subsidiaries or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with between any of its present such wholly owned Subsidiaries or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company management activities carried on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xviivii) materially change alter (through merger, liquidation, reorganization, restructuring or in any other fashion) the corporate structure or ownership of its business policiesthe Company (other than as provided in Sections 4.1(a)(ii)(A), (B) and (C)) or any Subsidiary;
(xviiiviii) other than enter into, adopt or amend any severance plan, agreement or arrangement, Company Plan or employment or consulting agreement, except as required by applicable law and except for entering into any consulting agreements in the ordinary course of business consistent with past practice;
(ix) increase the compensation payable or to become payable to its directors, enter into any lease officers or employees (as lessor except for increases in the ordinary course of business consistent with past practice in salaries or lessee); sell, abandon wages of employees of the Company or make any other disposition of any of its assets, properties Subsidiaries who are not officers of the Company or businesses; grant or suffer any Lien on any of its assetsSubsidiaries) or grant any severance or termination pay to, properties or businessesenter into or amend any employment or severance agreement 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, agreement, 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 any change to accounting policies or procedures (other than actions required to be taken by generally accepted accounting principles);
(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) make any tax election or settle or compromise any material federal, state, local or foreign income tax liability;
(xiv) enter into, amend or terminate any noncompetition agreement or any agreement or contract pursuant to which any third party is granted marketing, distribution, material manufacturing or any exclusive rights with respect to any Company product, process or technology; amend the Noncompetition Agreements or make or agree to make any new capital expenditure or expenditures which, individually, is in excess of $10,000,000 or, in the aggregate, are in excess of $60,000,000 at any time prior to October 31, 1998 (or in excess of $80,000,000 at any time);
(xv) 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;
(xvi) initiate any litigation or arbitration proceeding or settle or compromise any material litigation or arbitration proceeding; or
(xixxvii) agree authorize, recommend, propose or announce an intention to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
(b) Between During the period from the date of this Agreement and to the Effective TimeTime of the Merger, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company Parent shall not, and shall cause each not permit any of is subsidiaries not its Subsidiaries to, directly or indirectly, take any action without the prior written consent of the Company:
(i) to cause its representations and warranties declare, set forth aside, or pay any cash dividends on, or make any other cash distributions in ARTICLE III to be untrue in respect of, any material respect; or capital stock of Parent;
(ii) that wouldamend the Parent Charter or the Parent Bylaws;
(iii) alter (through liquidation, reorganization or restructuring) the corporate structure of Parent; or
(iv) authorize, recommend, propose or announce an intention to do any of the foregoing, or would reasonably be expected toenter into any contract, individually agreement, commitment or in the aggregate, prevent, materially delay or materially impede the consummation arrangement to do any of the Merger foregoing. Notwithstanding the foregoing, nothing contained in this Agreement shall prohibit Parent from adopting a stockholder rights plan and issuing securities pursuant thereto or amending the other transactions contemplated by this AgreementParent Charter to increase the number of shares authorized thereby or amending the Parent Bylaws to change the number of directors of Parent.
Appears in 1 contract
Sources: Merger Agreement (Tellabs Inc)
Conduct of Business Pending the Merger. Section 5.1 SECTION 5.1. Conduct of Business of by the Company Pending the Merger.
(a) Between . 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 or the Effective Time, unless the Acquiror shall otherwise agree in writing, which agreement shall not be unreasonably withheld or delayed, 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 as otherwise contemplated by this Agreementin, as disclosed the ordinary course of business and in the SEC Reports filed prior manner substantially consistent with past practice; and the Company shall use reasonable commercial efforts to preserve substantially intact the date business organization of this Agreementthe Company and its subsidiaries, to keep available the services of the present officers of the Company and to preserve the present material 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. Except as set forth in Section 5.1 of the Company Disclosure Schedule, Schedule or as required otherwise contemplated by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, 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 the Effective Time, directly or indirectly do, any of the following without the prior written consent of the Acquiror, which consent shall not be unreasonably withheld or delayed:
(ia) amend or otherwise change its the Certificate of Incorporation or By-Laws or any similar governing instrumentsBylaws of the Company;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests interest (including, without limitation, any phantom interest) in the Company, any of its subsidiaries or affiliates (except for the issuance of Company Common Shares issuable pursuant to Stock Options listed in Section 2.11(c) of the Company Disclosure Schedule);
(c) sell, pledge, dispose of or encumber any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), assets of the Company or any of its subsidiaries (except for (Ai) sales of assets in the issuance ordinary course of Common Shares upon business and in a manner substantially consistent with past practice, including sale and leaseback transactions and the exercise disposal of Options surplus real property, (ii) disposition of obsolete or worthless assets, and (iii) sales of immaterial assets not in connection with other stock-based awards outstanding as excess of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)$10,000;
(iiii) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a wholly owned subsidiary of the Company may declare and pay a dividend or otherwisemake advances to its parent or the Company, with respect to (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (except for iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any dividend subsidiary to purchase, repurchase, redeem or distribution by a subsidiary otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, Company Common Shares or any option, warrant or right, directly or indirectly, to acquire Company Common Shares, or propose to do any of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (foregoing; except for the acquisition acceleration of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares options pursuant to the terms of a the Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests Plans and the exercise of any of the Company’s subsidiariessuch options;
(vi) make any acquisition of acquire (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or other business organization or division thereof;
, (viii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personperson or, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than except in the ordinary course of business consistent with past practice, pursuant make any loans or advances (other than loans or advances to letters or from direct or indirect wholly owned subsidiaries), (iii) enter into or amend any material contract other than in the ordinary course of credit business; (iv) authorize any capital expenditures or otherwisepurchases of fixed assets; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 5.1(e);
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Af) increase the compensation payable or fringe benefits of to become payable to any of its directors, officers or its general pay scale for other employees, except for increases in salary or wages of employees (of the Company or its subsidiaries in accordance with past practice or, except in the ordinary course of business with respect or pursuant to employees who are not directors agreements, plans or officers)policies in effect prior to the date of this Agreement, (B) grant any severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting employment or severance agreement with, any director or arrangement with any officer of its present the Company, or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other amounts to plan, agreement, trust, fund, policy or arrangement for the benefit of any officer current or employee other than as set forth in Section 3.24 former directors or officers of the Company Disclosure ScheduleCompany, except, in each case, as may be required by law;
(xig) except to conform to GAAP, 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 change in material tax election inconsistent with past practice or settle or compromise any accounting principlesmaterial federal, state, local or foreign tax liability, except as may be appropriate to conform to changes the extent the amount of any such settlement has been reserved for in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect theretothe financial statements contained in the Company SEC Reports;
(xiii) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where reserved against in the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by financial statements contained in the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company SEC Reports or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than incurred in the ordinary course of business and consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixj) take, or agree in writing or otherwise to take take, any of the actions described in this Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between 5.1, or any action which would make any of the date representations or warranties of the Company contained in this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly untrue or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue incorrect in any material respect; respects or (ii) that would, prevent the Company from performing in all material respects or would reasonably be expected to, individually or in cause the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this AgreementCompany not to perform its covenants hereunder.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) Between . Each of the Company and the Stockholder covenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent agree in writing (which consent writing, the Company shall, and the Stockholder shall not cause the Company to, conduct its business and shall cause the businesses of its subsidiaries to be unreasonably withheldconducted in all material respects in the ordinary course of business; and the Company shall, delayed or conditioned)and the Stockholder shall cause the Company to, (A) use all reasonable commercial efforts to preserve substantially intact the business organization of the Company and its subsidiaries shall be conducted in its ordinary course taken as a whole, to keep available the services of business the present key officers, employees and consultants of the Company shall use and its reasonable best efforts subsidiaries taken as a whole and to preserve substantially intact its business organization, and material business relationships, (B) the present relationships of the Company shall perform and its obligations under 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 contemplated by this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shall, and the Stockholder shall cause the Company not to, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its the Certificate of Incorporation or By-By- Laws of the Company or any similar governing instrumentsof its subsidiaries;
(iib) issue, deliverissue (except for the issuance of shares upon the exercise of any outstanding stock options), sell, pledge, dispose of or encumber encumber, or authorize the issuance (except for the issuance of shares upon the exercise of any outstanding stock options), sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests interest (including, without limitation, any phantom interest) in the Company or any voting securities of its subsidiaries.
(including but not limited to stock appreciation rightsc) sell, phantom stock pledge, dispose of or similar instruments), encumber any assets of the Company or any of its subsidiaries (except for (Ai) sales of assets in the issuance ordinary course of Common Shares upon the exercise business and in a manner consistent with past practice and (ii) dispositions of Options obsolete or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Planworthless assets);
(iiii) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a wholly owned subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or otherwise, with respect to reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, 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, including the Stock Options, except for with respect to Stock Options, to the extent the Company may be otherwise contractually required, or enter into any dividend or distribution by a subsidiary agreement to do any of the Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), ) any business or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
division; (viii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), except in each case, other than case in the ordinary course of business consistent with past practice, pursuant or make any loans or advances; (iii) enter into or amend any contract or agreement other than in the ordinary course of business; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $100,000 for the Company and its subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement to letters effect any of credit or otherwisethe matters prohibited by this Section 4.1(e);
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Ai) increase the compensation payable or fringe benefits of any of to become payable to its directorsexecutive officers, officers directors or employees (except in the ordinary course of business consistent with respect to employees who are not directors or officers), past practice; (Bii) grant any additional severance or termination pay not provided for under to, or enter into any Employee Benefit Plannew employment or severance agreements with, any director, executive officer or current employee of the Company or its subsidiaries; (Ciii) enter into any employment, consulting employment or severance agreement or arrangement with any new employees of the Company or its present subsidiaries except in the ordinary course of business consistent with past practice; or (iv) establish, adopt, enter into or amend any collective bargaining, profit sharing, thrift, restricted stock, pension, retirement, deferred compensation or severance plan, trust, fund or policy for the benefit of current or former directors, officers or employees of the Company or any of its subsidiaries, except, in each case, as may be required by law;
(g) except as required under generally accepted accounting principles, take any action to change in any material respect the accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable) of the Company or any subsidiary (except in the case of subsidiaries to conform to the Company's policies and procedures);
(h) make any tax election inconsistent with past practice or settle or compromise any federal, state, local or foreign tax liability or agree to an extension of a statute of limitations, in each case which would be material to the Company and its subsidiaries taken as a whole;
(i) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) material to the Company and its subsidiaries taken as a whole, other employeesthan the payment, except for offers of employment discharge or satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into or amend reserved against in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth the financial statements contained in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate SEC Reports filed prior to conform to changes in statutory the date of this Agreement or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixj) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.1 (a) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreementabove.
Appears in 1 contract
Sources: Merger Agreement (Hunter Terry L)
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the (i) The Company Pending the Merger.
(a) Between covenants and agrees that, between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date Time or earlier termination of this Agreement, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law on SCHEDULE 5.1(a) or unless Parent the Purchaser shall otherwise consent in writing writing:
(which consent shall not be unreasonably withheld, delayed or conditioned), (Aa) the business of the Company and its subsidiaries Subsidiaries shall be conducted in only in, and the Company shall not and shall cause its Subsidiaries not to take any action except in, the ordinary course of business and in a manner consistent with past practice and in compliance in all material respects with all applicable Laws; and the Company shall will use its commercially reasonable best efforts to preserve substantially intact its the business organization, and material business relationships, (B) organization of the Company shall perform and its obligations under this AgreementSubsidiaries, 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 their respective customers, suppliers and other Persons with which the Company or any of its Subsidiaries has significant business relations.
(Cb) without limiting the foregoing, neither the Company nor any of its subsidiaries shall:
(i) Subsidiaries will amend or otherwise change its their respective Certificate of Incorporation or By-Laws (or any similar governing instrumentscomparable organizational documents);
(c) the Company will not declare, set aside or pay any dividend or other distribution payable in cash, securities or property with respect to its capital stock, other than the payment of quarterly cash dividends on the Shares not in excess of $0.07 per Share with usual record and payment dates in accordance with past dividend practice; and neither the Company nor any of its Subsidiaries will (i) split, combine or reclassify any of its capital stock (ii) issue, deliversell, selltransfer, pledge, dispose of or encumber any additional shares of capital stock, ownership interests or voting securitiesof, or any securities convertible into or exchangeable for, or options, warrants, convertible securities calls, commitments or other rights of any kind to acquire or receive acquire, any shares of capital stock, stock of any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), class of the Company or any of its subsidiaries (except for (A) the issuance Subsidiaries, other than issuances of Common Shares upon the exercise of Options pursuant to securities, options, warrants, calls, commitments or in connection with other stock-based awards outstanding as of rights existing at the date of this Agreementhereof and previously disclosed to the Purchaser in writing (including as disclosed in the SEC Reports); (iii) incur any long-term indebtedness (whether evidenced by a note or other instrument, pursuant to a financing lease, sale-leaseback transaction, or otherwise) or incur short-term indebtedness other than, in each case, under lines of credit existing on the date hereof, or in accordance connection with the terms of any Company Stock Option Plancapital expenditures permitted by SECTION 5.1(h) below; (iv) redeem, purchase or (B) issuances in accordance with the Rights Plan);
(iii) declareotherwise acquire, set asidedirectly or indirectly, 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 any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of securities except as required by and in accordance with Restricted Stock Award Agreements existing on the Company’s subsidiaries;
date hereof; or (v) make any acquisition of (whether by mergerenter into, consolidation amend, terminate, renew or acquisition of stock or substantially all of the assets), or make any investment fail to use reasonable efforts to renew in any interest inmaterial respect any (x) Material Contract or (y) Identified Contract except, any corporationin each case, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice; provided, that the limitations set forth in SECTION 5.1(c) shall not apply to any transaction between the Company and its Subsidiaries.
(d) neither the Company nor any of its Subsidiaries will, except for normal increases in the ordinary course of business consistent with past practice or pursuant to employment contracts in effect on the date hereof: (i) grant any increase in the compensation or benefits payable or to become payable by the Company or any of its Subsidiaries to any employee; (ii) adopt, enter into, amend or otherwise increase, or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under any bonus, incentive compensation, deferred compensation, severance, termination, change in control, retention, hospitalization or other medical, 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 (iii) enter into or amend in any material respect any Contractemployment or collective bargaining agreement or, except in accordance with the existing written policies of the Company or existing contracts or agreements and as disclosed on SCHEDULE 5.1(d) of the Disclosure Schedule, grant any severance or termination pay to any officer, director or employee of the Company or any of its Subsidiaries;
(viiie) authorize neither the Company nor its Subsidiaries will change in any material new capital expenditures which aremanner the accounting principles used by it unless required by GAAP (or, in the aggregateif applicable with respect to Subsidiaries, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Scheduleforeign generally accepted accounting principles);
(ixf) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to neither the Company nor any of its Subsidiaries shall acquire by merging or consolidating with, by purchasing an equity interest in or a portion of the terms of any indebtedness for borrowed moneyassets of, or assumeby any other manner, guarantee any business or endorseany corporation, partnership, association or other business organization or division thereof, or otherwise as an accommodation become responsible for, the obligations acquire any assets of any person, or make any loans, advances or capital contributions to any other person Person (other than a subsidiary (i) as permitted by SECTION 5.1(h) or (ii) the purchase of the Company), in each case, other than assets from suppliers or vendors in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise);
(xg) except to neither the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of Company nor any of its directorsSubsidiaries shall sell, officers lease, license, exchange, transfer or employees otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any of its assets except (except i) the assets set forth on SCHEDULE 5.1(g) of the Disclosure Schedule, (ii) immaterial assets in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan practice; or (Eiii) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than inventory in the ordinary course of business consistent with past practice;
(xviih) materially change neither the Company nor any of its business policiesSubsidiaries will enter into commitments for capital expenditures involving more than $1,000,000 in the aggregate or as may be necessary for the maintenance of existing facilities, machinery and equipment in good operating condition and repair in the ordinary course of business, or as reflected in the capital plan of the Company previously provided to the Purchaser;
(xviiii) neither the Company nor any of its Subsidiaries shall release any third party from its obligations (i) under any existing standstill agreement or arrangement relating to a proposed Acquisition Proposal (as defined in SECTION 5.2(a)), unless the Board of Directors of the Company determines in good faith after consultation with its outside counsel (who may be its regularly engaged outside counsel), that the failure to do so would result in a breach of its the fiduciary duties under applicable Law, or (ii) otherwise under any confidentiality or other than similar agreement, except for modifications of any such obligations under existing commercial arrangements in the ordinary course of business consistent with past practice;
(j) the Company and its Subsidiaries shall not mortgage, pledge, hypothecate, grant any security interest in, or otherwise subject to any other lien on any of its properties or assets, except in the ordinary course of business consistent with past practice;
(k) neither the Company nor its Subsidiaries shall compromise, settle, grant any waiver or release relating to or otherwise adjust any 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 (x) in the ordinary course of business consistent with past practice, enter into any lease (as lessor y) involving a payment by the Company or lessee); sell, abandon or make any other disposition of any of its assetsSubsidiaries not in excess of $250,000 in the aggregate, properties or businesses; grant or suffer any Lien (z) set forth on SCHEDULE 5.1(k) of the Disclosure Schedule, following prior notice to and consultation with the Purchaser;
(l) except in the ordinary course of business consistent with past practice, neither the Company nor any of its assetsSubsidiaries will make or rescind any express or deemed election or settle or compromise any material claim or material action relating to U.S. federal, properties state or businesseslocal Taxes, or change any of its material methods of accounting or of reporting income or deductions for U.S. federal income tax purposes;
(m) neither the Company nor any of its Subsidiaries will make any loans, advances or capital contributions to, or investments in, any other Person, except pursuant to and in accordance with agreements existing on the date hereof that are described on SCHEDULE 5.1(m) 33 38 of the Disclosure Schedule and for loans, advances, capital contributions or investments between any wholly owned Subsidiary of the Company and the Company or another wholly owned Subsidiary of the Company and except for employee advances for expenses in the ordinary course of business consistent with past practice; or
(xixn) agree neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between . During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company agrees as to itself and each of its Subsidiaries, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth extent that BPW shall consent in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent advance in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or as expressly required or permitted by this Agreement or the Ancillary Agreements (A) including amendment and restatement of the business $150M Revolving Credit Agreement and the concurrent termination of the Support Letters), or as otherwise indicated in Section 5.1 of the Company and Disclosure Schedule, or to the extent required by applicable law or a Governmental Entity of competent jurisdiction, to carry on its subsidiaries shall be business in the ordinary course in substantially the same manner as previously conducted in all material respects and use commercially reasonable efforts to preserve intact its present business organization and advantageous business relationships and keep available the services of its current officers and employees. Without limiting the generality of the foregoing and except as expressly contemplated by this Agreement or the Ancillary Agreements (including amendment and restatement of the $150M Revolving Credit Agreement and the concurrent termination of the Support Letters) or expressly set forth on Section 5.1 of the Company Disclosure Schedule or the extent required by applicable law or a Governmental Entity of competent jurisdiction, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, without the prior written consent of BPW (which consent shall not be unreasonably withheld), the Company shall not and shall not permit any of its Subsidiaries to:
(a) adopt or propose any amendment to its Organizational Documents;
(b) other than grants of Company Stock Rights to new non-executive officer hires in the ordinary course of business consistent with past practice and except as required to consummate the Merger and the Company shall use its reasonable best efforts Warrant Exchange Offer and the transactions related thereto and to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform comply with its obligations under this AgreementAgreement and the Ancillary Agreements, (i) issue, pledge or sell (other than upon exercise of Company Stock Rights outstanding on the date of this Agreement upon payment of the exercise price thereof and (C) without limiting withholding of any Taxes required to be withheld), or propose or authorize the foregoingissuance, neither the pledge or sale of, or grant any Company nor Stock Rights or other awards with respect to shares of Company Common Stock or make any other agreements with respect to, any of its subsidiaries shall:
(i) amend or otherwise change its Certificate shares of Incorporation or By-Laws capital stock or any similar governing instruments;
other of its securities, (ii) issueamend, deliver, sell, pledge, dispose waive or otherwise modify any of or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights the terms of any kind to acquire option, warrant or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), option plan of the Company or any of its subsidiaries Subsidiaries, including the Company Stock Rights and the Company Stock Plans, or authorize cash payments in exchange for any Company Stock Rights granted under any of such plans, or (iii) adopt or implement any stockholder rights plan;
(c) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its stock or beneficial interests (including any dividend distribution payable in, or otherwise make a distribution of, shares of capital stock of any existing or subsequently formed Subsidiary of the Company), except for dividends, contributions or distributions made by or to the Company by or from any Subsidiary of the Company;
(Ad) split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any shares of its stock or beneficial interests, or any of its other securities;
(e) except pursuant to (x) applicable law or (y) the issuance terms of Common Shares upon a Company Employee Plan as in effect on the exercise date hereof, (i) increase in any manner the compensation or benefits payable or to become payable to any of Options its or its Subsidiaries’ current or former directors, officers or employees (whether from the Company or any of its Subsidiaries), or pay any amounts or benefits to, or increase any amounts payable to, any such individual not required by any Company Employee Plan, (ii) become a party to, establish, adopt, enter into, materially amend, commence participation in, terminate or commit itself to the adoption of any collective bargaining agreement or Company Employee Plan (or any arrangement which would have been a Company Employee Plan had it been in connection with other stock-based awards outstanding effect as of the date of this Agreement), in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declareprovide any funding for any rabbi trust or similar arrangement or in any other way secure the payment of compensation or benefits under any Company Employee Plan, set aside, make (iv) accelerate the vesting of or pay any dividend or other distribution, payable in cash, stock, property or otherwise, lapsing of restrictions with respect to any of its capital stock stock-based compensation or other long-term incentive compensation under any Company Employee Plans or (v) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Employee Plan or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except for any dividend as may be required by GAAP or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company)applicable law;
(ivf) reclassify(i) lease, combinelicense, splittransfer, subdivideexchange or swap, redeemmortgage (including securitizations), purchase or otherwise acquire dispose (whether by way of merger, consolidation, sale of stock or assets, or otherwise) of any shares material portion of its properties or Assets, including the capital stock of Subsidiaries (it being understood that the Company (except for foregoing shall not prohibit the acquisition sale of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions inventory in the ordinary course of business), except for (A) dispositions of Assets with a fair market value of less than $1,000,000, (B) transactions between any Subsidiary of the Company and the Company or another Subsidiary of the Company or (C) dispositions of excess inventory, property, leases, licenses, or other Assets or Fixtures and Equipment that the Company considers obsolete or unnecessary (including assets and licenses that were previously used by its J. ▇▇▇▇ business or pursuant to existing Contractssupport its J. ▇▇▇▇ business), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(viig) other than except as required under any Material Contracts as in effect as of the date hereof or as expressly contemplated by the Ancillary Agreements, or, to the extent in the ordinary course of business consistent with past practice, enter into related to any vendor financing arrangement or amend existing proprietary charge card arrangements in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, amounts that do not exceed $5,000,000 in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ixi) except for borrowings under the Company’s existing credit facilities, incur or modify in assume any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed moneyIndebtedness, or (ii) assume, guarantee or endorseguarantee, endorse or otherwise as an accommodation become liable or responsible for(whether directly, contingently or otherwise) for the obligations of any personother Person (other than a Company Subsidiary), (iii) make any acquisition of any other Person (other than a Company Subsidiary) or business or make or acquire any loans, advances or capital contributions to to, or investments in, any other person Person (other than a subsidiary Company Subsidiary) (including advances to employees), except for acquisitions, loans, advances, capital contributions or investments between any Subsidiary of the Company and the Company or another Subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (Civ) enter into any employment, consulting “keep well” or severance other agreement to maintain the financial condition of another entity (other than the Company or arrangement with any of its present Subsidiaries);
(h) make, alter, revoke or former directorsrescind any material express or deemed election relating to Taxes, officers settle or compromise any material Action, amend in any material respect any material Tax Return except in each case as required by law, file any income Tax Return that claims a deduction for or otherwise uses a net operating loss, or except as may be required by, or in order to conform to, applicable law, make any change to any of its material methods of reporting income or deductions (including any change to its methods or basis of write-offs of accounts receivable) for federal income Tax purposes from those employed in the preparation of its federal income Tax Return for the taxable year ending December 31, 2008;
(i) fail to maintain its existing material insurance coverage of all types in effect or, in the event any such coverage shall be terminated or lapse, to the extent available at reasonable cost, procure substantially similar substitute insurance policies which in all material respects are in at least such amounts and against such risks as are currently covered by such policies;
(j) make any material change to its methods of accounting as in effect on October 31, 2009 except as required by GAAP or the SEC or applicable law, or take any action, other employees, except for offers of employment than usual actions in the ordinary course of business and consistent with past practice practice, with employees who are not directors respect to accounting policies, unless required by GAAP or officers, the SEC or applicable law;
(Dk) establish, adopt, enter into or amend materially amend, terminate or extend any Material Contract, or waive, release, assign or fail to enforce any material rights or claims under any Material Contract, if such Material Contract or any such action or failure to act with respect to a Material Contract would reasonably be expected to impair the ability of the Company or Merger Sub to perform their respective obligations under this Agreement or any of the Ancillary Agreements or prevent or delay the consummation of the Merger or any of the other transactions contemplated by this Agreement or any of the Ancillary Agreements;
(l) take, or agree to commit to take, any action that is intended to result in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as of the conditions set forth in Section 3.24 7.1 or Section 7.3 not being satisfied;
(m) except as expressly contemplated by the Ancillary Agreements, engage in any transaction with, or enter into any agreement, arrangement, or understanding with, directly or indirectly, any Affiliate of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory which involves the transfer of material consideration or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in has a material financial impact on the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigationCompany, other than settlements pursuant to such agreements, arrangements, or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, understandings as of in effect on the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material Agreement or with respect to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any writeinter-down of the value of any assets or any write-off of notes or accounts receivable, other than company loans and/or transfers in the ordinary course of business consistent with past practice;
practice between any Subsidiary of the Company and the Company or another Subsidiary of the Company; (xviin) materially change pay or commit to pay any expenses or make or commit to make any capital expenditures in excess of its business policies;
$2,500,000 individually, or $12,500,000 in the aggregate (xviii) other than in capital expenditures for the ordinary course repair or maintenance of business consistent with past practice, enter into any lease (as lessor or lesseecapital Assets); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.;
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 6.01 Conduct of Business of by the Company Pending the Merger.
(a) Between . The Company agrees that, between the date of this Agreement and the Effective Time, except as required, permitted or otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, Agreement or as set forth in Section 5.1 6.01 of the Company Disclosure ScheduleSchedule and except with the prior written consent of Parent, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed conditioned or conditioned)delayed, (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shall:
(i) amend or otherwise change its Certificate of Incorporation or By-Laws or any similar governing instruments;
(ii) issue, deliver, sell, pledge, dispose of or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary businesses of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of Operating Partnership and the Company’s subsidiaries;
(v) make 's other Subsidiaries shall be conducted, and the Company, the Operating Partnership and the Company's other Subsidiaries shall not take any acquisition of (whether by mergeraction except, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
; and the Company shall use its commercially reasonable efforts to preserve (viiii) authorize any material new capital expenditures which are, in substantially intact the aggregate, in excess business organization of the Company’s capital expenditure budget , the Operating Partnership and the Company's other Subsidiaries, to keep available the services of its present officers, managers and employees and to preserve the current relationships of the Company, the Operating Partnership and the Company's other Subsidiaries with lessees and other Persons with which the Company, the Operating Partnership or any other Subsidiary of the Company has significant business relations and (ii) the Company's status as a REIT within the meaning of the Code. Except as required, permitted or otherwise contemplated by this Agreement or as set forth on Section 3.8 6.01 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary none of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of Operating Partnership and the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation's other Subsidiaries shall, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between between the date of this Agreement and the Effective Time, do any of the following without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that, with respect to consents required by the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective TimeSection 6.01, the Company shall notsend to the Parent Consent Addressees identified in Section 10.03 a written request for such consent and if Parent does not object in writing within two (2) Business Days after delivery of such initial request for consent, and the Company shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) send to cause its representations and warranties set forth the Parent Consent Addressees identified in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.Section
Appears in 1 contract
Sources: Merger Agreement (Eagle Hospitality Properties Trust, Inc.)
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of by the Company Pending the Merger.
(a) . Between the date of this Agreement and the Effective Time, unless Acquiror otherwise agrees in writing, the Company will conduct its business, and will cause the businesses of the Subsidiaries to be conducted only in, and the Company and the Subsidiaries will not take any action except in, the ordinary course of business in a manner consistent with past practices. During the foregoing period, the Company will use all reasonable efforts to preserve intact the business organization of the Company and the Subsidiaries; to keep available the services of the present officers, employees, and agents of the Company and the Subsidiaries (except with respect to such Persons as Acquiror shall advise the Company); and to preserve the present relationships of the Company and the Subsidiaries with customers, suppliers, and other Persons with which the Company or any Subsidiary has significant business relations. The Company shall promptly inform Acquiror in writing of any specific event or circumstance of which it is aware, or of which it receives notice, that has or is likely to have, individually or in the aggregate, taken together with the other events or circumstances, a material adverse effect on the current or future earnings of the Company or any Subsidiary, or which constitute a breach of any representations or warranties set forth in Article III hereof. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, as disclosed in neither the SEC Reports filed prior to Company nor any Subsidiary will, between the date of this AgreementAgreement and the Effective Time, as set forth in Section 5.1 directly or indirectly do, any of the Company Disclosure Schedulefollowing without the prior written consent of Acquiror, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shall:
(ia) amend or otherwise change its the Certificate of Incorporation or By-Laws Bylaws (or similar organizational documents) of the Company or any similar governing instrumentsof the Subsidiaries;
(iib) sell, encumber, pledge, or otherwise dispose of any material operating or investment assets of the Company or any of the Subsidiaries, except for sales of assets in the ordinary course of business consistent with past practices;
(c) issue, deliver, sell, pledge, dispose of of, or encumber encumber, or authorize the issuance, sale, pledge, disposition, or encumbrance of, any shares of capital stockstock of, ownership interests or voting securities, or any options (including employee stock options), warrants, convertible securities securities, or other rights of any kind to acquire or receive any shares of capital stockstock of, or any other ownership interests or any voting securities (including but not limited to stock appreciation rightsinterest in, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option PlanSubsidiaries, or (B) issuances in accordance with the Rights Plan)otherwise alter its capital structure;
(iiid) (i) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock, property property, or otherwiseany combination thereof) in respect of any of its capital stock, except that (A) the Company may pay regular quarterly dividends that are declared and paid in a manner consistent with past practices at a rate not to exceed $1.47 per Company Common Share per quarter prior to and including the quarter ended March 31, 1999, and $1.53 per Company Common Share per quarter following such quarter [(other than any calendar quarter in which stockholders of the Company will also be entitled to a dividend in respect of the Acquiror Common Stock)], and (B) any direct or indirect wholly-owned Subsidiary of the Company may declare and pay a dividend to its parent, or (ii) amend the terms of, repurchase, redeem, or otherwise acquire, or permit any subsidiary to amend the terms of, repurchase, redeem, or otherwise acquire, any of its capital stock, or propose to do any of the foregoing;
(e) amend the terms of, split, combine, or reclassify any of its capital stock (except or issue, or authorize or propose the issuance of, any other securities in respect of, in lieu of, or in substitution for any dividend or distribution by a subsidiary shares of the Company to the Company or another wholly owned subsidiary of the Company)its capital stock;
(ivf) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition purchase of stock or substantially all of the assets), joint venture, or make any investment in any interest in, otherwise) any corporation, partnership partnership, or other business organization or division thereof;
(vig) sell except as set forth on Schedule 5.1, (i) incur any indebtedness for borrowed money, or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) issue any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assetsdebt securities, other than sales or dispositions in the ordinary course of business or pursuant to its existing Contracts;
(vii) other than line of credit in the ordinary course of business consistent with past practicepractices or in an aggregate additional principal amount that does not exceed $1,000,000; (ii) assume, enter into or amend in any material respect any Contract;
guarantee (viii) authorize any material new capital expenditures which are, in other than the aggregate, in excess guarantee of indebtedness of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness Subsidiaries for borrowed money), or assume, guarantee or endorseendorse (other than the endorsement of checks and other drafts for collection), or otherwise as an accommodation become responsible for, the obligations of any personPerson, except in the ordinary course of business consistent with past practices; (iii) enter into any credit facility or commitment that is not terminable without the payment of penalty or premium or is not entered into in the ordinary course of business consistent with past practices; or (iv) make any loans or advances, except in the ordinary course of business consistent with past practices;
(h) authorize any capital expenditures other than those contained in the 1998 and 1999 capital budgets provided to Acquiror that are, in the aggregate, in excess of $1,000,000 for the Company and the Subsidiaries taken as a whole (provided that the Company shall consult with Acquiror prior to making any unbudgeted capital expenditure in excess of $500,000);
(i) except as expressly contemplated by Section 6.7(a) of this Agreement, make any change in the salaries or other compensation payable or to become payable to, or make any loansadvance (excluding advances for ordinary business expenses) or loan to, advances any employee, or capital contributions material change or material addition to, or material modification of, other benefits (including any bonus, profit-sharing, pension or other plan in which any of the employees participate) to which any of the employees may be entitled, or any payments to any other person (pension, retirement, profit-sharing, bonus or similar plan other than a subsidiary in any such case (i) in the ordinary course consistent with past practice, (ii) increases in compensation required by the terms of existing employment agreements or other binding commitments that have been disclosed on Schedule 3.16, (iii) as required by law, or (iv) as required by the collective bargaining agreements listed as such on Schedule 3.16 hereto (the "Collective Bargaining Agreements");
(j) except as expressly contemplated by Section 6.7(a) of this Agreement (i) grant any severance or termination pay, except pursuant to agreements in effect on the date of this Agreement that have been disclosed on Schedule 3.16, (ii) enter into any employment agreement with any director, officer, or employee of the Company)Company or any Subsidiary, (iii) establish, adopt, enter into, or amend any collective bargaining agreement or 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 current or former directors, officers, or employees of the Company or any Subsidiary, and (iv) take any action with respect to any Benefit Plan (including but not limited to the recognition of the transaction contemplated by this Agreement as a change of control) that will cause a discretionary acceleration or increase in each casethe vesting, exercisability, or benefits provided by any such Benefit Plan;
(k) modify, amend, terminate or enter into any material contract, agreement or commitment other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwisepractices;
(xl) change its method of accounting as in effect at December 31, 1997 except as may be required by GAAP and as is concurred with by the Company's independent auditors;
(m) make or change any election, change an annual accounting period, file any amended Return, enter into any closing agreement, settle any Tax claim or assessment relating to the extent required under Company or any Employee Benefit Plan Subsidiary, surrender any right to claim a refund of Taxes, consent to any extension or as required by waiver of the limitation period applicable lawto any Tax claim or assessment relating to the Company or any Subsidiary, take any other action or omit to take any action, if any such election, adoption, change, amendment, agreement, settlement, surrender, consent, or other action or omission could have the effect of materially increasing the Tax liability of the Company, any Subsidiary, Acquiror, or any Affiliate of Acquiror;
(An) increase alter in any material respect the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business customary practices with respect to employees who are not directors the credit and collection policies, procedures and practices with respect to accounts receivable of the Company and the Subsidiaries or officersthe provision of discounts, rebates or allowances;
(o) dispose of or intentionally fail to keep in effect any rights in, to or for the use of any Permit of the Company or any Subsidiary which, individually or in the aggregate, would have a Material Adverse Effect;
(p) pay, discharge, or satisfy any material claims, liabilities, or obligations (absolute, accrued, asserted, or unasserted, contingent or otherwise), (B) grant any severance other than the payment, discharge, or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into or amend reserved against in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 the financial statements of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return and consistent with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refundpast practices;
(xiiiq) settle release or compromise assign any litigationmaterial rights or claims, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business in a manner consistent with past practicepractices;
(xviir) materially change permit any of its business policies;
(xviii) other than insurance policy naming it as a beneficiary or loss payee to be cancelled or terminated, except in the ordinary course of business in a manner consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businessespractices; or
(xixs) agree enter into an agreement to take do any of the actions described referred to in Section 5.1(a)(iparagraphs (a) through Section 5.1(a)(xviii)(r) above.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Sources: Merger Agreement (White William S)
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between . From the date of this Agreement until the earlier of the Effective Time and the Effective Timevalid termination of this Agreement in accordance with Article VIII, except (i) as required or otherwise contemplated expressly provided for by this Agreementthe Transaction Documents, (ii) as disclosed in the SEC Reports filed prior to the date of this Agreement, as specifically set forth in Section 5.1 of the Company Disclosure ScheduleLetter, (iii) as required by law to comply with applicable Law, or unless (iv) as Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed conditioned or conditioned), delayed):
(Aa) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to, and shall use its reasonable best efforts to cause each of its Subsidiaries to, conduct its and their respective businesses and operations in all material respects in the ordinary course of business and preserve substantially intact its and each of its subsidiaries’ business organization, and material business relationships, (B) including keeping available the Company shall perform its obligations under this Agreementservices of current executive officers, and to preserve the present relationships with those Persons having significant business relationships with the Company, and
(Cb) without limiting the foregoing, neither the Company nor shall not and shall cause each of its Subsidiaries not to do any of its subsidiaries shallthe following:
(i) amend amend, adopt any amendment to or otherwise change its Certificate Memorandum and Articles of Incorporation Association or By-Laws or any similar governing instrumentsother Organizational Documents;
(ii) issueeffect or commence any complete or partial liquidation or dissolution, delivermerger, sellconsolidation, pledgerestructuring, dispose of or encumber any shares of capital stockrecapitalization, ownership interests or voting securitiesreorganization, or any options, warrants, convertible securities similar transaction;
(iii) merge or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of consolidate the Company or any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection Subsidiaries with any other stock-based awards outstanding as of the date of this AgreementPerson, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of such transactions among the Company to the Company or another and its wholly owned subsidiary of the Company)Subsidiaries;
(iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any business or any corporation, partnership or other business organization or division thereofthereof or any property, assets or securities, in each case, except for (A) purchases of pharmaceutical ingredients, inventory and other assets in the ordinary course of business, (B) acquisitions or investments pursuant to existing Contracts in effect as of the date hereof, (C) investments in or other transactions with any wholly owned Subsidiary of the Company, or (D) capital expenditures in accordance with Section 5.1(b)(xiii);
(v) issue, sell, grant, authorize, pledge, encumber or dispose of (or authorize the issuance, sale, grant, authorization, pledge, encumbrance or disposition of) any Equity Securities of the Company or any of its Subsidiaries, except for (A) any issuance, sale or disposition to the Company or a wholly owned Subsidiary of the Company by any Subsidiary of the Company, (B) any issuance of Shares upon the exercise of Company Options or Company Warrants or settlement of Company RSUs, in each case outstanding as of the date hereof in accordance with their terms in effect on the date hereof, or (C) withholding of Shares in full or partial payment of any purchase price or exercise price and any applicable Taxes payable by such holder upon the exercise, settlement or lapse of conditions or restrictions on the Company Equity Awards, in each case outstanding as of the date hereof in accordance with their terms in effect on the date hereof;
(vi) sell reclassify, combine, split, reverse split, consolidate, recapitalize, subdivide, redeem, purchase or otherwise acquire any Equity Security of the Company or any of the Company’s Subsidiaries or consummate or authorize any other similar transaction with respect to shares of capital stock or ownership interests of the Company or any of its Subsidiaries (or any warrants, options or other rights to acquire the foregoing) other than (A) the acquisition by the Company of Shares in connection with the surrender of Shares by holders of Company Equity Awards or the withholding of Shares in full or partial payment of any purchase price or exercise price and any applicable Taxes payable by such holder upon the exercise, settlement or lapse of conditions or restrictions on the Company Equity Awards, in each case, outstanding as of the date hereof in accordance with their terms in effect on the date hereof, (B) in connection with the forfeiture of Company Equity Awards outstanding as of the date hereof in accordance with their terms in effect on the date hereof, (C) purchase, transfer or other disposal between or among the Company and its wholly owned Subsidiaries, or (D) pursuant to existing Contracts in effect as of the date hereof;
(vii) create or incur any Lien, other than Permitted Liens, on any assets of the Company or its Subsidiaries, other than (A) increased obligations under existing Liens resulting from indebtedness incurred in accordance with Section 5.1(b)(xvii), (B) as required pursuant to existing Contracts in effect as of the date hereof as set forth in Section 5.1(b)(xiv) of the Company Disclosure Letter, (C) in the ordinary course of business or (D) pursuant to Incidental Contracts;
(viii) authorize or make any loans, advances (other than ordinary course business expenses, any advance or prepayment for any capital expenditure otherwise permitted under Section 5.1(b)(xiii)), capital contributions to, or other investments in, any Person (other than the Company or any of its Subsidiaries) in excess of $500,000 (or its equivalent in RMB or another currency) in the aggregate;
(ix) sell, transfer or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell sell, lease, assign, license, transfer, exchange, swap, abandon, knowingly fail to renew or permit to lapse or expire, grant an easement or covenant not to assert with respect to, grant any rights under, or subject to any Lien (other than Permitted Liens), fail to maintain or defend in full force and effect (including any failure to protect the confidentiality of any material Intellectual Property, or disclose, license, release, deliver, escrow or otherwise make available or grant any rights to any source code), or dispose of any material assets, rights or properties (including material Intellectual Property) other than sales (A) sale or dispositions disposition of inventory (or, in the case of Intellectual Property, non-exclusive licenses or covenants not to sue which are (x) not material to the business of the Company and its Subsidiaries, taken as a whole, and (y) incidental to the primary purpose of the applicable arrangement) in the ordinary course of business or are otherwise pursuant to an Incidental Contract, (B) pursuant to existing Contracts;
Contracts in effect as of the date hereof, (viiC) other between or among the Company and its wholly owned Subsidiaries, (D) with respect to tangible assets with a fair market value of less than $125,000 (or its equivalent in RMB or another currency) in a single transaction or series of related transactions or are otherwise dispositions or abandonments of immaterial assets in the ordinary course of business, or (E) such actions that are taken for the purpose of permitting to expire Intellectual Property registrations expiring at the end of their statutory terms;
(x) unless mandated by a Governmental Entity, (A) make any changes to, discontinue, terminate or suspend any ongoing research and development program or clinical trial relating to a Company Product or (B) commence, alone or with any third party, any research and development program or clinical trial that has not been disclosed to Parent prior to the date of this Agreement;
(xi) make any material submissions or filings to the FDA, NMPA or any other applicable health regulatory Governmental Entity related to the Company’s business consistent and operations or any Company Product, without, to the extent practicable and legally permissible, (A) providing Parent with past practicea reasonable opportunity to review and comment on such submissions or filings and (B) using good faith efforts to incorporate any of Parent reasonable comments that are received in a timely fashion;
(xii) declare, set aside, establish a record date for, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of the Company’s or its Subsidiaries’ capital stock, (except for any dividend or distribution by a Subsidiary of the Company to the Company or any Subsidiary of the Company);
(xiii) authorize, make or incur any capital expenditures or obligations or liabilities in connection therewith, other than (A) any capital expenditures contemplated by the capital expenditure budget of the Company and its Subsidiaries made available to Parent prior to the date of this Agreement as set forth in Section 5.1(b)(xiii) of the Company Disclosure Letter, and (B) capital expenditures of less than $200,000 (or its equivalent in RMB or another currency) individually or $500,000 (or its equivalent in RMB or another currency) in the aggregate;
(xiv) other than Incidental Contracts, (A) enter into any Contract that would have been a Material Contract if it had been in effect as of the date hereof, except for any statement of work issued under an existing Material Contract, in each case not in excess of $500,000 individually, or (B) modify or amend in any material respect respect, terminate, permit to expire or waive any material rights or obligations under any Material Contract;
(viiixv) authorize enter into any Contract or make any other commitment pursuant to which the Company or any of its Affiliates would receive, directly or indirectly, the benefit of any funding, grants, facilities, services or other resources of a Governmental Entity, including any such commitment pursuant to which such Governmental Entity would be entitled to any ownership interest or other right in or to any Intellectual Property;
(xvi) voluntarily terminate, suspend, abrogate, amend, let lapse or modify any material new capital expenditures which arePermit in a manner materially adverse to the Company and its Subsidiaries, in taken as a whole;
(xvii) except for intercompany loans between the aggregateCompany and any of its wholly owned Subsidiaries or between any wholly owned Subsidiaries of the Company, incur, prepay, issue, syndicate, refinance, or otherwise become liable for, indebtedness for borrowed money in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
$500,000 (ix) except for borrowings under the Company’s existing credit facilitiesor its equivalent in RMB or another currency), incur or modify in any material respect in an manner adverse to the Company the terms of any such indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, endorse the obligations of any person, or make any loans, advances or capital contributions to any other person Person (other than a subsidiary wholly owned Subsidiary of the Company), in each case, in excess of $500,000 (or its equivalent in RMB or another currency), other than (A) guarantees incurred in compliance with this Section 5.1 by the Company of indebtedness of Subsidiaries of the Company, (B) the incurrence or guarantee of indebtedness under any existing credit facilities or other Contracts as in effect on the date hereof in an aggregate amount not to exceed the maximum amount authorized under the Contracts evidencing such indebtedness, or (C) in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwisebusiness;
(xxviii) except to the extent required under by Law, pursuant to this Agreement or the terms of any Employee Benefit Company Plan as in effect on the date hereof, or as required mandated by applicable lawa Governmental Entity, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers)Company Employee, (B) grant or pay (or otherwise increase) any severance cash or equity-based incentive compensation (including any Company Equity Awards) change in control, retention, severance, termination pay not provided or other similar arrangement for under any Employee Benefit PlanCompany Employee, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into into, amend or amend terminate any Company Plan or any other compensation or benefit plan, program, agreement or arrangement that would be a Company Plan if in effect on the date of this Agreement, (D) grant, cancel or forgive any loan or advance of any money or any other property to any Company Employee, (E) hire, promote or terminate any employee at (or who would be at) the level of Vice President or above (other than a termination for cause as determined by the Company consistent with past practice), (F) increase the use of labor dispatch employees, or (G) take any action to accelerate the vesting, funding or payment of any compensation, or benefits under, any Company Plan or otherwise;
(xix) change, in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonusrespect, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any financial accounting principles, except as may be appropriate required to conform to changes in statutory applicable Law or regulatory accounting rules or generally accepted accounting principles GAAP or regulatory requirements with respect thereto;
(xiixx) other than in except to the ordinary course of business or as extent required by applicable lawLaw, (A) make any Tax election adopt or change any material Tax accounting method of accounting, (B) enter into make, revoke, or change any settlement material Tax election, claim, surrender, notice or compromise of any Tax liabilityconsent, (C) file affirmatively surrender any amended Tax Return claim for a refund of a material amount of Taxes, (D) enter into any closing agreement or other written ruling or agreement with a Taxing Authority with respect to any Taxa material amount of Taxes, (DE) amend any material Tax Return, (F) settle, compromise or otherwise resolve any material legal proceeding, audit, examination or investigation relating to Taxes, (G) fail to file when due (taking into account any extensions automatically granted) any material Tax Return or to pay when due any material Taxes, (H) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (FI) surrender change its residence for any right to claim Tax purpose or establish any permanent establishment or taxable presence in a Tax refundjurisdiction where it is not so resident;
(xiiixxi) except to the extent required by applicable Law or mandated by a Governmental Entity, enter into or negotiate any CBA, or organize or certify any labor union or other labor organization as the bargaining representative for any Company Employee;
(xxii) waive, release, settle or compromise any litigationAction, other than settlements or compromises of litigation any Action (A) that only involve payment of money damages where the amount amounts paid (net of insurance proceeds received) does not exceed $250,000 or500,000 (or its equivalent in RMB or another currency) individually, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xivB) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent business, or (C) pursuant to or in connection with past practicethe Transaction Documents;
(xviixxiii) materially change terminate or cancel, let lapse, or amend or modify in any of its business policies;
(xviii) material respect, other than renewals in the ordinary course of business, any material insurance policies maintained by it which are not promptly replaced by a comparable amount of insurance coverage;
(xxiv) enter any new line of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any outside of its assetsexisting business as of the date hereof that is material to the Company and its Subsidiaries, properties or businesses; grant or suffer any Lien on any of its assets, properties or businessestaken as a whole; or
(xixxxv) agree agree, authorize or commit to do or take any of the foregoing actions described in Section 5.1(a)(i5.1(b)(i) through Section 5.1(a)(xviii5.1(b)(xxiv).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Except (i) as expressly contemplated by this Agreement, (ii) as described in Section 5.1 Conduct of Business of the Disclosure Schedule or (iii) to the extent Acquired Corporation and the Company Pending shall otherwise consent in writing, Acquired Corporation and the Merger.
(a) Between Company covenant and agree that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective TimeDate, Acquired Corporation and the Company shall conduct their businesses and that of their Subsidiaries, each group taken as a whole, only in, and neither Acquired Corporation nor the Company shall take any action except in, and neither shall cause its Subsidiaries to take any action except in, the ordinary course of business and in a manner consistent with past practice and in compliance in all material respects with all applicable laws and regulations; and Acquired Corporation and the Company shall use all reasonable efforts to preserve substantially intact the respective business organization thereof and of its Subsidiaries, each group taken as a whole, to keep available the services of the current officers, employees and consultants thereof, and to preserve the present relationships thereof with customers, suppliers, distributors and other persons with which they or any of their Subsidiaries has significant business relations. Acquired Corporation and the Company agree that the individuals identified in Section 5.1(a) of the Disclosure Schedule shall be authorized to provide the agreement of each to the various acts of Acquired Corporation and the Company contemplated by this Section 5.1 during the period from the date of this Agreement until the earlier of the termination of this Agreement or the Effective Date. In addition, except (i) as otherwise expressly contemplated by this Agreement, (ii) as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth described in Section 5.1 of the Disclosure Schedule or (iii) to the extent Acquired Corporation and the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which consent writing, neither Acquired Corporation nor the Company shall, nor shall not be unreasonably withheldthey permit their respective Subsidiaries to, delayed or conditioned), (A) during the business period from the date of this Agreement and continuing until the earlier of the Company and its subsidiaries shall be conducted in its ordinary course termination of business and this Agreement or the Company shall use its reasonable best efforts to preserve substantially intact its business organizationEffective Date, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor do any of its subsidiaries shallthe following:
(ia) amend or otherwise change its Certificate their respective corporate charters or bylaws or those of Incorporation or By-Laws or any similar governing instrumentstheir respective Subsidiaries;
(iib) issue, deliver, sell, pledge, redeem, accelerate rights under, dispose of or encumber encumber, or authorize the issuance, sale, pledge, redemption, acceleration of rights under, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests or any voting securities interest (including but not limited to stock appreciation rightsany phantom interest) in Acquired Corporation or the Company, phantom stock any of their Subsidiaries or similar instruments)affiliates;
(c) sell, pledge, dispose of or encumber any assets of Acquired Corporation, the Company or any of its subsidiaries their Subsidiaries or suffer to exist any Lien thereupon (except for other than (Ai) sales of assets not to exceed $150,000 in the issuance aggregate or non-exclusive licenses in the ordinary course of Common Shares upon business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets; (iii) sales of immaterial assets not in excess of $75,000 in the exercise aggregate) or sales of Options or inventory in connection with other stock-based awards outstanding as the ordinary course of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)business;
(iiii) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a direct or otherwiseindirect wholly owned Subsidiary of Acquired Corporation or the Company may declare and pay a dividend to its parent, with respect to (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (except for iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any dividend Subsidiary to purchase, repurchase, redeem or distribution by a subsidiary otherwise acquire, any of its securities or any securities of its Subsidiaries, or any option, warrant or right, directly or indirectly, to acquire any such securities, or propose to do any of the Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ive) reclassify, combine, split, subdivide, redeem, purchase or otherwise (i) acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
thereof; (viiii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, loans or advances or capital contributions to or investments in any other person person, except in the ordinary course of business and consistent with past practice; (other than a subsidiary of the Company)iii) enter into, in each caseamend or waive any right under any material contract, agreement or joint venture other than in the ordinary course of business consistent with past practice, pursuant or any contract or agreement not entered into in the ordinary course of business consistent with past practices, or enter into, renew, fail to letters renew, amend or terminate any lease relating to real property, or open or close any facility comprising more than 5,000 square feet; (iv) adopt or implement any new stockholder rights plan; (v) authorize any capital expenditures or purchase of credit fixed assets which are in excess of $25,000 in the aggregate for all such expenditures and purchases for Acquired Corporation or otherwisethe Company and its respective Subsidiaries taken as a whole; (vi) modify its standard warranty terms for its products or amend or modify any product warranties in effect as of the date of this Agreement in any manner that is adverse to the Company or any Subsidiary, other than extensions of warranties in the ordinary course of business; (vii) mortgage or pledge any of its assets, tangible or intangible, or create or suffer to exist any Lien thereupon, except in the ordinary course of business consistent with past practice; or (viii) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 5.1(e);
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Af) increase the compensation payable or fringe benefits of any of to become payable to its directors, officers or employees (except other than increases payable to non-officer employees made in the ordinary course of business consistent with respect to employees who are not directors or officerspast practice), make any loan, advance or capital contribution (B) other than loans or advances of reasonable relocation expenses), or grant any severance or termination pay not (provided for under any Employee Benefit Planthat Acquired Corporation or its Subsidiaries may grant such severance or termination pay in an aggregate amount no greater than $250,000) to, (C) or enter into or amend any employmentCompany Employee Plan or Acquired Corporation Employee Plan or other plan, consulting or severance contract, agreement or arrangement with that would be a Company Employee Plan or Acquired Corporation Employee Plan, establish, adopt, enter into or amend any collective bargaining agreement or other plan, agreement, trust, fund, policy or arrangement for the benefit of its present any current or former directors, officers or employees of Acquired Corporation or the Company or any of their Subsidiaries, pay any discretionary bonuses to any officer of Acquired Corporation or the Company, materially change any actuarial assumption or other employeesassumption used to calculate funding obligations with respect to any pension or retirement plan, or change the manner in which contributions to any such plan are made or the basis on which such contributions are determined, except, in each case, as may be required by law or contractual commitments which are existing as of the date of this Agreement and listed in Section 3.13 of the Disclosure Schedule or 4.12 of the Acquired Corporation Disclosure Schedule;
(g) take any action to change accounting policies or procedures (including procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable), change any assumption underlying, or method of calculating, any bad debt contingency or other reserve, except in each case as required under GAAP;
(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, fail to file any Tax Return when due (or, alternatively, fail to file for offers of employment available extensions) or fail to cause such Tax Returns when filed to be complete and accurate; or fail to pay any material Taxes when due;
(i) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into or amend reserved against in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory Balance Sheet or regulatory accounting rules Acquired Corporation Balance Sheet or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return and consistent with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refundpast practice;
(xiiij) settle or compromise any litigation, fail to pay accounts payable and other than settlements or compromises obligations in the ordinary course of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008business;
(xivk) waive any right accelerate the collection of value material to receivables or modify the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution payment terms of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, receivables other than in the ordinary course of business consistent with past practicepractices;
(xviil) materially change sell, securitize, factor or otherwise transfer any of its business policiesaccounts receivable;
(xviiim) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Subsidiary (other than the Merger or as expressly provided in the ordinary course of business consistent with past practice, enter into this Agreement);
(n) revalue in any lease (as lessor or lessee); sell, abandon or make any other disposition of material respect any of its assets, properties including writing down the value of inventory or businesses; grant writing off notes or suffer any Lien on any of its assetsaccounts receivable, properties or businesses; orexcept as required under GAAP;
(xixo) as to Company and its Subsidiaries, enter into any agreement, contract or commitment of any type referred to in Section 3.6, or take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 5.1(a) through Section 5.1(a)(xviii).
(bn) Between above, or any action which would make any of the date representations or warranties of the Company contained in this Agreement and untrue or incorrect or prevent any of them from performing or cause any of them not to perform its covenants hereunder, in each case, such that the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties conditions set forth in ARTICLE III Sections 7.2(a) or 7.2(b), as the case may be, would not be satisfied;
(p) as to be untrue Acquired Corporation and its Subsidiaries, enter into any agreement, contract or commitment of any type referred to in any material respect; or (ii) that wouldSection 4.6, or would reasonably be expected totake, individually or agree in the aggregatewriting or otherwise to take, prevent, materially delay or materially impede the consummation any of the Merger actions described in Sections 5.1(a) through (n) above, or any action which would make any of the other transactions contemplated by representations or warranties of Acquired Corporation contained in this AgreementAgreement untrue or incorrect or prevent either of them from performing or cause either of them not to perform its covenants hereunder, in each case, such that the conditions set forth in Sections 7.3(a) or 7.3(b), as the case may be, would not be satisfied.
Appears in 1 contract
Sources: Merger Agreement (Drugmax Inc)
Conduct of Business Pending the Merger. Section 5.1 6.1 Conduct of the Business Pending the Merger. Between the date of this Agreement and the earlier of (1) the Effective Time and (2) the date upon which Purchaser’s designees constitute a majority of the members on the Company Board pursuant to Section 7.3 (the “Control Date”), (i) the Company shall, and shall cause the Company Subsidiaries to, conduct the businesses of the Company Pending and the Merger.
Company Subsidiaries only in the ordinary course of business and in a manner consistent with past practice and in compliance in all material respects with all applicable Laws; (aii) Between the Company shall use reasonable best efforts to preserve substantially intact the business organization of the Company and the Company Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Company Subsidiaries and to preserve the current relationships of the Company and the Company Subsidiaries with its customers, suppliers, distributors, licensors, licensees and other persons with which the Company or any of the Company Subsidiaries has business relations; (iii) the Company shall, and shall cause the Company Subsidiaries to, maintain the Company Owned Real Property and Company Leased Real Property in substantially the same condition as the same exist on the date of this Agreement (reasonable wear and tear excepted), (iv) upon reasonable request by Purchaser, the Company shall, or shall cause the Company Subsidiaries to, deliver any written notice necessary to exercise a renewal option with respect to those leases of Company Leased Real Property that require that such notice of renewal be delivered prior to the Effective Time, and (v) the Company shall not, and shall cause the Company Subsidiaries not to, take any action that would adversely affect or delay in any material respect the ability of either Parent or the Company to obtain any necessary approvals of any regulatory agency or other Governmental Authority required for the Transactions. In addition, and not in limitation of the foregoing, except as (x) expressly contemplated by this Agreement, (y) set forth in Section 6.1 of the Disclosure Schedule or (z) as required in compliance with all applicable Laws, neither the Company nor any of the Company Subsidiaries shall, between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreementdirectly or indirectly, as disclosed in the SEC Reports filed prior do, or propose to the date of this Agreementdo, as set forth in Section 5.1 any of the Company Disclosure Schedule, as required by law or unless following without the prior written consent of Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed withheld or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shall:delayed):
(ia) amend or otherwise change its Certificate of Incorporation or By-Laws laws or any similar governing instrumentsequivalent organizational documents;
(iib) issue, deliver, sell, pledge, dispose of of, grant or encumber encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any shares of any class of capital stock, ownership interests stock of the Company or voting securitiesany of the Company Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, or any other ownership interests or any voting securities interest (including but not limited to stock appreciation rights, any phantom stock interest and including any Company RSUs or similar instrumentsvoting securities), of the Company or any of its subsidiaries (the Company Subsidiaries, except for (Ai) the issuance in the ordinary course of business of Company Stock Options for the purchase of up to 25,000 Company Shares and Company RSUs for the issuance of up to 10,000 Company Shares for employees hired after the date hereof, (ii) the issuance of Common Company Shares upon pursuant to exercises of the exercise of Company Stock Options or in connection with other stock-based awards vesting of Company RSUs outstanding as of on the date of this Agreement, hereof as disclosed in each case, Section 4.3(b) in accordance with the terms of any those options or Company Stock Option PlanRSUs on the date of this Agreement) and (iii) subject to Section 3.7, or (B) issuances in accordance with issuance of Company Shares pursuant to the Rights Plan)Company ESPP;
(iiic) transfer, lease, sell, pledge, license, dispose of or encumber any material assets or properties of the Company or any of the Company Subsidiaries, except in the ordinary course of business and in a manner consistent with past practice;
(d) 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 any dividend other than dividends or distribution distributions made by a subsidiary of the Company Subsidiary to the Company or another wholly owned subsidiary of the CompanyCompany Subsidiary);
(ive) reclassify, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options acquire, directly or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan)indirectly, or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesits capital stock;
(vi) make any acquisition of acquire, directly or indirectly (whether including by merger, consolidation consolidation, or acquisition of stock or substantially all assets or any other business combination), any corporation, partnership, other business organization or any division thereof or any other business, or any equity interest in any person or any material amount (individually or collectively) of assets; (ii) incur any indebtedness for borrowed money or issue any debt securities, or assume, guarantee or endorse, or otherwise become responsible for (contingently or otherwise), the assets)obligations of any person, in the aggregate in excess of $500,000; (iii) make any loans, advances or capital contributions, except for employee loans or advances for travel expenses and extended payment terms for customers, in each case subject to applicable Law and only in the ordinary course of business; (iv) make, authorize, or make any investment commitment with respect to (A) any single capital expenditure or other expenditure that is, individually, in excess of $500,000 or (B) collectively, in the aggregate for the Company and the Company Subsidiaries taken as a whole in excess of $2,000,000; (v) make or direct to be made any capital investments or equity investments in any interest inentity, other than investments in any corporationwholly-owned Company Subsidiary; or (vi) enter into or amend any Contract, partnership commitment or other business organization or division thereofarrangement with respect to any matter set forth in this Section 6.1(f);
(vig) sell (i) increase the compensation payable or otherwise dispose to become payable (including bonus grants) or increase or accelerate the vesting of (whether any benefits provided, or pay or award any payment or benefit not required as of the date hereof by mergera Plan as existing on the date hereof and disclosed in Section 4.10(a) of the Company Disclosure Schedule, consolidation to its directors, officers or disposition of stock or assets or otherwise) any corporation, partnership employees or other business organization service providers, (ii) grant any severance or division thereof termination pay or otherwise sell benefits to, or dispose enter into any employment, severance, retention, change in control, consulting or termination Contract with, any director, officer or other employee or other service providers of the Company or of any assetsCompany Subsidiary, subject to sub-Section 6.1(g)(v) below, other than sales offer letters, employment agreements, or dispositions consulting agreements entered into in the ordinary course of business that are terminable at will and without liability to the Company or pursuant any Company Subsidiary, (iii) 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, Contract, trust, fund, policy or arrangement for the benefit of any director, officer or employee or other service providers, (iv) pay or make, or agree to existing Contractspay or make, any accrual or other arrangement for, or take, or agree to take, any action to fund or secure payment of, any severance pension, indemnification, retirement allowance, or other benefit, or (v) hire, elect or appoint any officer, director or employee holding a position of vice president or above;
(viih) except as publicly announced prior to the date hereof, announce, implement or effect any reduction in labor force greater than five percent (5%) of the total Company headcount, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company or any Company Subsidiary, other than routine employee terminations;
(i) enter into a new line of business that (A) is material to the Company and the Company Subsidiaries taken as a whole, or (B) represents a category of revenue that is not discussed in Item 1 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2009;
(j) take any action, other than reasonable actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including procedures with respect to the payment of accounts payable and collection of accounts receivable, and the revaluation of any assets);
(k) make or change any election, change an annual accounting period, adopt or change any 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 the Company or any of the Company Subsidiaries, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of the Company Subsidiaries, destroy or dispose of any books and records with respect to Tax matters relating to periods beginning before the Effective Time and for which the statute of limitations is still open or under which a record retention agreement is in place with a Governmental Authority if such election, adoption, change, amendment, agreement, settlement, surrender, consent, waiver, destruction or disposal would have the effect of materially increasing the Tax liability of the Company or any of the Company Subsidiaries for any period ending after the Effective Time or materially decreasing any Tax attribute of the Company or any of the Company Subsidiaries existing on the Effective Time;
(l) settle, pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including any litigation, arbitration or other Action, 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 2009 Balance Sheet or subsequently incurred in the ordinary course of business and consistent with past practice, (ii) those that involve only the payment or receipt of money (and not the assumption of any liability or obligation, including, the grant to any Third Party of any license, covenant not to ▇▇▇, immunity or other right with respect to or under any of the Owned Company Intellectual Property) in an amount less than $500,000; provided, that in connection with such payment the Company shall have received a complete and unconditional release against the Company and the Company Subsidiaries, or (iii) settlements in connection with routine customer audits that involve (x) the receipt of $500,000 or less by the Company and (y) the granting of continued use rights with respect to Company Products or products or services of the Company or any Company Subsidiary;
(m) enter into any Contract or amendment that would be a Company Material Contract, amend or modify in any material respect or consent to the termination of any Company Material Contract, or amend or modify in any material respect, waive or consent to the termination of the Company’s or any Company Subsidiary’s rights thereunder or waive, release, or consent to the termination of any claims or rights of material value to the Company or any Company Subsidiary; provided, however, that for all purposes of this Section 6.1(m), the definition of “Material Contract:”
(i) shall not include the category of Contracts referenced in Section 4.17(a)(xvi);
(ii) shall not include Contracts entered into with customers of the Company on terms consistent with the Company’s past contracting practices with similarly situated customers; and
(iii) all references to $500,000 in Section 4.17(a)(i) and Section 4.17(a)(vii) with respect to any customer contracts shall be deemed to refer to $2,000,000;
(n) enter into (i) any material Contract with new or existing suppliers or customers with a term of greater than thirty-six (36) months, (ii) any Contract with existing suppliers or customers other than on terms consistent with the Company’s or the applicable Company Subsidiary’s existing Contracts with such suppliers or customers, as applicable, as disclosed to Parent prior to the date hereof, or (iii) any Contract with new suppliers or customers other than on terms that are consistent with the Company’s past contracting practices with similarly situated suppliers or customers, as applicable;
(o) enter into any Contracts (i) under which Company or any Company Subsidiary grants or agrees to grant to any Third Party any assignment, license, covenant, release, immunity or other right with respect to any Intellectual Property or Intellectual Property Rights (other than non-exclusive licenses of Software granted to customers in the ordinary course of business consistent with Company’s past practice), (ii) under which Company or any Company Subsidiary establishes with any Third Party a joint venture, strategic relationship, or partnership pursuant to which Company agrees to develop or create any Intellectual Property, products or services; (iii) under which Company or any Company Subsidiary agrees to create or develop any Intellectual Property, products, or services with any Third Party that designs, develops, or manufactures or has manufactured microprocessors, microprocessor cores, netbooks, or personal computers; (iv) that will cause or require (or purport to cause or require) the Surviving Corporation or Parent or any of its Affiliates to (A) grant to any Third Party any license, covenant not to ▇▇▇, immunity or other right with respect to or under any of the Intellectual Property or Intellectual Property Rights of Parent or any of its Affiliates; or (B) be obligated to pay any royalties or other amounts, or offer any discounts, to any Third Party (other than, with respect to the Surviving Corporation only, in connection with non-exclusive licenses of Software entered into in the ordinary course of business consistent with past practice, );
(p) enter into or amend any Contract pursuant to which any other party is granted, or that otherwise constrains or subjects the Company or any Company Subsidiary or Parent or any of its Subsidiaries to, any non-competition, “most-favored nation”, exclusive marketing or other exclusive rights of any type or scope or that otherwise restricts the Company or any Company Subsidiary or, upon completion of the Offer or any other Transaction, Parent or any of its subsidiaries, from engaging or competing in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess line of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur business or modify in any location; or enter into or amend any Contract with respect to joint ventures, partnerships or material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each casestrategic alliances; or, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adoptpractices, enter into or amend in any material Contract with respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedulefuture services requirements;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (Bq) enter into any settlement lease, sublease or compromise of any Tax liability, (C) file any amended Tax Return license for real property or material operating lease other than the entry into leases with respect to real property spaces of less than 8,000 square feet and a term of less than two (2) years;
(r) terminate, cancel, amend or modify any Tax, insurance coverage policy maintained by Company or any of the Company Subsidiaries that is not promptly replaced by a comparable amount of insurance coverage;
(D) change any annual Tax accounting period, (Es) enter into or amend or otherwise modify any closing agreement relating to any material Tax Contract or (F) surrender any right to claim a Tax refund;
(xiii) settle arrangement with persons that are affiliates or compromise any litigation, other than settlements are executive officers or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary directors of the Company;
(xvt) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or commence any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parentmaterial Action;
(xviu) except as may be required by generally accepted accounting principlesenter into, revalue participate in, establish or join any portion of its assetsnew standards-setting organization, properties university or businesses includingindustry bodies or consortia, without limitation, any writeor other multi-down of the value of any assets party special interest groups or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practiceactivities;
(xviiv) materially change incur any non-employee expense (travel, facilities, other) that was not previously budgeted in the FY 2010 Annual Operating Plan set forth in Section 6.1(v) of its business policies;the Disclosure Schedule; or
(xviiiw) other than in the ordinary course of business consistent with past practiceannounce an intention, enter into any lease (as lessor formal or lessee); sell, abandon informal Contract or otherwise make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree a commitment to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 6.1. Conduct of Business of by the Company Pending the Merger.
(a) Between . From the date of this Agreement and hereof until the Effective Time, unless Sponsor shall otherwise consent in writing, or except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure ScheduleLetter or as otherwise expressly permitted by or provided for in this Agreement, as required the Conversion Term Sheet, the Post-Merger Integration Plan, or, if approved by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheldthe Department and approved and adopted by the requisite vote of the Members, delayed or conditioned)the Plan of Conversion, (A) the business of the Company and its subsidiaries the Company Subsidiaries shall be conducted conduct their respective businesses in its the ordinary course of business consistent with past practice and the Company shall use its all reasonable best efforts to preserve substantially intact its their business organizationorganizations and goodwill and relationships with third parties (including their respective relationships with policyholders, insureds, agents, underwriters, brokers and material business relationshipsinvestment customers) and to keep available the services of their current key employees and maintain their current rights and franchises, subject to the terms of this Agreement. Except as set forth in the Company Disclosure Letter or as otherwise expressly permitted by or provided for in this Agreement, from the date hereof until the Effective Time, without the prior written consent of Sponsor:
(Ba) the Company shall perform its obligations under this Agreementnot adopt or propose, and (C) without limiting the foregoing, neither the shall not permit any Company nor any of its subsidiaries shall:
(i) amend Subsidiary to adopt or otherwise change its Certificate of Incorporation or By-Laws or any similar governing instruments;
(ii) issue, deliver, sell, pledge, dispose of or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stockpropose, any change in its Constituent Documents (other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of than the Company or any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or Articles Amendments adopted in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights PlanConversion);
(iiib) the Company shall not and shall not permit any Company Subsidiary that is not wholly-owned to declare, set aside, make aside or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect distribution except to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions policyholders in the ordinary course of business consistent with past practice;
(c) subject to Section 7.2, the Company shall not, and shall not permit any Company Subsidiary to, (i) merge or consolidate with any other Person other than another subsidiary of the Company, (ii) acquire a material amount of the assets or equity of any other Person, or (iii) other than in the ordinary course of business, make or commit to make any capital expenditure;
(d) the Company shall not, and shall not permit any Company Subsidiary to, sell, lease, license, subject to an Encumbrance other than a Permitted Encumbrance, or otherwise surrender, relinquish or dispose of (i) any facility owned or leased by the Company or any Company Subsidiary or (ii) any assets or property except, (x) with respect to clause (ii), pursuant to existing written contracts or commitments (the terms of which have been disclosed to Sponsor prior to the date hereof), or (y) with respect to clauses (i) and (ii), in the ordinary course of business consistent with past practice;
(e) the Company shall not, and shall not permit any Company Insurance Subsidiary to, conduct transactions in Company Investments except in compliance with the Consolidated Investment Policy of the Company and the Company Insurance Subsidiaries, in effect on the date hereof, a copy of which has previously been delivered to Sponsor;
(f) the Company shall not and shall not permit any Company Subsidiary (i) to issue, sell, grant, pledge or otherwise encumber any shares of its capital stock or other securities, or split, combine or reclassify any of its capital stock or issue securities in respect of its capital stock or enter into any amendment of any material term of any of its outstanding securities, (ii) incur or assume any indebtedness or any other liabilities except in the ordinary course of business consistent with past practice or pursuant to existing Contractscredit facilities, or (iii) amend or otherwise increase, accelerate the payment or vesting of the amounts payable or to become payable under or fail to make any required contribution to, any Plan 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;
(viig) the Company shall not, and shall not permit any Company Subsidiary to, grant any increase in the compensation or benefits of directors, officers, employees, consultants or agents of the Company or any Company Subsidiary other than increases in the ordinary course of business consistent with past practice;
(h) other than in the ordinary course of business consistent with past practicepractices with respect to field management and support personnel, the Company shall not, and shall not permit any Company Subsidiary to, enter into or amend any employment agreement or other employment arrangements with any employee of the Company or any Company Subsidiary;
(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 U.S. GAAP or the applicable State Statutory Accounting Practices as agreed by PricewaterhouseCoopers LLP, the Company's independent auditors;
(j) 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;
(k) the Company shall not permit any Company Subsidiary to purchase or redeem any shares of its capital stock, or any other equity interests or any rights, warrants or options to acquire any such shares or interests, except for any such purchases or redemptions by a wholly-owned subsidiary of the Company;
(l) the Company shall not, and shall not permit any Company Subsidiary to pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), in each case, other than (i) settlement of policy claims or other payments, discharges, settlements or satisfactions in the ordinary course of business consistent with past practice, (ii) settlements of litigation that individually do not exceed $1,000,000 or, in the aggregate, $5,000,000, or (iii) payment of indebtedness, debt securities, guarantees, loans, advances and capital contributions made in the ordinary course of business consistent with past practices but not individually in excess of $1,000,000 or in the aggregate in excess of $5,000,000;
(m) the Company shall not, and shall not permit any Company Subsidiary to, other than in the ordinary course of business consistent with past practices, (i) make or rescind any material express or deemed election relating to Taxes, (ii) settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, which, individually or in the aggregate, exceeds $500,000, (iii) make a request for a written ruling of a taxing authority relating to Taxes, other than any request for a determination concerning qualified status of any Plan intended to be qualified under Code Section 401(a), (iv) enter into a written and legally binding agreement with a taxing authority relating to Taxes, or (v) change in any material respect any Contractof its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of its federal income tax returns for the taxable year ending December 31, 2000;
(viiin) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilitiesshall not, incur or modify in and shall not permit any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each caseSubsidiary to, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into modify or amend in any material respect or terminate any Employee Benefit Plan Company Contract or (E) pay enter into any new agreement which would have been considered a Company Contract if it were entered into at or become obligated prior to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Scheduledate hereof;
(xio) make The Company shall not, and shall not permit any change in Company Subsidiary to, terminate, amend, modify or waive any accounting principlesprovision of any standstill agreement or any standstill provisions of other agreements to which it is a party, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect theretoand the Company shall, and shall cause each Company Subsidiary to, enforce the provisions of any such agreements;
(xiip) other than in the ordinary course of business Company shall not permit any Company Insurance Subsidiary to forfeit, abandon, modify, waive, terminate or as required by applicable law, (A) make any Tax election or otherwise change any method of accountingits insurance licenses, except (Bi) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principlesin order to comply with Applicable Law or (ii) such modifications or waivers of insurance licenses as would not, revalue any portion of its assets, properties individually or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course aggregate, restrict the business or operations of business consistent with past practicesuch Company Insurance Subsidiary in any material respect;
(xviiq) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall not permit or cause each of is subsidiaries not any Company Subsidiary to, directly take any actions or indirectlyomit to take any actions that would cause any of its representations and warranties herein to become untrue in any material respect or that would cause or reasonably be expected to cause a Company Material Adverse Effect;
(r) the Company shall not terminate, cancel or amend any insurance coverage maintained by it or any Company Subsidiary with respect to any material assets which is not replaced by a comparable amount of insurance coverage;
(s) the Company shall not, and shall not permit any Company Subsidiary to, take any action (i) to cause its representations and warranties set forth that is not expressly permitted by or provided for in ARTICLE III to be untrue in any material respect; or (ii) this Agreement that would, or would reasonably be expected to result in a reduction of the insurer financial strength ratings of the Company and the Company Insurance Subsidiaries;
(t) the Company will not amend the Company Privacy Policy, except as may be required by Applicable Law or except as would not have or be reasonably likely to result in a Company Material Adverse Effect;
(u) the Company shall not, and shall not permit any of the Company Insurance Subsidiaries to, individually make any material change in its underwriting, claims management, pricing or in reserving practices; and
(v) the aggregateCompany shall not, preventand shall not permit any Company Subsidiary to, materially delay agree or materially impede the consummation commit to do any of the Merger or the other transactions contemplated by this Agreementforegoing.
Appears in 1 contract
Sources: Merger Agreement (Nationwide Financial Services Inc/)
Conduct of Business Pending the Merger. Section 5.1 SECTION 6.01 Conduct of Business of by the Company Pending the Merger.
(a) Between . Except as expressly contemplated by this Agreement or in Section 6.01 of the Company Disclosure Schedule, the Company covenants and agrees that, between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent agree in writing (which consent shall not be unreasonably withheldwriting, delayed or conditioned), (A) the business businesses of the Company and its subsidiaries the Company's Subsidiaries shall be conducted in its only in, and the Company and the Company's 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 its the business organization, and material business relationships, (B) organization of the Company shall perform its obligations under and the Company's Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Company's Subsidiaries and to preserve the current relationships of the Company and the Company's Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary of the Company has significant business relations. By way of amplification and not limitation, except as expressly contemplated by this Agreement, and (C) without limiting the foregoing, neither the Company nor any Subsidiary of its subsidiaries the Company shall, 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, which consent shall not be unreasonably withheld, conditioned or delayed:
(i) amend or otherwise change its Certificate of Incorporation or By-Laws or any similar governing instruments;
(iia) issue, deliversell or contract for the issuance or sale, sell, pledge, dispose of or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of the capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any securities convertible into or exchangeable for shares of its subsidiaries capital stock of the Company or any securities, warrants, options or rights to purchase any of the foregoing (except for (A) the issuance of Common Shares upon pursuant to the exercise of Options or in connection with other stock-based awards options currently outstanding as under the Company Stock Plans and pursuant to the exercise of options to purchase shares of Company Common Stock under the date of this Agreement, in each case, in accordance with ESPP);
(b) amend the terms of any Company Stock Option Planoutstanding security, option or (B) issuances in accordance with the Rights Plan)warrant;
(iiic) purchase or redeem any shares of capital stock of the Company;
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stockstock or other securities, property or otherwise, with respect to any of its the Company's capital stock stock;
(except for e) amend any dividend of the charter documents, bylaws or distribution by a subsidiary other organizational documents of the Company to the Company or another wholly owned subsidiary of the Company)its Subsidiaries;
(ivf) reclassify, combine, split, subdivide, redeem, purchase incur or otherwise acquire guarantee any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options indebtedness or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide incur any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in liabilities outside the ordinary course of business or pursuant to existing Contractsbusiness;
(viig) other than in the ordinary course of business consistent except as required to comply with past practiceapplicable Laws, adopt or amend any employee benefit plan, enter into any employment contract, settle any employment dispute, pay or amend agree to pay any severance, special bonus or special remuneration (except that any such bonus or remuneration payable in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget 2003 set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to Schedule that ordinarily would have been payable by the Company the terms in 2004 may be paid in 2003), including change of control payments, to any indebtedness for borrowed moneydirector or employee, or assumeincrease the salaries, guarantee wage rates or endorse, or otherwise as an accommodation become responsible for, the obligations compensation of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each caseits directors or, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwiseits employees;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (Ch) enter into any employmentagreement with respect to the Intellectual Property Rights or with respect to the Intellectual Property of any third party, consulting enter into any collaboration, co-marketing or severance co-promotion agreement regarding any of the Company's compounds or otherwise extend, modify or amend any rights with respect to the foregoing;
(i) make or change an election in respect of material Taxes, amend a Tax Return, adopt or change an accounting method in respect of Taxes, enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or arrangement closing agreement, settle or compromise any claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes with any Governmental Authority;
(j) change any of the accounting methods used by the Company or any of its present or former directorsSubsidiaries, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Scheduleunless required by GAAP;
(xik) make any change in any accounting principles, except fail to maintain insurance coverage at levels consistent with presently existing levels so long as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect theretosuch insurance is available at commercially reasonable rates;
(xiil) other than in the ordinary course of business incur, create or as required by applicable law, (A) make assume any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return lien with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refundasset;
(xiiim) settle acquire or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution dispose of any inactive subsidiary material assets outside of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xviin) materially change enter into any new Material Contract or amend any material term of, waive any material right under, assign (in whole or in part) or terminate any existing Material Contract;
(o) knowingly take any action that would cause any of its business policiesrepresentations and warranties set forth in Article IV to be no longer true and correct;
(xviiip) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businessesreorganization under applicable law; or
(xixq) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between SECTION 6.02 Conduct of Business by Parent Pending the Merger. Parent covenants and agrees that between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company Parent shall not, and shall cause each of is subsidiaries not to, directly or indirectly, do, or propose to do, any of the following without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed:
(a) take any action (i) to cause its Parent's representations and warranties set forth in ARTICLE III Article V to be untrue in any material respect; or or
(iib) take any action that would, or would could reasonably be expected to, individually or in the aggregate, prevent, likely to materially delay or materially impede the consummation of the Merger Offer or the Merger, provided, however, that in no event shall Parent or any of its Subsidiaries be required to sell or otherwise dispose of, or permit the sale or other transactions contemplated by this Agreementdisposition of, any assets of Parent, the Company or their respective Subsidiaries, whether as a condition to obtaining any approval from a Governmental Authority or any other person or for any other reason.
Appears in 1 contract
Sources: Merger Agreement (Pfizer Inc)
Conduct of Business Pending the Merger. Section 5.1 6.1 Conduct of Business of by the Company Pending the Merger.
(a) Between . The ----------------------------------------------------- Company agrees that, between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which such consent shall not to be unreasonably withheld, delayed or conditioned)withheld) and except for actions taken or omitted for the purpose of complying with this Agreement, (A) the business businesses of the Company and its subsidiaries the Subsidiaries shall be conducted only in its the ordinary course of business and in a manner consistent with the Company's current business plan, and the Company shall use its reasonable best efforts to preserve substantially intact its the business organizationorganization of the Company to keep available the services of the current officers, employees and material consultants of the Company and to preserve the current relationships of the Company with customers, suppliers and other Persons with which the Company has business relationshipsrelations. By way of amplification and not limitation, (B) except as expressly contemplated by this Agreement and Section 6.1 of the Disclosure Schedule, the Company shall perform its obligations under not, between the date of this AgreementAgreement and the Effective Time, and (C) without limiting the foregoingdirectly or indirectly, neither the Company nor do any of its subsidiaries shallthe following without the prior written consent of Parent:
(ia) amend or otherwise change its Certificate of Incorporation or By-Laws laws or any similar governing instrumentsequivalent organizational documents;
(iii) issue, deliver, sell, pledge, license, dispose of of, grant, encumber, or encumber authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (A) any shares of any class of capital stock, ownership interests stock of the Company or voting securitiesany Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instrumentsinterest), of the Company or any Subsidiary, or (B) except in the ordinary course of its subsidiaries (business, except for (A) the issuance of Common Shares upon pursuant to the exercise of Company Stock Options or in connection with other stock-based awards pursuant to the ESPP or pursuant to the Warrants or the Convertible Notes, any property or assets of the Company or any Subsidiary, (ii) modify any Company Stock Options outstanding as of on the date of this Agreement, in each caseor (iii) accelerate the of vesting or other benefit of any option, share or award whether or not pursuant to the Company Stock Option Plans, other than in accordance with the express terms of any Company Stock Option Plansuch option, share or (B) issuances award as in accordance with effect immediately prior to the Rights Plan)date of this Agreement;
(iiic) 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 (stock, except for dividends by any dividend direct or distribution by a subsidiary of the Company indirect wholly owned Subsidiary to the Company or another wholly owned subsidiary of the Company)any other Subsidiary;
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire acquire, directly or indirectly, any of its capital stock (or securities convertible into or exercisable for any shares of its capital stock) except for acquisitions of restricted stock held by employees of the Company (except for the acquisition and its Subsidiaries upon termination of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesemployment;
(vi) make any acquisition of acquire (whether including, without limitation, by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), assets or make any investment in other business combination) any interest in, in any corporation, partnership or partnership, other business organization or division thereof;
(vi) sell Person or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose any significant amount of any assets, other than sales or dispositions except in the ordinary course of business or pursuant to existing Contracts;
(vii) other than and in the ordinary course of business a manner consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
's current business plan; (ixii) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any personPerson, or make any loans, advances or investments, capital contributions to or advances; (iii) enter into any other person (other than a subsidiary of the Company), in each case, material contract or agreement other than in the ordinary course of business and in a manner consistent with past practice, pursuant to letters the Company's current business plan; (iv) authorize any capital expenditure in excess of credit or otherwise;
(x) $500,000 in the aggregate except to the extent required under consistent with the Company's existing business plan; or (v) enter into or amend any Employee Benefit Plan material contract, agreement, commitment or as required arrangement with respect to any matter prohibited by applicable law, this Section 6.1(e);
(Af) increase the compensation payable or fringe to become payable or the benefits of any of provided to its directors, officers officers, employees, agents or employees (other representatives, except for increases in the ordinary course of business with respect in salaries or wages of employees of the Company or any Subsidiary or, except as otherwise provided pursuant to employees who are not directors or officers)the terms of agreements in effect on January 1, (B) 2001, grant any severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any new severance agreement with, any director, officer, employee, agent or other representative of the Company or of any Subsidiary, or enter into any employment agreement with any director, officer, employee, agent or other representative (other than with a newly hired employee) of the Company or any Subsidiary, 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, consulting termination, severance or severance agreement other plan, agreement, trust, fund, policy or arrangement with for the benefit of any of its present director, officer or former directorsemployee;
(g) except as required by applicable Law or by U.S. GAAP, officers or take any action, other employees, except for offers of employment than reasonable and usual actions in the ordinary course of business and consistent with past practice practice, with employees who are not directors respect to accounting policies, practices or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Scheduleprocedures;
(xih) incur any material obligation to make any change payment of, or in respect of, any accounting principlesTax, take or cause to be taken any action would prevent the Company from filing a consolidated federal Tax Return for the year ending September 30, 2001, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable lawbusiness, (A) make any Tax election or change any method of accountingTax election, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) adopt or change any method of Tax accounting, file any amended Tax Returns or claims for Tax refunds, enter into any closing agreement relating to agreement, surrender, settle or compromise any material Tax claim, liability, audit or (F) assessment, surrender any right to claim a any material Tax refund;
(xiii) settle , offset or compromise other reduction in Tax liability, consent to any litigation, extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other than settlements or compromises of litigation where the amount paid does not exceed $250,000 oraction, if greater, any such action or omission would have the total incurred cash reserve amount for such matter, as effect of increasing in any material respect the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive Tax liability or reducing any right of value material to the Company or any subsidiary Tax asset of the Company;
(xvi) adopt a plan amend, modify or consent to the termination of liquidation any Material Contract, or resolutions providing for amend, waive, modify or consent to the liquidation, dissolution, merger, consolidation or other reorganization termination of the Company Company's material rights thereunder, except for amendments, modifications or consents which are not materially adverse to the Company's rights and expected benefits under any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parentsuch Material Contract;
(xvij) except as may be required by generally accepted accounting principles, revalue settle any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;material Action; or
(xviik) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practicepublicly announce an intention, enter into any lease formal or informal agreement (as lessor oral or lessee); sellwritten) or otherwise make a commitment, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) Between . 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 or the Effective Time, unless Parent shall otherwise agree in writing, the Company shall conduct its business 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 other than actions taken by the Company in contemplation of the Merger; and the Company shall use all reasonable commercial efforts to preserve substantially intact the business organization of the Company, to keep available the services of the present officers, employees and consultants of the Company and to preserve the present relationships of the Company with customers, suppliers and other persons with which the Company has business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to Company shall not, during the period from the date of this Agreement, as set forth in Section 5.1 Agreement and continuing until the earlier of the Company Disclosure Scheduletermination of this Agreement or the Effective Time, as required by law directly or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheldindirectly do, delayed or conditioned)propose to do, (A) the business any of the Company and its subsidiaries shall be conducted in its ordinary course following without the prior written consent of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shallParent:
(ia) amend or otherwise change its Certificate the Articles of Incorporation or By-Laws or any similar governing instrumentsof the Company;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of interest) in the Company or any of its subsidiaries (except for (A) the issuance of shares of Company Common Shares upon Stock issuable pursuant to Stock Options which were granted under either the exercise of Options Company Stock Option Plan and are outstanding on the date hereof or in connection with the Conversion or other stock-based awards outstanding as conversion of the date Preferred Stock into shares of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights PlanCommon Stock);
(iiic) sell, pledge, dispose of or encumber any assets (tangible or intangible) of the Company except for (i) dispositions of obsolete or worthless assets and (ii) sales of immaterial assets not in excess of $25,000 in the aggregate;
(i) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property (ii) split, combine or otherwisereclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, with respect to any in lieu of or in substitution for shares of its capital stock (except for any dividend or distribution by a subsidiary the issuance of shares of Company Common Stock issuable pursuant to Stock Options which were granted under either the Company to Stock Option Plan and are outstanding on the Company date hereof or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise Conversion or other conversion of Options or the lapse Preferred Stock into shares of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option PlanCommon Stock), or reclassify(iii) amend the terms or change the period of exercisability of, combinepurchase, split repurchase, redeem or subdivide otherwise acquire, any capital stock of its securities, including without limitation, shares of Company Common Stock, Preferred Stock or other ownership interests any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock, or propose to do any of the Company’s subsidiariesforegoing;
(vi) make any acquisition of acquire (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or other business organization or division thereof;
; (viii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personperson or, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than except in the ordinary course of business consistent with past practice, pursuant make any loans or advances; (iii) enter into or amend any material contract or agreement; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $50,000 for the Company; or (v) enter into or amend any contract, agreement, commitment or arrangement to letters effect any of credit or otherwisethe matters prohibited by this Section 4.1(e);
(xf) except to the extent required under any Employee Benefit Plan or other than as required contemplated by applicable lawSchedule 4.1(f), (A) increase the compensation payable or fringe benefits of any of to become payable to its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors employees, or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting employment or severance agreement with any director, officer 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, termination, severance or other plan, agreement, trust, fund, policy or arrangement with for the benefit of any of its present current or former directors, officers or other employees, except, in each case, as may be required by law;
(g) except for offers as set forth in Sections 2.8(c), (d) and (e) of employment the Company Disclosure Schedule, 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) except as required by the express terms thereof, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into reserved against in the Financial Statements or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixj) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.1 (a) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that wouldabove, or any action which would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation make any of the Merger representations or warranties of the other transactions contemplated by Company contained in this AgreementAgreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Sources: Merger Agreement (Registry Inc)
Conduct of Business Pending the Merger. SECTION 10.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. Except as disclosed in Section 5.1 Conduct of Business 4.1 of the Company Pending Disclosure Schedule, during the Merger.
(a) Between period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company covenants and agrees that, unless Parent shall otherwise agree in writing, the Company shall conduct its business only in, and 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 reasonable commercial efforts to preserve substantially intact the business organization of the Company, to keep available the services of the present officers, employees, agents and consultants of the Company and to preserve the present 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, as disclosed in the SEC Reports filed prior to Company shall not, during the period from the date of this Agreement, as set forth in Section 5.1 Agreement and continuing until the earlier of the Company Disclosure Scheduletermination of this Agreement or the Effective Time, as required by law directly or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheldindirectly do, delayed or conditioned)propose to do, (A) the business any of the Company and its subsidiaries shall be conducted in its ordinary course following without the prior written consent of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shallParent:
(ia) amend or otherwise change its the Company's Certificate of Incorporation or By-Laws or any similar governing instrumentsBylaws;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of interest) in the Company or any of its subsidiaries Affiliates, except for the issuance of shares of Company Common Stock issuable upon the exercise of the Stock Options and Warrants and other commitments listed in Section 2.4 of the Company Disclosure Schedule;
(c) sell, transfer, lease to others or otherwise dispose of or subject to any Encumbrance any material assets or properties of the Company or purchase, lease from others or otherwise acquire any material assets or properties (except for (Ai) purchases or sales of assets in the issuance ordinary course of Common Shares upon the exercise business and in a manner consistent with past practice, (ii) dispositions of Options obsolete or worthless assets, and (iii) purchases or sales of immaterial assets not in connection with other stock-based awards outstanding as excess of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan$20,000);
(iiii) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property (ii) split, combine or otherwise, with respect to reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (except for iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any dividend Person to purchase, repurchase, redeem or distribution by a subsidiary otherwise acquire, any of the its securities, including shares of Company Common Stock or any option, warrant or right, directly or indirectly, to the acquire shares of Company or another wholly owned subsidiary of the Company)Common Stock;
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or other business organization or division thereof;
; (viii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, except for borrowings and reborrowing under the Company's existing credit facilities or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personPerson, or make any loansloans or advances, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than except in the ordinary course of business consistent with past practice; (iii) authorize any capital expenditures or purchases of fixed assets which are, pursuant in the aggregate, in excess of the amount set forth in Section 4.1 of the Company Disclosure Schedule for the Company taken as a whole; or (iv) enter into or amend any contract, agreement, commitment or arrangement to letters effect any of credit or otherwisethe matters prohibited by this Section 4.1(e);
(xf) except make any change in the rate of compensation, commission, bonus or other remuneration payable, or pay or agree or promise to pay, conditionally or otherwise, any bonus, extra compensation, pension or severance or vacation pay, to any director, officer, employee, salesman or agent of the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (Company except in the ordinary course of business consistent with respect prior practice and pursuant to employees who are not directors or officers)in accordance with plans disclosed in Section 2.14(a) of the Company Disclosure Schedule that were in effect as of the date of this Agreement or make any increase in or commitment to increase any employee benefits, (B) grant adopt or make any severance commitment to adopt any additional employee benefit plan or termination pay not provided for under make any contribution, other than regularly scheduled contributions, to any Employee Benefit Plan;
(g) take any action to change accounting practices, policies or procedures (Cincluding procedures with respect to revenue recognition, payments of accounts payable or collection of accounts receivable);
(h) enter into make any employmentmaterial tax election inconsistent with past practice or settle or compromise any material federal, consulting state, local or severance agreement foreign Tax liability or arrangement with agree to an extension of a statute of limitations;
(i) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction when due, in the ordinary course of its present business or former directors, officers or other employees, except for offers incurred after the date of employment this Agreement in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedulepractice;
(xij) make enter into any change in any accounting principlestransaction, except as may be appropriate to conform to changes in statutory contract or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) commitment other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businessesbusiness; or
(xixk) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.1(a) through Section 5.1(a)(xviii).
(bj) Between above, or any action which would make any of the date representations or warranties of the Company contained in this Agreement and the Effective Time, untrue or incorrect or prevent the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, from performing or cause the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause perform its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreementcovenants herein.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) Between . The Company and Shareholders, jointly and severally, covenant and agree that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent agree in writing (which consent 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 be unreasonably withheldtake any action except in, delayed the ordinary course of business and in a manner consistent with past practice other than actions taken by the Company or conditioned), (A) its subsidiaries in contemplation of the Merger; and the Company and Shareholders shall use all reasonable commercial efforts to preserve 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 shall be conducted in its ordinary course and to preserve the present relationships of business and the Company shall use and its reasonable best efforts to preserve substantially intact its business organizationsubsidiaries with customers, suppliers and material business relationships, (B) other persons with which the Company shall perform or any of its obligations under subsidiaries has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, and (C) without limiting the foregoing, 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 the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its Certificate the Articles of Incorporation or By-Laws of the Company or any similar governing instrumentsof its subsidiaries;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests 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 voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), assets of the Company or any of its subsidiaries (except for (Ai) sales of assets in the issuance ordinary course of Common Shares upon 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 $100,000 in the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Planaggregate);
(iiii) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a wholly owned subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or otherwise, with respect to reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (except for iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any dividend subsidiary to purchase, repurchase, redeem or distribution by a subsidiary 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 Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or other business organization or division thereof;
; (viii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) incur any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assetsindebtedness for borrowed money, other than sales or dispositions draws in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities's bank line of credit, incur or modify in issue any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personperson or, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than except in the ordinary course of business consistent with past practice, pursuant make any loans or advances; (iii) enter into or amend any material contract or agreement calling for aggregate payments in excess of $50,000; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $100,000 for the Company and its subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement to letters effect any of credit or otherwisethe matters prohibited by this Section 4.1(e);
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Af) increase the compensation payable or fringe benefits of any of to become payable to its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors employees, or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting employment or severance agreement with any director, officer or arrangement with other employee of the Company or any of its present subsidiaries, or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other amounts to any officer plan, agreement, trust, fund, policy or employee other than as set forth in Section 3.24 of arrangement for the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise benefit of any Tax liabilitycurrent or former directors, (C) file any amended Tax Return with respect to any Taxofficers or employees, (D) change any annual Tax accounting periodexcept, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigationin each case, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principleslaw, revalue provided the Company and its subsidiaries may increase wages (by not more than ten percent (10%) for any portion of its assets, properties individual or businesses including, without limitation, any write-down of in the value of any assets or any write-off of notes or accounts receivable, other than aggregate) in the ordinary course of business consistent with past practice;
(xviig) materially take any action to change any accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of its business policiesaccounts payable and collection of accounts receivable);
(xviiih) 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), 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 1996 Balance Sheet or incurred in the ordinary course of business since the date of the 1996 Balance Sheet and consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixj) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.1 (a) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that wouldabove, or any action which would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation make any of the Merger representations or warranties of the other transactions contemplated by Company contained in this AgreementAgreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Sources: Merger Agreement (Just for Feet Inc)
Conduct of Business Pending the Merger. Section 5.1 SECTION 5.01 Conduct of Business of by the Company Pending the Merger.
(a) Between . The Company agrees that, between the date of this Agreement and the Effective Time, except as otherwise contemplated required by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreementapplicable Law, as set forth in Section 5.1 5.01 of the Company Disclosure ScheduleLetter or as expressly contemplated by any other provision of this Agreement, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (Ai) the business businesses of the Company and its subsidiaries the Company Subsidiaries shall be conducted only in, and the Company and the Company Subsidiaries shall not take any action except in, a lawfully permitted manner in its the ordinary course of business and in a manner consistent with past practice; and (ii) the Company shall use its commercially reasonable best efforts to preserve substantially intact its the business organization, and material business relationships, (B) organization of the Company shall perform its obligations under and the Company Subsidiaries, to keep available the services of the current officers, employees, consultants, contractors, subcontractors and agents of the Company and the Company Subsidiaries and to preserve the current relationships of the Company and the Company Subsidiaries with Governmental Authorities, customers, suppliers and other persons with which the Company or any Company Subsidiary has material relations. By way of amplification and not limitation, except as required by applicable Law, as set forth in Section 5.01 of the Company Disclosure Letter or as expressly contemplated by any other provision of this Agreement, and (C) without limiting the foregoing, neither the Company nor any Company Subsidiary shall, between the date of its subsidiaries shall:this Agreement and the Effective Time, directly or indirectly, do any of the following without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned):
(ia) amend or otherwise change its Certificate certificate or articles of Incorporation incorporation, bylaws or By-Laws or any similar governing instrumentsequivalent organizational documents;
(iib) issue, deliversell, selltransfer, lease, sublease, license, pledge, dispose of of, grant or encumber encumber, or authorize the issuance, sale, transfer, lease, sublease, license, pledge, disposition, grant or encumbrance of, (i) any shares of capital stockany class of shares of the Company or any Company Subsidiary (other than in connection with the exercise or performance of any Company Options, ownership interests Restricted Shares or voting securitiesRSUs granted prior to the date of this Agreement in accordance with the Stock Incentive Plans or granted on or after the date of this Agreement as permitted by Section 5.01(i)), or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stockof, or any other ownership interests interest (including any phantom interest) in, the Company or any voting securities Company Subsidiary (except as permitted by Section 5.01(i)) or (ii) any property or assets (whether real, personal or mixed, and including but not limited to stock appreciation rights, phantom stock or similar instruments), leasehold interests and intangible property) of the Company or any Company Subsidiary, except in the ordinary course of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or business and in connection a manner consistent with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)past practice;
(iiic) 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 shares, or split, combine or reclassify any dividend or distribution of its shares, other than dividends paid by a subsidiary of the Company to the Company or another wholly owned subsidiary Company Subsidiary to its parent in the ordinary course of the Company)business;
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire acquire, directly or indirectly, any shares of capital stock its shares, or any options, warrants, convertible securities or other rights exchangeable into or convertible or exercisable for any of its shares, other than (i) the Company (except for the acquisition forfeiture or repurchase of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Planequity awards outstanding on the date of this Agreement or granted after the date of this Agreement as permitted by Section 5.01(i), (ii) the surrender of any Common Shares by current or reclassifyformer directors, combineofficers, split or subdivide any capital stock employees, consultants or other ownership interests service providers of the Company or any Company Subsidiary in payment of withholding Taxes with respect to any equity awards, or (iii) the cashless or net exercise of Options (including in payment of any of the Company’s subsidiariesexercise price or withholding Taxes);
(ve) make effect or commence any acquisition liquidation, dissolution, scheme of arrangement, merger, consolidation, amalgamation, restructuring, reorganization or similar transaction involving the Company or any Company Subsidiary, or create any new Company Subsidiaries, other than the merger, consolidation, amalgamation or other combination of any wholly owned Company Subsidiary with any other wholly owned Company Subsidiary;
(whether f) enter into, or propose in writing to any Third Party to enter into, any transaction involving any earn-out, installment or similar payment to or from the Company or any Company Subsidiary, by or to any Third Party, other than the purchase and sale of goods and services in the ordinary course of business;
(i) acquire (including, without limitation, by merger, consolidation consolidation, scheme of arrangement, amalgamation or acquisition of stock or substantially all of the assets), assets or any other business combination) or make any capital contribution or investment in any interest in, any corporation, partnership or partnership, other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, (other than sales or dispositions in the ordinary course of business any wholly owned Company Subsidiary or pursuant to existing Contracts;
Contracts or obligations outstanding on the date hereof) or acquire (vii) other than in the ordinary course of business consistent with past practicebusiness) any significant amount of assets; (ii) incur, enter into assume, or guarantee any Indebtedness, or issue any debt securities, in excess of US$300,000 in the aggregate, or alter, amend or modify the terms of any Indebtedness in a manner materially adverse to the Company and the Company Subsidiaries, taken as a whole, or make any loans or advances in excess of US$50,000 individually or US$300,000 in the aggregate; (iii) create or grant any material Lien (other than Permitted Liens) on any assets of the Company or any Company Subsidiary; or (iv) make any commitment with respect to, any Contract;
(viii) authorize any material new single capital expenditure which is in excess of US$150,000 or make capital expenditures which are, in the aggregate, in excess of US$300,000 for the Company’s capital expenditure budget set forth on Section 3.8 Company and the Company Subsidiaries taken as a whole, other than expenditures that are necessary to maintain existing assets in good repair, consistent with past practice;
(h) (A) enter into any new employment or compensatory agreements, or amend any such agreements (including any Company Employee Agreement), with any director, officer, employee or consultant of the Company Disclosure Schedule;
or any Company Subsidiary (ixother than (i) except for borrowings under the Company’s existing credit facilitieshiring, incur promotion, demotion or modify in any material respect in termination of at-will employees or consultants below officer level with an manner adverse annual salary of less than US$150,000 (or its RMB equivalent), provided, that, subject to the Company Board's fiduciary obligations as determined by the terms Company Board in its good faith judgment after consultation with outside legal counsel, the Company shall not demote or terminate the employment of any indebtedness for borrowed moneyemployee who is a Rollover Holder absent Parent’s consent, (ii) the renewal or assumereplacement of existing agreements on substantially similar terms and (iii) the hiring of at-will employees to fulfill open positions disclosed to Parent prior to the date hereof), guarantee (B) grant or endorseprovide any rights to severance or termination payments or benefits to any director, officer or otherwise as an accommodation become responsible foremployee of the Company or any Company Subsidiary, (C) increase the obligations of compensation, bonus or pension, welfare or other benefits of, pay any personbonus to, or make any loansnew equity awards to any director, advances officer or capital contributions to employee of the Company or any Company Subsidiary or any other person (other than a subsidiary of the Company), in each case, other than (i) annual salary increases in the ordinary course of business consistent with past practicebusiness, pursuant not to letters exceed 4% for any employee who is not a Rollover Holder and commensurate increases in other compensation and benefits based on salary and (ii) equity awards permitted by Section 5.01(i)), (D) establish, adopt, amend or terminate in a manner adverse to the Company any Company Employee Plan or amend the terms of credit any outstanding award under any Stock Incentive Plan in a manner adverse to the Company, (E) accelerate the vesting or otherwise;
(x) except payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Employee Plan or Company Employee Agreement, to the extent not already required under in any such plan (it being understood that the vesting of all equity awards shall be accelerated in full in connection with the Merger), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Employee Benefit Plan or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by applicable lawGAAP, or (AG) increase the compensation or fringe benefits of forgive any of its loans to directors, officers or employees of the Company or any Company Subsidiary;
(i) issue or grant any Company Option or other equity award to any person under any Stock Incentive Plan, except in the ordinary course of business and consistent with past practice;
(j) make any changes with respect to employees who are not directors any credit practice, method of financial accounting, or officersfinancial accounting policies or procedures, including changes affecting the reported consolidated assets, liabilities or results of operations of the Company and the Company Subsidiaries, except as required by GAAP;
(k) pay, discharge or satisfy any material debt, other than the payment, discharge or satisfaction of such debt as they become due in the ordinary course of business and consistent with past practice;
(l) enter into, amend, modify or consent to the termination of any Material Contract (or any Contract that would be such a Material Contract if such Contract had been entered into prior to the date hereof) (except, in each case, as otherwise permitted by this Section 5.01), or waive or consent to the termination of the Company’s or any Company Subsidiary’s rights thereunder, except in each case in the ordinary course of business;
(B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (Cm) enter into any employmentContract between the Company or any Company Subsidiary, consulting or severance agreement or arrangement with on the one hand, and any of its present their respective Affiliates, directors or former directorsexecutive officers, officers or on the other employeeshand, except for offers of employment other than (i) reasonable expense reimbursement to Company Personnel in the ordinary course of business and consistent with past practice with employees who are not directors and (ii) as permitted by Section 5.01(h) or officersSection 5.01(i);
(n) terminate or cancel, (D) establishlet lapse, adopt, enter into or amend or modify in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonusrespect, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than renewals in the ordinary course of business, any material insurance policies maintained by it which are not promptly replaced by a comparable amount of insurance coverage;
(o) commence or settle any material Action;
(p) engage in the conduct of any new line of business material to the Company and the Company Subsidiaries, taken as a whole;
(q) make, revoke or change any material Tax election (except as required by applicable lawLaw), (A) make materially amend any Tax election Return or change waive any method statute of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return limitations with respect to any Taxmaterial Tax claim or assessment, (D) change any annual Tax accounting period, (E) enter into any material closing agreement relating with respect to any material Tax or (F) Taxes, surrender any right to claim a Tax refund;
(xiii) material refund of Taxes, settle or compromise finally resolve any litigationmaterial controversy with respect to Taxes, or materially change any method of Tax accounting, or fail to duly and timely file all Tax Returns and other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive material documents required to be filed with any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than taxing authority in the ordinary course of business consistent accordance with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixr) agree publicly announce an intention or enter into any binding agreement to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Sources: Merger Agreement (MEMSIC Inc)
Conduct of Business Pending the Merger. Section 5.1 SECTION 6.1. Conduct of Business of the Company Pending the Merger.
(a) Between the date of this Agreement . The Company covenants and the Effective Timeagrees that, except as otherwise expressly permitted or contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, Agreement or as set forth in Section 5.1 6.1 of the Company Disclosure ScheduleLetter, as required by law or until the Effective Time, unless the Parent shall otherwise consent agree in writing (which consent shall not be unreasonably withheldprior to the taking of any action otherwise prohibited by the terms of this Section 6.1, delayed or conditioned), (A) the business of the Company shall, and shall cause REI Barbados to, conduct its subsidiaries shall be conducted operations and business in its the ordinary and usual course of business and the Company shall consistent with past practice and use its reasonable best efforts to preserve substantially intact its business organizationorganizations' goodwill, maintain in effect all existing material qualifications, licenses, permits, approvals and other authorizations, substantially comply with all applicable Laws, keep available the services of its present executive officers and key employees, and material preserve the goodwill and business relationshipsrelationships with suppliers, (B) distributors, customers and others having business relationships with it. Without limiting the Company shall perform its obligations under this Agreement, and (C) without limiting generality of the foregoing, neither and except as otherwise expressly permitted by this Agreement or as set forth in Section 6.1 of the Company nor any Disclosure Letter, prior to the Effective Time, without the prior written consent of its subsidiaries shallthe Parent, the Company will not, and will cause REI Barbados not to:
(ia) except to the extent required by Law or the rules and regulations of The Nasdaq Stock Market, amend or otherwise change its Certificate the articles of Incorporation incorporation or By-Laws or any similar governing instrumentsbylaws of the Company;
(iib) issue, deliverissue or authorize or propose the issuance of, sell, pledgepledge or dispose of, dispose of grant or encumber otherwise create, or agree to issue or authorize or propose the issuance, sale, pledge or disposition of, grant or otherwise create any additional shares of capital stock, ownership interests or voting securitiesof, or any options, warrants, convertible securities or other rights of any kind Options to acquire or receive any shares of of, its capital stock, any other ownership interests stock or any voting debt or equity securities (including but not limited to stock appreciation rights, phantom convertible into or exchangeable for such capital stock or similar instruments), accelerate any right to convert or exchange or acquire any securities of the Company for any such shares or ownership interest or take any of its subsidiaries action to cause to be exercisable any otherwise unexercisable option under any Company Stock Option granted under any Company Option Plan, other than (except for (Ai) the issuance of 1,010,101 shares of Company Common Shares Stock upon the conversion of the Convertible Notes, (ii) any such issuance pursuant to the exercise of Company Stock Options or in connection with other stock-based awards outstanding as of granted prior to the date of this Agreement, in each casehereof under the Company Option Plans, in accordance with their respective terms as in effect on the date hereof, (iii) the issuance of shares of Company Common Stock pursuant to the Company ESPP in accordance with its terms as in effect on the date hereof in accordance with Section 3.2(g).
(c) purchase, redeem or otherwise acquire or retire, or offer to purchase, redeem or otherwise acquire or retire, (i) any shares of its capital stock (including any Company Stock Option PlanOptions with respect to its capital stock and any security convertible or exchangeable into its capital stock), or (Bii) issuances in accordance with the Rights Plan)any long-term debt;
(iiid) 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 any dividend stock, or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) subdivide, reclassify, combinerecapitalize, split, subdivide, redeem, purchase combine or otherwise acquire exchange any of its shares of capital stock of or otherwise change its capitalization as it exists on the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesdate hereof;
(ve) make incur or become contingently liable with respect to any acquisition of (whether by merger, consolidation indebtedness for borrowed money or acquisition of stock the deferred purchase price for property or substantially all of the assets), services or make pursuant to any investment in any interest in, any corporation, partnership capital lease or other business organization financing or division thereofguarantee any such indebtedness or issue any debt securities;
(vif) sell except as may be required by applicable Laws, or otherwise dispose of as contemplated by this Agreement, (whether by mergeri) increase the compensation payable or to become payable to, consolidation or disposition of stock enter into any employment agreement with, its executive officers or assets or otherwise) any corporationemployees, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant except to existing Contracts;
(vii) other than non-executive officers in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
; (viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (Bii) grant any severance or termination pay not provided for under to any Employee director, executive officer or employee of the Company or REI Barbados, except pursuant to existing Company Benefit Plan, Plans; (Ciii) enter into any employment, consulting or severance agreement with any director, executive officer or arrangement employee; or (iv) except as required by applicable Laws, establish, adopt, enter into, terminate, withdraw from or amend in any material respect or take action to accelerate or waive (or otherwise diminish) any rights or benefits under any Company Benefit Plan or any other plan, program or arrangement, or any material employment policy;
(g) take any action, other than reasonable actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including Tax accounting policies, procedures and elections relating to Taxes that would apply to the Company after the Merger), except as may be required by generally accepted accounting principles, or settle any material Audit, make any material Tax election or settle any material Tax liability or, except as required by Law, amend in any material respect any material Tax Return;
(h) acquire or agree to acquire by merging or consolidating with, or by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business entity;
(i) mortgage or otherwise encumber or subject to any Lien, or sell, transfer or otherwise dispose of (by merger or otherwise), any of its present properties or former directorsassets, officers or other employees, except for offers of employment than encumbrances and Liens that are incurred in the ordinary course of business and consistent with past practice with employees who are not directors or officersand sales, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 transfers and dispositions of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than inventory in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return and consistent with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refundpast practice;
(xiiij) settle or compromise any litigation, other than settlements material pending or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008threatened Litigation;
(xivk) waive make any right advance, loan, extension of value material credit or capital contribution to, or purchase or acquire (by merger or otherwise) any stock, bonds, notes, debentures or other securities of, or any assets constituting a business unit of, or make any other investment in, any person, firm or entity, except (a) extensions of trade credit and endorsements of negotiable instruments and other negotiable documents in the ordinary course of business, (b) investments in cash and cash equivalents, and (c) payroll and travel advances in the ordinary course of business;
(l) make any capital expenditures in the aggregate for the Company and REI Barbados in excess of the amounts specified in the Company's budget for capital expenditures, a true and complete copy of which has previously been delivered to the Parent;
(m) waive, amend or allow to lapse any term or condition of any confidentiality or "standstill" agreement to which the Company is a party;
(n) enter into (a) any Contracts with distributors or sales agents other than Contracts terminable without penalty on less than 30 days' notice, (b) any subsidiary Contracts to distribute products for others or which restrict the ability of the Company, REI Barbados or the Company's affiliates to compete or (c) any other Contracts that would constitute Material Contracts; or amend any of the foregoing agreements as they exist on the date hereof;
(o) amend, change or waive (or exempt any person or entity from the effect of) the Rights Agreement, or redeem the Rights, except in connection with the transactions contemplated under this Agreement or the Ancillary Documents;
(p) change any of the accounting principles or practices used by the Company;
(xvq) adopt a plan of liquidation effect any material change in the Company's advertising, product promotion or resolutions providing for the liquidation, dissolution, merger, consolidation brand support policies or other reorganization of the Company programs or commit to any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parentsignificant new product promotion or advertising campaign;
(xvir) effect any material change in the Company's billing practices or sales terms, or cause or permit a material acceleration or delay in the manufacture, shipment or sale of inventory, the collection of accounts or notes receivable or the payment of accounts or notes payable;
(s) enter into any Contracts for Derivatives;
(t) waive, relinquish, release or terminate any right or claim, including any such right or claim under any Material Contract, except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with the customary past practicepractice of the Company, or permit any rights of material value to use any Intellectual Property to lapse or be forfeited;
(xviiu) materially change take any action to cause the Company Common Stock to be delisted from the NASDAQ National Market prior to the completion of its business policiesthe Offer;
(xviiiv) other than take any action that would reasonably be expected to result in the ordinary course of business consistent with past practice, enter into any lease (as lessor conditions contained in Section 8.2(a) or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses8.2(b) not to be satisfied; or
(xixw) authorize any of, or commit or agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Timeof, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchangeforegoing actions.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of SECTION 5.1. CONDUCT OF BUSINESS OF THE COMPANY PENDING THE MERGER During the Company Pending the Merger.
(a) Between period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company agrees as to itself and each of its Subsidiaries (except to the extent that Acquiror shall otherwise consent in writing) to carry on its business in the ordinary course in substantially the same manner as previously conducted, to pay its debts and taxes when due, subject to good faith disputes over such debts or taxes, in the ordinary course in substantially the same manner as previously paid, to pay or perform its other obligations when due in the ordinary course in substantially the same manner as previously paid or performed, to maintain insurance coverages and its books, accounts and records in the usual manner consistent with past practices, to comply in all material respects with all applicable laws, ordinances and regulations of Governmental Entities, to maintain and keep its properties and equipment in good repair, working order and condition (except ordinary wear and tear), and, to the extent consistent with such business, use all reasonable efforts consistent with past practices and policies to preserve intact its present business organization, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, and others having business dealings with it. Without limiting the generality of the foregoing and except as otherwise expressly contemplated by this Agreement, or as specifically disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or unless Parent shall otherwise the Effective Time, without the written consent in writing of Acquiror (which consent shall will not be unreasonably withheld, delayed withheld or conditioneddelayed), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, not and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor not permit any of its subsidiaries shallSubsidiaries to:
(ia) amend adopt or otherwise change propose any amendment to its Certificate certificate of Incorporation incorporation or By-Laws bylaws or any similar governing instrumentscomparable charter or organizational documents except as contemplated by this Agreement;
(iib) (i) issue, deliver, pledge or sell, pledgeor propose or authorize the issuance, dispose of pledge or encumber any sale of, additional shares of capital stockstock of any class (other than upon exercise of Company Stock Rights outstanding on the date of this Agreement upon payment of the exercise price thereof or upon any exchange of Exchangeable Shares), ownership interests or voting securitiessecurities convertible into capital stock of any class, or any optionssubscriptions, warrantsrights, warrants or options to acquire any convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests securities in respect of, in lieu of, or in substitution for, shares of Company Stock outstanding on the date hereof, (ii) amend, waive or otherwise modify any voting securities (including but not limited to of the terms of any option, warrant or stock appreciation rights, phantom stock or similar instruments), option plan of the Company or any of its subsidiaries (except for (A) Subsidiaries, including without limitation, the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option PlanRights and the Company Stock Plans, or authorize cash payments in exchange for any options granted under any of such plans, or (Biii) issuances in accordance with the Rights Plan)adopt or implement any stockholder rights plan;
(iiic) declare, set aside, make aside or pay any dividend or other distribution, payable distribution (whether in cash, stock, securities or property or otherwiseany combination thereof) in respect of any class or series of its capital stock other than between any wholly-owned Subsidiary of the Company (or the Canadian Sub) and the Company or any other wholly-owned Subsidiary of the Company (or the Canadian Sub), with respect to or purchase or otherwise acquire, directly or indirectly, any shares of its capital stock (except for any dividend or distribution by a subsidiary of other than the Company Exchangeable Shares pursuant to the Company or another wholly owned subsidiary of the Companyexchange rights thereof);
(ivd) reclassifysplit, combine, split, subdivide, reclassify or redeem, purchase or otherwise acquire acquire, or propose to redeem or purchase or otherwise acquire, any shares of its capital stock stock, or any of its other securities (other than the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Exchangeable Shares pursuant to the terms exchange rights thereof);
(e) increase the compensation or fringe benefits payable or to become payable to its directors, officers or employees (whether from the Company or any of a Company Stock Option Planits Subsidiaries), or reclassifypay any benefit not required by any existing plan or arrangement (including, combinewithout limitation, split or subdivide any capital the granting of stock options, stock appreciation rights, shares of restricted stock or other ownership interests of performance units) or grant any of the Company’s subsidiaries;
severance or termination pay to (v) make any acquisition of (whether by mergerexcept pursuant to existing agreements or policies previously disclosed in writing to Acquiror, consolidation or acquisition of stock or substantially all of the assetswhich shall be interpreted and implemented in a manner consistent with past practice), or make enter into any investment in any interest inemployment or severance agreement with, any corporationdirector, partnership officer or 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, savings, welfare, deferred compensation, employment, termination, severance or other business organization employee benefit plan, agreement, trust, fund, policy or division thereof;
(vi) sell arrangement for the benefit or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose welfare of any assetsdirectors, other than sales officers or dispositions current or former employees, including any Benefit Arrangement, Pension Plan or Welfare Plan, except (i) to the extent required by applicable law or regulation, (ii) pursuant to any collective bargaining agreements or Company Employee Plan as in effect on the date of this Agreement consistent with past practices, (iii) for salary and benefit increases in the ordinary course of business or consistent with past practice to employees other than executive officers of the Company, (iv) pursuant to existing ContractsSection 2.8 or (v) the grant of options consistent with past practice to new or promoted employees other than executive officers, which options represent in the aggregate the right to acquire no more than 500,000 shares (net cancellations) of Company Common Stock;
(viif) (i) sell, pledge, lease, dispose of, grant, encumber, or otherwise authorize the sale, pledge, disposition, grant or encumbrance of any of the properties or assets of the Company or any of its Subsidiaries (including stock of Subsidiaries), except for (A) sales of assets in the ordinary course of business, (B) sales of assets aggregating less than $5,000,000, (C) sales of accounts receivable under agreements with Fleet Bank and Sanwa Bank in effect as of the date hereof consistent with past practice, (D) sales of marketable securities aggregating less than $20,000,000, and (E) sales of assets under sale/leaseback arrangements with Fleet Bank in effect as of the date hereof consistent with past practice, or (ii) acquire (including, without limitation, by merger, consolidation, lease or acquisition of stock or assets) any corporation, partnership, other business organization or any division thereof (or a substantial portion of the assets thereof) or any other assets, except for acquisitions of assets in the ordinary course of business and except for acquisitions involving an aggregate purchase price not in excess of $10,000,000;
(g) (i) incur, assume or pre-pay any debt for borrowed money, other than pursuant to credit agreements, accounts receivable facilities, factoring arrangements and sale/leaseback arrangements in effect as of the date hereof consistent with past practice, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person (other than wholly-owned subsidiaries), (iii) make any loans, advances or capital contributions to, or investments in, any other person (including advances to employees), except for loans, advances, capital contributions or investments between any wholly-owned Subsidiary of the Company and the Company or another wholly-owned Subsidiary of the Company or which are reasonable, necessary, in the ordinary course and consistent with past practice, or (iv) enter into any "keep well" or other agreement to maintain the financial condition of another entity (other than the Company or any of its wholly-owned Subsidiaries);
(h) 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, other than in connection with the dissolution, merger or liquidation of inactive Subsidiaries;
(i) make or rescind any material express or deemed election relating to Taxes, settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, amend any material Tax Return except in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as may be required by applicable law, (A) increase the compensation or fringe benefits of make any change to any of its directorsmaterial methods of reporting income or deductions (including, officers without limitation, any change to its methods or employees (except basis or write-offs of accounts receivable) for federal income tax purposes from those employed in the ordinary course preparation of business with respect to employees who are not directors its federal income tax return for the taxable year ending January 3, 1998;
(j) pay, discharge or officerssatisfy any material claims, liabilities or obligations (absolute, accrued, asserted, unasserted, contingent or otherwise), (B) grant any severance other than the payment, discharge or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than reserved against in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary consolidated financial statements of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Sources: Merger Agreement (Learning Co Inc)
Conduct of Business Pending the Merger. Section 5.1 SECTION 6.1 Conduct of Business of the Company Pending the Merger.
(a) Between . From the date of this Agreement until the earlier of the Effective Time and the Effective Timetermination of this Agreement in accordance with Article IX, except as otherwise contemplated expressly permitted or required by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 6.1 of the Company Disclosure Schedule, as required by law applicable Laws or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), (Aa) (i) the business of the Company and its subsidiaries shall be conducted in its the ordinary course of business consistent with past practice and good utility practice and (ii) the Company and its subsidiaries shall use its their respective commercially reasonable best efforts to (x) preserve substantially intact the business organization of the Company and its business organizationSignificant Subsidiaries, and (y) maintain their respective relationships with Governmental Entities, customers, suppliers, contractors, distributors, creditors, lessors and other third parties that have material business relationshipsdealings with the Company or such subsidiary of the Company and its key employees, (Bb) the Company shall perform its obligations under this Agreementnot, and it shall cause each of its Affiliates not to, directly or indirectly, take any action (Cincluding any action with respect to a third-party) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement or their respective ability to satisfy their obligations hereunder, (c) the Company shall, and shall cause each subsidiary of the Company to, subject to circumstances beyond the Company’s reasonable control, make the capital expenditures as and when required to be made based on any approved allocation to the Company or any of its subsidiaries by the Regional Transmission Organizations, as part of the transmission planning process, (d) without limiting the foregoing, neither the Company nor any shall not, and shall cause each subsidiary of its subsidiaries shallthe Company not to:
(i) amend or otherwise change its Certificate the Company Articles of Incorporation or By-Laws the Company Bylaws or the equivalent organizational documents of any similar governing instrumentsSignificant Subsidiary, in each case in any material respect;
(ii) issuemake any acquisition of (whether by merger, deliverconsolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any Person, corporation, partnership or other business organization or division thereof or any assets, in each case, except for (A) purchases of equipment, inventory and other assets or pursuant to construction, operation and/or maintenance contracts, in each case in the ordinary course of business and good utility practice or pursuant to existing Contracts or (B) acquisitions or investments that do not exceed $100,000,000 in the aggregate;
(iii) issue or authorize the issuance, pledge, transfer, subject to any Lien, sell, pledgeor dispose of, dispose of or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for (A) for the issuance of shares of Company Common Shares Stock upon the exercise exercise, vesting or settlement of Options Options, Restricted Stock, Performance Shares or in connection with other stock-based awards Equivalent Performance Shares outstanding as of the date Capitalization Date or pursuant to the ESPPs, (B) for any issuance, sale or disposition to the Company or a wholly owned subsidiary of this Agreementthe Company by any subsidiary of the Company, in each case(C) for the grant of Restricted Stock on terms and conditions consistent with Section 6.1(d)(iii)(C) of the Company Disclosure Schedule, (D) for the issuance into notional accounts of additional Equivalent Performance Shares in accordance with the terms of the grant agreements relating to Performance Shares outstanding as of the Capitalization Date, or (E) for pledges or Liens relating to any indebtedness incurred in compliance with Section 6.1(d)(x);
(iv) reclassify, combine, split, subdivide or amend the terms of, redeem, purchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or any of its Significant Subsidiaries (except (A) for the acquisition of shares of Company Common Stock Option Plantendered by directors or employees in connection with a cashless or net settled exercise of Options or in order to pay the exercise price or Taxes in connection with the exercise, vesting or settlement of Options, Restricted Stock or Performance Shares or (B) issuances in accordance connection with a share repurchase program in effect as of the Rights Plandate hereof);
(iiiv) other than Permitted Liens or Liens relating to any indebtedness incurred in compliance with Section 6.1(d)(x), create or incur any Lien in excess of $50,000,000 in the aggregate of notional debt on any material assets of the Company or its subsidiaries (other than subsidiaries acquired following the date hereof);
(vi) make any loans or advances to any Person (other than the Company or any of its wholly-owned subsidiaries) other than in the ordinary course of business or not in excess of $25,000,000 in the aggregate;
(vii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell, assign, exclusively license, allow to expire, or dispose of any material assets, rights or properties other than (A) sales, dispositions or licensing of equipment and/or inventory and other assets in the ordinary course of business consistent with past practice or pursuant to Company Material Contracts in effect on the date hereof or (B) other sales, assignments, exclusive licenses, expirations or dispositions of assets, rights or properties to the Company or of assets, rights or properties with a value of less than $100,000,000 in the aggregate;
(viii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except (A) the Company may continue the declaration and payment of regular quarterly cash dividends on Company Common Stock, not to exceed the amount set forth on Section 6.1(d)(viii) of the Company Disclosure Schedule, with usual record and payment dates for such dividends in accordance with past dividend practice and (B) for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(viiix) other than in the ordinary course of business consistent with past practiceor as required by Law, enter into into, terminate, modify or amend in any material respect any Company Material Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ixx) except for borrowings in the ordinary course of business under the Company’s existing credit facilitiesand its subsidiaries’ Credit Facilities, except for issuances under the Company’s Commercial Paper Program and except for intercompany loans between the Company and any of its wholly owned subsidiaries or between any wholly owned subsidiaries, incur or repay indebtedness for borrowed money, or modify in any material respect in an a manner adverse to the Company or Ultimate Parent or any of its subsidiaries the terms of any such indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, endorse the obligations of any person, or make any loans, advances or capital contributions to any other person Person (other than a wholly owned subsidiary of the Company), in each case, other than (A) indebtedness incurred in the ordinary course of business consistent with past practicenot to exceed $50,000,000 in the aggregate, (B) pursuant to letters of credit in the ordinary course of business, (C) (a) to finance the activities of the Company and its subsidiaries, or otherwise(b) in replacement or refinancing of existing indebtedness for borrowed money, which with respect to the Company’s existing indebtedness matures within ninety (90) days of such replacement or refinancing, in each case as disclosed in the 2016 Financing Plan in Annex 6.1(i) of the Company Disclosure Schedule; provided, that (1) the terms (including covenants and default terms, but excluding interest rate, original issue discount, call protection and other financial terms) of such indebtedness are, in the reasonable determination of the Company, consistent with then current market terms or, solely with respect to the replacement or refinancing of existing indebtedness, no more restrictive, when taken as a whole, to the Company or its applicable subsidiary than the terms of the existing indebtedness that is being replaced or refinanced and, with respect to both subsections (C)(a) and (C)(b) above, shall not include any prohibition or restriction or condition restricting the ability of the Company or any of its subsidiaries, as applicable, to pay dividends or other distributions or to make or repay loans or advances to the Ultimate Parent other than (x) restrictions applicable only during the continuance of a default or event of default under the relevant agreement and (y) the restriction set forth in the Term Loan Credit Agreement of the Company, dated as of December 20, 2013, which permits the payment of dividends or other distributions if, after giving effect thereto, the rating of the debt of the Company or any of its subsidiaries, as applicable, shall be BBB— or higher, and any restriction on change of ownership or control shall include an exception for the Merger and (2) any financing of the activities of the Company and its subsidiaries so incurred under subsection (C)(a) may not exceed the aggregate principal amount set forth in the 2016 Financing Plan in Annex 6.1(i) of the Company Disclosure Schedule, and any replacement or refinancing indebtedness so incurred must not exceed the aggregate principal amount of the indebtedness being replaced or refinanced, plus any accrued and unpaid interest on and premiums, fees, costs and expenses paid in connection with such repayment or refinancing, (D) guarantees by the Company or its subsidiaries of indebtedness of its subsidiaries, or (E) any commodity, currency, sale or hedging agreements in the ordinary course, consistent with past practice and good utility practice which can be terminated on ninety (90) days or less notice; provided, that any indebtedness incurred in accordance with this Section 6.1(d)(x) shall not reasonably be expected to adversely affect Ultimate Parent’s, Parent’s or Merger Sub’s ability to consummate the Financing;
(x1) except to as required by the extent required under any Employee Benefit existing terms of a Company Plan or as required by applicable lawset forth on Section 6.1(d)(xi) of the Company Disclosure Schedule, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect business, including pursuant to employees who are not directors or officersthe Company’s regular merit review process), (B) grant any severance or termination pay not provided for under to any Employee Benefit Planof its officers (except in the ordinary course of business), (C) enter into into, amend, change or revise any employment, change in control, consulting or severance agreement or arrangement with the chief executive officer of the Company or any of its present his direct reports or former directors, officers terminate the chief executive officer of the Company or any of his direct reports other employees, except than for offers of cause (as defined under the applicable employment in the ordinary course of business and consistent with past practice with employees who are not directors or officersagreement), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable Laws, (E) take any action to amend, waive or accelerate the vesting criteria or vesting requirements of payment of any compensation or benefit under any Company Plan or remove any existing restrictions in any Company Plans or awards made thereunder or (F) take any action to accelerate the payment, or to fund or in any other way secure the payment, of compensation or benefits under any Company Plan, to the extent not already provided in any such Company Plan or (2) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan Company Plan, enter into, amend or (E) pay or become obligated to pay terminate any bonus, severance collective bargaining agreement or other amounts to any officer agreement with a labor union, works council or employee other than as set forth in Section 3.24 of the Company Disclosure Schedulesimilar organization;
(xixii) make any material change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles GAAP or regulatory requirements with respect thereto;
(xiixiii) other than in the ordinary course of business or as required by applicable lawLaw or GAAP, (A) make any Tax election or change any method of accountingmaterial Tax election, (B) enter into surrender any settlement or compromise material claim for a refund of any Tax liabilityTaxes, (C) file enter into any amended Tax Return with respect to agreement materially affecting Taxes due for any Taxtaxable period ending after the Closing Date, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any material liability for Taxes, or (E) amend in a material respect any Tax Return;
(xiv) other than in the ordinary course of business or as required by applicable Law, enter into or amend in any material respect any collective bargaining agreement with any labor organization representing any Company Employees;
(xv) waive, release, assign, discharge, settle, satisfy or compromise any material litigation, other than settlements the waiver, release, assignment, discharge, settlement, satisfaction or compromises of litigation where the amount paid does not exceed $250,000 25,000,000 in the aggregate or, if greater, does not materially exceed the total incurred cash case reserve amount for such matter, matter maintained by the Company and/or its subsidiaries as of in effect prior to the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xivxvi) waive any right of value material to merge or consolidate the Company or any subsidiary of the Company;
(xv) its subsidiaries with any Person or adopt a plan of complete or partial liquidation or resolutions providing for the a complete or partial liquidation, dissolution, mergerrestricting, consolidation recapitalization or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practicesubsidiaries;
(xvii) materially change make or commit any capital expenditures, in the period from the date hereof until December 31, 2016, or in the twelve (12) month period ending December 31, 2017, that in the aggregate exceed the Company’s capital expenditures budget as disclosed in Section 6.1(d)(xvii) of the Company Disclosure Schedule for such period; provided, however, that notwithstanding the foregoing, the Company and its business policies;subsidiaries shall be permitted to make emergency capital expenditures in any amount (A) required by a Governmental Entity or (B) that the Company determines is incurred in connection with the repair or replacement of facilities destroyed or damaged due to casualty or accident or natural disaster or other force majeure event necessary to maintain or restore safe, adequate and reliable electric transmission service; provided, further, that the Company shall use commercially reasonable efforts to consult with Parent prior to making or agreeing to make any such expenditure described in clauses (A) or (B) above; or
(xviii) other than in the ordinary course of business consistent with past practiceagree, enter into any lease (as lessor authorize or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree commit to take do any of the foregoing actions described in Section 5.1(a)(i6.1(d)(i) through Section 5.1(a)(xviii6.1(d)(xvii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.and
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 5.01. Conduct of Business of by the Company Pending the Merger.
(a) Between . The Company covenants and agrees that, between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 5.01 of the Company Company's Disclosure Schedule, or as required by law or otherwise expressly provided for in this Agreement, unless Parent expressly shall otherwise consent in writing agree (which consent agreement shall not be unreasonably withheldwithheld or delayed) in writing, delayed or conditioned), (A) the business of the Company and its subsidiaries Business shall be conducted in its only in, and the Company 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 reasonable best efforts to preserve substantially intact its business organization, to keep available the services of the current officers, employees and material consultants of the Company and to preserve the current relationships of the Company with customers, distributors, suppliers, licensors, licensees, contractors and other persons with which the Company has significant business relationshipsrelations and the Company will take no action not authorized hereby which would adversely affect its ability to consummate the Merger or the other transactions contemplated hereby. By way of amplification and not limitation, (B) except as expressly provided for in this Agreement, or as set forth in Section 5.01 of the Company Disclosure Schedule, the Company shall perform its obligations under not, between the date of this AgreementAgreement and the Effective Time, and (C) without limiting the foregoingdirectly or indirectly do, neither the Company nor or propose to do, any of its subsidiaries shallthe following without the prior written consent of Parent, which consent shall not be unreasonably withheld or delayed:
(ia) amend or otherwise change its Certificate Articles of Incorporation or By-Laws or any similar governing instrumentslaws;
(iib) issue, deliversell, selllicense, transfer, pledge, dispose of of, grant or encumber encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of capital stock, ownership interests or voting securitiesstock of any class of the Company, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instrumentsinterest), of the Company or (ii) any assets of its subsidiaries (the Company, except for (A) sales of assets in the issuance ordinary course of Common Shares upon the exercise of Options or business and in connection a manner consistent in all material respects with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)past practice;
(iiic) 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 any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company)stock;
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options acquire, directly or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan)indirectly, or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesits capital stock;
(vi) make any acquisition of acquire (whether including, without limitation, by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or partnership, limited liability company, other business organization or any division thereof;
(vi) sell , or otherwise dispose any material amount of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, securities other than sales or dispositions assets acquired in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business and consistent with past practice, practices; or (ii) enter into or amend any contract with respect to any matter set forth in any material respect any Contractthis subsection (e);
(viiii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loansloans or advances, advances or capital contributions to any other person (other than a subsidiary of the Company)except, in each casethe case of indebtedness for borrowed moneys, other than in the ordinary course of business and consistent in all material respects with past practicepractice but in no event in an amount in excess of $500,000 in the aggregate; (ii) authorize capital expenditures which are, pursuant in the aggregate, in excess of $500,000 for the Company; (iii) enter into or amend any contract, agreement, commitment or arrangement material to letters of credit the Company; or otherwise(iv) incur any liabilities except for liabilities which, individually or in the aggregate, would not have a Company Material Adverse Effect;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Ag) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business and consistent in all material respects with past practice) the compensation payable or to become payable to its officers or employees generally, or except with respect to employees who are not directors or officers)annual bonuses approved at the Company's Board of Directors meeting held on December 9, (B) 1997 and specified on Section 5.01 of the Company's Disclosure Schedule, grant any bonus, severance (except as consistent with past practice and not in excess of three months base salary without the written consent of Parent) or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting or severance agreement with any person, or pay or agree to pay any pension, retirement or other benefit (except as required under agreements, plans or other arrangements existing as of September 30, 1997), establish, adopt, enter into, become obligated under or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termi- nation, severance, welfare, multiemployer, employee benefit or other plan, agreement, trust, fund, policy or arrangement with for the benefit of any past or present director, officer or employee;
(h) make any change in tax accounting methods or make any material tax election or settle or compromise any material federal, state, local or foreign income tax liability;
(i) take any action that would or is reasonably likely to result in any of its present the covenants and agreements set forth in this Article V or former directors, officers in Article VI or other employees, any of the conditions set forth in Article VII not being satisfied as of the Closing Date;
(j) knowingly take any action that could reasonably be expected to prevent the Merger from constituting a transaction qualifying under Section 368(a) of the Code; or
(k) except for offers the payment of employment reasonable professional fees relating to the 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 $250,000 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 1997 Balance Sheet or subsequently incurred in the ordinary course of business and consistent with past practice with employees who are not directors or officerscollect, or accelerate the collection of, any amounts owed (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xiiincluding accounts receivable) other than collection in the ordinary course.
(l) except in the ordinary course of business or as required by applicable lawotherwise expressly contemplated hereby, grant or acquire any material licenses to use any Intellectual Property Rights or unpatented inventions set forth in Section 3.11 of the Company Disclosure Schedule; provided that the Company shall not grant any material licenses to use any material Intellectual Property Rights or unpatented inventions so set forth without the prior written consent of Parent, which consent shall not be unreasonably withheld;
(Am) make any Tax election or change any method of accountingexcept as otherwise expressly contemplated hereby, (B) enter into any settlement other agreements, commitments or compromise of any Tax liabilitycontracts, (C) file any amended Tax Return with respect to any Taxexcept agreements, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax commitments or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing contracts for the liquidationpurchase, dissolution, merger, consolidation sale or other reorganization lease of the Company goods or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than services in the ordinary course of business and consistent in all material respects with past practice;
(n) authorize, recommend, propose or announce an intention to authorize, recommend or propose, or enter into any agreement in principle or an agreement with any other person with respect to, any plan of liquidation or dissolution, any disposition of a material amount of assets or securities or any material change in the Company's capitalization, or any entry into a material contract or any amendment or modification of any material contract or any release or relinquishment of any material contract rights not in the ordinary course of business and consistent with past practice except as expressly contemplated by this Agreement;
(o) permit any insurance policy naming it as a beneficiary or a loss payee to be cancelled, terminated or materially altered, except in the ordinary course of business and consistent in all material respects with past practice and following written notice to Parent;
(p) maintain its books and records in a manner not in the ordinary course of business and substantially consistent with past practice;
(xviiq) materially enter into any hedging, option, derivative or other similar transaction;
(r) institute any change in its accounting methods, principles or practices or revalue any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its respective assets, properties including without limitation, writing down the value of inventory or businesseswriting off notes or accounts receivables; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixs) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Sources: Merger Agreement (Elan Corp PLC)
Conduct of Business Pending the Merger. Section 5.1 SECTION 4.01. Conduct of Business of by the Company Pending the Merger.
(a) Between . During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company covenants and agrees that, unless Parent shall otherwise agree in writing, and except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 4.01 of the Company Disclosure Schedule, as required by law or unless Parent the Company shall otherwise consent in writing (which consent conduct its business and shall cause the businesses of its subsidiaries to be conducted only in, and the Company and its subsidiaries shall not be unreasonably withheldtake any action except in, delayed or conditioned), (A) the ordinary course of business and in a manner consistent with past practice; and the Company shall use 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 shall be conducted in its ordinary course and to preserve the present relationships of business and the Company shall use and its reasonable best efforts to preserve substantially intact its business organizationsubsidiaries with customers, suppliers and material business relationships, (B) other persons with which the Company shall perform or any of its obligations under subsidiaries has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, and (C) without limiting the foregoing, 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 the Effective Time, and except as set forth in Section 4.01 of the Company Disclosure Schedule, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its Certificate the Company's Articles of Incorporation or By-Laws or any similar governing instrumentsLaws;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests 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 under the Company Stock Option Plan, which options are outstanding on the date hereof);
(c) sell, pledge, dispose of or encumber any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), assets of the Company or any of its subsidiaries (except for (Ai) sales of assets in the issuance ordinary course of Common Shares upon the exercise business and in a manner consistent with past practice, (ii) dispositions of Options obsolete or worthless assets, and (iii) sales of immaterial assets not in connection with other stock-based awards outstanding as excess of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan$500,000);
(iiii) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a wholly owned subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or otherwise, with respect to reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (except for iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any dividend subsidiary to purchase, repurchase, redeem or distribution by a subsidiary 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 Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth those listed on Section 3.8 4.01(e) of the Company Disclosure Schedule;
; (ixii) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, except for borrowings and reborrowing under the Company's existing credit facilities or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's subsidiaries entered into in the ordinary course of business) or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loansloans or advances, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than except in the ordinary course of business consistent with past practice; (iii) authorize any capital expenditures or purchase of fixed assets which are, pursuant in the aggregate, in excess of the amount set forth in Section 4.01 of the Company Disclosure Schedule for the Company and its subsidiaries taken as a whole; or (iv) enter into or amend any contract, agreement, commitment or arrangement to letters effect any of credit or otherwisethe matters prohibited by this Section 4.01(e);
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Af) increase the compensation payable or fringe benefits of any of to become payable to its directors, officers or employees, except for increases in salary or wages of employees (except of the Company or its subsidiaries in the ordinary course of business accordance with respect to employees who are not directors past practices, or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting employment or severance agreement agreement, in excess of $100,000 with any director, officer or arrangement with other employee of the Company or any of its present subsidiaries, or establish, adopt, enter into or amend any collective bargaining, agreement, Employee Plan (within the meaning of Section 2.11 of this Agreement), trust, fund, policy or arrangement for the benefit of any current or former directors, officers or other employeesemployees or any of their beneficiaries, 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, except to the extent the amount of any such settlement has been reserved for offers in the financial statements contained in the Company SEC Reports filed prior to the date of employment this Agreement;
(i) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into or amend reserved against in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth the financial statements contained in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate SEC Reports filed prior to conform to changes in statutory the date of this Agreement or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixj) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.01(a) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that wouldabove, or any action which would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation make any of the Merger representations or warranties of the other transactions contemplated by Company contained in this AgreementAgreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Sources: Merger Agreement (Inbrand Corp)
Conduct of Business Pending the Merger. Except as set forth in Section 5.1 Conduct of Business 5 of the Disclosure Schedule and as specifically contemplated by this Agreement, the Company Pending the Merger.
(a) Between covenants and agrees that, between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date Time or earlier termination of this Agreement, as set forth unless Parent otherwise consents in Section 5.1 of writing:
(a) the Company Disclosure Scheduleshall conduct its business and shall cause the businesses of its Subsidiaries to be conducted only in, as required by law or unless Parent shall otherwise consent in writing (which consent and the Company and its Subsidiaries shall not be unreasonably withheldtake any action except in, delayed or conditioned)the ordinary course of business and in a manner consistent with past practice, (A) and the Company will use its commercially reasonable efforts to preserve substantially intact the business organization of the Company and its subsidiaries shall be conducted in its ordinary course Subsidiaries, to keep available the services of business the present officers, key employees and consultants of the Company shall use and its reasonable best efforts Subsidiaries and to preserve substantially intact 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 organization, and material business relationships, relations;
(Bb) the Company shall perform will not amend its obligations under this AgreementCertificate of Incorporation or By-Laws;
(c) the Company will not declare, set aside or pay any dividend or other distribution payable in cash, securities or property with respect to its capital stock, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shall:
Subsidiaries will (i) amend or otherwise change its Certificate of Incorporation or By-Laws or any similar governing instruments;
(ii) issue, deliversell, selltransfer, pledge, dispose of or encumber any additional shares of capital stock, ownership interests or voting securitiesof, or any securities convertible into or exchangeable for, or options, warrants, convertible securities calls, commitments or other rights of any kind to acquire or receive acquire, any shares of capital stock, stock of any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), class of the Company or any of its subsidiaries Subsidiaries, other than issuances of Shares pursuant to securities, options, warrants, calls, commitments or rights existing at the date of this Agreement and previously disclosed to Parent in writing (except for including as disclosed in the SEC Reports), (Aii) the issuance incur any long-term indebtedness (whether evidenced by a note or other instrument, pursuant to a financing lease, sale-leaseback transaction, or otherwise) or incur short-term indebtedness other than under lines of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of credit existing on the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declareredeem, set asidepurchase, make repurchase or pay any dividend otherwise acquire directly or other distribution, payable in cash, stock, property or otherwise, with respect to indirectly any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
other securities, (iv) reclassify, combine, split, subdivide, redeem, purchase combine or otherwise acquire reclassify any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any its capital stock or other ownership interests issue or authorize or propose the issuance of any other securities in respect of, in lieu of the Company’s subsidiaries;
or in substitution for shares of its capital stock, or (v) make any acquisition of (whether by mergerenter into, consolidation amend, terminate, renew or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant fail to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend use reasonable efforts to renew in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation Material Contract or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, Identified Contract except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xviid) materially change neither the Company nor any of its Subsidiaries will, except pursuant to employment contracts in effect on the date hereof, (i) grant any increase in the compensation payable or to become payable by the Company or any of its Subsidiaries to any employee other than increases in the ordinary course of business policiesconsistent with past practice to non-officer employees of the Company, (ii) adopt, enter into, amend or otherwise increase, or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under any bonus, incentive compensation, deferred compensation, severance, termination, change in control, retention, hospitalization or other medical, 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 (iii) enter into or amend in any material respect any employment or collective bargaining agreement or, except in accordance with the existing written policies of the Company or existing contracts or agreements, grant any severance or termination pay to any officer, director, employee or consultant of the Company or any of its Subsidiaries;
(xviiie) neither the Company nor its Subsidiaries will change the accounting principles used by it unless required by US GAAP (or, if applicable with respect to Subsidiaries, foreign generally accepted accounting principles);
(f) neither the Company nor any of its Subsidiaries will acquire by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire any assets of any other Person (other than the purchase of assets from suppliers or vendors in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition ) for an amount in excess of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to$500,000, individually or in the aggregate;
(g) neither the Company nor any of its Subsidiaries will sell, preventlease, materially delay exchange, transfer or materially impede otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any of its assets except in the consummation ordinary course of business consistent with past practice;
(h) the Company and its Subsidiaries will not mortgage, pledge, hypothecate, grant any security interest in, or otherwise subject to any other lien on any of its properties or assets other than Permitted Liens (except for Permitted Liens described in Section 9.4(d)(ii) of this Agreement);
(i) neither the Company nor its Subsidiaries will 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 $500,000 in the aggregate following prior notice to and consultation with Parent;
(j) neither the Company nor any of its Subsidiaries will (A) incur 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 the Merger 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 transactions contemplated Person, other than to the Company or any Subsidiary of the Company or to officers and employees of the Company or any of its Subsidiaries for travel, business or relocation expenses in the ordinary course of business;
(k) neither the Company nor any of its Subsidiaries will make any capital expenditure or capital expenditures other than capital expenditures set forth in the operating budget of the Company dated August 15, 2000 previously delivered to Parent, other than expenditures in the ordinary course of business consistent with past practice which individually or in the aggregate do not exceed $500,000;
(l) neither the Company nor any of its Subsidiaries will, except as disclosed in Section 5.1 of the Disclosure Schedule, hire or terminate or amend the terms of the employment of any executive officer or other key employee;
(m) neither the Company nor any of its Subsidiaries will enter into or amend in any material respect any Material Contract or enter into any contract or agreement, 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;
(n) the Company will 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
(o) the Company will not take any action including, without limitation, the adoption of any stockholder rights plan or amendments to the Certificate of Incorporation, 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 this AgreementParent or Purchaser 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; and
(p) neither the Company nor any of its Subsidiaries will enter into an agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between The Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement and is terminated in accordance with Article VIII (such period being hereinafter referred to as the Effective Time“Interim Period”), except as otherwise contemplated expressly required by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law Agreement or unless Parent shall otherwise consent in writing (writing, which consent shall not be unreasonably withheld, delayed conditioned or conditioned)delayed, (A) the business each of the Company and its subsidiaries Subsidiaries: (i) shall be conducted conduct its business only in its the ordinary course of business business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and the Company (iii) shall use its commercially reasonable best efforts to preserve substantially intact its business organization, properties and material business assets, keep available the services of their officers, employees and consultants, maintain in effect all Company Material Contracts and preserve their relationships, (B) the Company shall perform its obligations under customers, licensees, suppliers and other Persons with which it has business relations. By way of amplification and not limitation, except as expressly permitted by this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries Subsidiaries shall, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent:
(i) amend or otherwise change its Certificate of Incorporation Incorporation, Bylaws or By-Laws other equivalent organizational documents, or any similar governing instrumentsotherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, deliversell, selltransfer, pledge, dispose of or encumber any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), interest of the Company or any of its subsidiaries Subsidiaries (except for (A) the issuance of shares of Company Common Shares upon Stock issuable pursuant to the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase repurchase or otherwise acquire acquire, directly or indirectly, any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees or interest in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets, except for sales of inventory and equipment in the Company’s subsidiariesordinary course of business;
(v) make declare, set aside or pay any acquisition of dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify any existing agreements with respect to any Company Intellectual Property;
(viii) acquire (by merger, consolidation or consolidation, acquisition of stock or substantially all of the assets), assets or make any investment in any interest in, otherwise) any corporation, partnership limited liability company, partnership, joint venture or other business organization or division thereof;
(viix) sell (A) issue any debt securities, (B) assume, guarantee or endorse or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose as an accommodation become responsible for the obligations of any assetsPerson, other than sales (C) make any loans, advance to any Person, (D) take any advance with respect to the Company’s existing line of credit with Commerce Bank (the “Line of Credit”) without providing notice to Parent or dispositions in (E) increase the ordinary course amount outstanding or the aggregate credit available under the Line of business or pursuant to existing ContractsCredit above $3,500,000;
(viix) other than 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, advances or enter into any financial commitments;
(xi) authorize any capital expenditures in excess of $100,000 in the aggregate;
(xii) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or amend in severance agreements with, its officers; (C) grant any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur severance or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed moneytermination pay to, or assumeenter into any employment or severance agreement with, guarantee or endorse, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
; (x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (CD) enter into any employment, consulting collective bargaining agreement; or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (DE) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other amounts to plan, trust, fund, policy or arrangement for the benefit of any officer of its directors, officers or employee other than as set forth in Section 3.24 of the Company Disclosure Scheduleemployees;
(xixiii) make any change in any accounting principlespolicies or procedures (including, except as may be appropriate without limitation, procedures with respect to conform to changes in reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect theretoGAAP;
(xiixiv) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xv) other than in the ordinary course of business or as required by applicable law, business: (A) enter into any Company Material Contract; (B) modify, amend, transfer or terminate any Company Material Contract or waive, release or assign any rights or claims thereto or thereunder; or (C) enter into or extend any lease with respect to real property;
(xvi) enter into any agreement, or amend the terms of any existing agreement, which grants to any Person exclusive supply, manufacturing, production, marketing or distribution rights with respect to any of its products or technologies;
(xvii) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigationfederal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xviii) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent that involve only the payment of non-material amounts of cash and do not involve any admission with past practicerespect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xviixix) materially change amend the terms of any outstanding options under the Company Stock Plan, except as may be necessary to conform to the terms of this Agreement;
(xx) except for insurance coverage that will terminate as a result of the transactions contemplated hereby, fail to maintain in full force and effect all insurance policies currently in effect, or permit any of its business the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xviiixxi) other than in fail to make any expenditures that are necessary and sufficient to maintain or, to the ordinary course of business extent budgeted or consistent with the past practicepractice of the Company and its Subsidiaries, enter into improve the conditions of the properties, facilities and equipment of the Company and its Subsidiaries, including, without limitation, budgeted expenditures relating to maintenance, repair and replacement;
(xxii) take any lease action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (as lessor or lessee); sell, abandon or make any other disposition of A) any of its assets, properties the representations and warranties of the Company set forth in Article III of this Agreement becoming untrue or businesses; grant or suffer any Lien on (B) any of its assets, properties or businessesthe conditions to the Closing set forth in Article VII of this Agreement not being satisfied as of the Closing Date; or
(xixxxiii) agree authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 5.01 Conduct of Business of by the Company Pending the Merger.
. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, (a) Between 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 in accordance in all material respects with all applicable laws, rules and regulations, and (b) the Company agrees (except to the extent that Parent shall otherwise consent in writing), to use all reasonable efforts consistent with past practices and policies to keep available the services of its present officers and key employees and consultants and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, to the end that its goodwill and ongoing businesses would be unimpaired, in any material respect, at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of the Company and shall notify Parent of any change in the operation of the Company’s business activities and of any governmental or third party complaints, investigations or proceedings if such complaint, change, investigation, or hearing would have, or would reasonably be expected to have, a Company Material Adverse Effect or would be material to any party’s ability to consummate the transactions contemplated by the Transaction Documents. By way of amplification and not limitation, except as contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule, the Company shall not, between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 do any of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise following without the prior written consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shallParent:
(ia) amend or otherwise change its Certificate of Incorporation or By-Laws or any similar governing instrumentsBylaws;
(iib) issue, deliver, sell, pledge, dispose of, grant, encumber, authorize or propose the issuance, sale, pledge, disposition, grant or encumbrance of or encumber any shares of its capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, stock or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instrumentsinterest), of the Company Company, except pursuant to the terms of options, warrants or any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards preferred stock outstanding as of on the date of this AgreementAgreement and except for grants of options to purchase up to 100,000 shares of Company Stock pursuant to the Stock Plan, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)past practices;
(iiic) sell, lease, license, pledge, grant, encumber or otherwise dispose of any of its properties or assets which are material, individually or in the aggregate, to its business, except in the ordinary course of business, consistent with past practice;
(d) 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 any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company)stock;
(ive) reclassifysplit, combine, split, subdivide, redeemredeem 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 capital stock, or purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock except from former employees, directors and consultants in accordance with agreements existing as of the Company (except date hereof providing for the acquisition repurchase of Common Shares tendered by optionees shares in connection with a cashless exercise any termination of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesservice by such party;
(vf) make any acquisition of acquire (whether including, without limitation, by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in ) any interest in, or any assets in any corporation, partnership or partnership, other business organization or any division thereof;
(vig) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assetsincur, other than sales to Parent or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practiceany Company Stockholders, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, 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, advances loans or advances;
(h) authorize any capital contributions to any other person (other than a subsidiary expenditure in excess of the Company)$100,000, in each casethe aggregate;
(i) enter into any lease or contract for the purchase or sale of any property, other than real or personal, except in the ordinary course of business business, consistent with past practice, pursuant to letters of credit or otherwise;
(xj) except increase, or agree to the extent required under any Employee Benefit Plan or as required by applicable lawincrease, (A) increase the compensation payable, or fringe benefits to become payable, to its directors, officers or employees or grant any bonuses to its officers, directors or employees, except for increases or grants in accordance with past practice in salaries or wages of its employees who are not its officers, or grant any severance or termination pay to, or enter into or modify any employment or severance agreement with, any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option (other than as expressly contemplated in Section 2.05 above), 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; provided, however, that the foregoing provisions of this subsection shall not apply to any amendments to employee benefit plans described in Section 3(3) of ERISA that may be required by Law;
(k) accelerate, amend or change the period of exercisability or the vesting schedule of restricted stock or Outstanding Company Options granted under any option plan, employee stock plan or other agreement or authorize cash payments in exchange for any Outstanding Company Options granted under any of such plans except for as specifically required by the terms of such plans or any such agreement or any related agreement in effect as of the date of this Agreement and disclosed in the Company Disclosure Schedule;
(l) extend any offers of employment to potential employees who would receive cash compensation at a rate of $100,000 per year or more or extend any consulting or independent contracting offers that are not cancelable on prior notice of 30 days or less; or
(m) amend or modify any Material Contract other than in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly amend or indirectly, take modify any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; Material Contract with MOVA or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this AgreementAbt Associates Clinical Trials/AACT).
Appears in 1 contract
Sources: Merger Agreement (Mgi Pharma Inc)
Conduct of Business Pending the Merger. Section 5.1 SECTION 5.01 Conduct of Business of by the Company Pending the Merger.
(a) Between Merger The Company agrees that, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date any other provision of this Agreement, Agreement or as set forth in Section 5.1 5.01 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing writing:
(which consent shall not be unreasonably withheld, delayed or conditioned), (Ai) the business businesses of the Company and its subsidiaries Subsidiaries shall be conducted in 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; and
(ii) the Company shall use its all reasonable best efforts to preserve substantially intact its the business organizationorganization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and material 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 relationships, relations. From the date of this Agreement until the earlier of (Bi) the Company shall perform its obligations under this Agreement, Effective Time and (Cii) without limiting the foregoingtermination of the Agreement, neither the Company nor any Subsidiary shall, directly or indirectly, do, or propose to do, any of its subsidiaries shallthe following without the prior written consent of Parent and except as otherwise expressly contemplated herein:
(ia) amend or otherwise change its Certificate of Incorporation or By-Laws laws or any similar governing instrumentsequivalent organizational documents;
(iib) issue, deliver, sell, pledge, dispose of of, grant or encumber encumber, or otherwise subject to any Lien, or authorize such issuance, sale, pledge, disposition, grant or encumbrance of, or subjection to, any such Lien, (i) any shares of any class of capital stock, ownership interests stock of the Company or voting securitiesany Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instrumentsinterest), of the Company or any of its subsidiaries Subsidiary (except for (A) the issuance of Common Shares upon issuable pursuant to employee stock options outstanding on the exercise date of Options or this Agreement and granted under Company Stock Option Plans in connection with other stock-based awards outstanding as of effect on the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, ) or (Bii) issuances any assets of the Company or any Subsidiary, except in accordance the ordinary course of business and in a manner consistent with the Rights Plan)past practice;
(iiic) 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 (stock, except for any dividend or distribution the declaration and payment of dividends by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company)Subsidiary solely to its parent corporation;
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options acquire, directly or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan)indirectly, or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesits capital stock;
(ve) make any acquisition of (whether i) acquire (including, without limitation, by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), assets or make any investment in any interest in, other business combination) any corporation, partnership or partnership, other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell any significant amount of assets; (ii) incur any indebtedness, whether secured or dispose of any assets, other than sales unsecured and whether under a new or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur facility (except borrowings from Parent or modify in Purchaser) or issue any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loansloans or advances; (iii) enter into any contract or agreement other than in the ordinary course of business and consistent with past practice; (iv) authorize, advances or make any commitment with respect to, any capital expenditure which is not specifically referred to in the capital expenditure budget attached hereto as Section 5.01(e) of the Company Disclosure Schedule (the "Company Capital Budget") or, to the extent not included in the Company Capital Budget, any single capital expenditure in excess of $10,000 or capital contributions expenditures in the aggregate in excess of $100,000; or (v) enter into or amend any contract, agreement, commitment or arrangement with respect to any other person matter set forth in this Section 5.01(e);
(f) (i) hire any additional employees except to fill current vacancies or vacancies arising after the date of this Agreement, (ii) make any offers to any employee of an employment position other than the employment position he or she currently holds, except for offers of an employment position made in the ordinary course of business and consistent with past practice in connection with the promotion or demotion of any employee of the Company or any of its Subsidiaries who is not a subsidiary director or officer of the Company, (iii) 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 of its Subsidiaries who are not directors or officers of the Company, (iv) grant any new or additional retention, severance or termination pay to, or enter into any new or additional employment, bonus, change of control or severance agreement with, any director, officer or other employee of the Company or of any of its Subsidiaries, (v) establish, adopt, enter into, terminate or amend any Plan or establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement for the benefit of any director, officer or employee except as required by this Agreement or the Transactions contemplated hereby, or as required by ERISA, the Code or to otherwise comply with applicable Law, (vi) loan or advance money or other property to any current or former director, officer or employee of the Company or any of its Subsidiaries, (vii) grant any equity or equity based awards (provided that equity awards may be transferred in accordance with the applicable plan document or agreement) or (viii) hire or engage any consultant to perform services for a rate of compensation which would be in excess of $25,000 on an annual basis or which is not terminable upon notice of 30 days or less;
(g) effectuate a "plant closing" or "mass layoff," as those terms are defined in WARN (determined without regard to terminations of employment occurring on or after the Effective Time);
(h) take any action, other than reasonable and usual actions in the ordinary course of business and consistent 30 with past practice and other than actions required to be taken in response to changes in GAAP or in Law, with respect to accounting policies or procedures;
(i) make, revoke or change any material Tax election or material method of Tax accounting, file any amended Tax Return (unless required by Law), enter into any closing agreement relating to a material amount of Taxes, settle or compromise any material liability with respect to Taxes or consent to any material claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment; provided, that in each casethe case of the filing of any amended Tax Return, the Company or the relevant Subsidiary shall deliver a copy of such amended Tax Return to Parent at least 30 days prior to filing for Parent's review and consent;
(j) 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 practice, unless such payment, discharge or satisfaction is made in accordance with the terms of such claim, liability or obligation as such terms exist on the date of this Agreement;
(k) pay accounts payable, utilize cash, draw down on lines of credit, delay or accelerate capital expenditures, incur expenditures on research and development, other than in the ordinary course of business and consistent with past practice;
(l) amend or modify in any material respect, 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;
(m) commence or settle any Action, other than the settlement of Actions involving payments by the Company or its Subsidiaries not to exceed $100,000 with respect to any individual Action or $250,000 in aggregate settlements;
(n) (i) abandon, sell, assign, or grant any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or IP Agreements, (ii) grant to any third party any license, sublicense or covenant not to sue with respect to any Owned Intellectual ▇▇▇perty or Licensed Intellectual Property, other than in the ordinary course of business consistent with past practice, pursuant (iii) develop, create or invent any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress as of the date hereof), (iv) disclose, or allow to letters be disclosed, any confidential Owned Intellectual Property, unless such Owned Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof, or (v) fail to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in each and every item of credit or otherwisethe Owned Intellectual Property and the Licensed Intellectual Property;
(xo) except fail to make in a timely manner any filings with the extent SEC required under any Employee Benefit Plan the Securities Act or as required by applicable law, the Exchange Act or the rules and regulations promulgated thereunder;
(A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (Cp) enter into any employment, consulting contract or severance agreement or arrangement with any of its present director or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary Subsidiary or any of their respective affiliates (including any immediate family member of such person) or any other affiliate of the Company other than the dissolution of or any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;Subsidiary; or
(xviq) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practiceannounce an intention, enter into any lease (as lessor formal or lessee); sellinformal agreement or otherwise make a commitment, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 5.01 Conduct of Business of by the Company Pending the Merger.
(a) Between . The Company agrees that, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date any other provision of this Agreement, Agreement or as set forth in Section 5.1 5.01 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing writing:
(which consent shall not be unreasonably withheld, delayed or conditioned), (Ai) the business businesses of the Company and its subsidiaries Subsidiaries shall be conducted in 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; and
(ii) the Company shall use its reasonable best efforts to preserve substantially intact its the business organization, and material business relationships, (B) organization of the Company shall perform its obligations under 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 expressly contemplated by any other provision of this Agreement, and (C) without limiting Agreement or as set forth in Section 5.01 of the foregoingCompany Disclosure Schedule, neither the Company nor any Subsidiary shall, between the date of its subsidiaries shallthis Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its Certificate of Incorporation or By-Laws laws or any similar governing instrumentsequivalent organizational documents;
(iib) issue, deliver, sell, pledge, dispose of of, grant or encumber encumber, or otherwise subject to any Lien, or authorize such issuance, sale, pledge, disposition, grant or encumbrance of, or subjection to, any such Lien, (i) any shares of any class of capital stock, ownership interests stock of the Company or voting securitiesany Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instrumentsinterest), of the Company or any of its subsidiaries Subsidiary (except for (A) the issuance of Common Shares issuable pursuant to employee stock options outstanding on the date of this Agreement and granted under Company Stock Options Plan in effect on the date of this Agreement or for Shares issuable upon the exercise of Options outstanding Warrants) or in connection with other stock-based awards outstanding as (ii) any assets of the date Company or any Subsidiary, except in the ordinary course of this Agreement, business and in each case, in accordance a manner consistent with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)past practice;
(iiic) 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 any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company)stock;
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options acquire, directly or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan)indirectly, or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesits capital stock;
(vi) make any acquisition of acquire (whether including, without limitation, by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), assets or make any investment in any interest in, other business combination) any corporation, partnership or partnership, other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell any significant amount of assets; (ii) incur any funded indebtedness or dispose of issue any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loansloans or advances; (iii) enter into any contract or agreement other than in the ordinary course of business and consistent with past practice; (iv) authorize, advances or make any commitment with respect to, any capital expenditure which is not specifically referred to in the capital expenditure budget attached hereto as Section 5.01(e) of the Company Disclosure Schedule (the "Company Capital Budget") or, to the extent not included in the Company Capital Budget, any single capital expenditure in excess of $250,000 or capital contributions expenditures in the aggregate in excess of $1,000,000; or (v) enter into or amend any contract, agreement, commitment or arrangement with respect to any other person matter set forth in this Section 5.01(e);
(i) hire any additional employees except to fill current vacancies or vacancies arising after the date of this Agreement, (ii) make any offers to any employee of an employment position other than the employment position he or she currently holds, except for offers of an employment position made in the ordinary course of business and consistent with past practice in connection with the promotion or demotion of any employee of the Company or any of its Subsidiaries who is not a subsidiary director or officer of the Company, (iii) 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 of its Subsidiaries who are not directors or officers of the Company, (iv) grant any new or additional retention, severance or termination pay to, or enter into any new or additional employment, bonus, change of control or severance agreement with, any director, officer or other employee of the Company or of any of its Subsidiaries, (v) establish, adopt, enter into, terminate or amend any Plan or establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement for the benefit of any director, officer or employee except as required by this Agreement or the Transactions contemplated hereby, or as required by ERISA, the Code or to otherwise comply with applicable Law, (vi) loan or advance money or other property to any current or former director, officer or employee of the Company or any of its Subsidiaries, (vii) grant any equity or equity based awards (provided that equity awards may be transferred in accordance with the applicable plan document or agreement) or (viii) hire or engage any consultant to perform services for a rate of compensation which would be in excess of $100,000 on an annual basis or which is not terminable upon notice of 30 days or less;
(g) effectuate a "plant closing" or "mass layoff," as those terms are defined in WARN (determined without regard to terminations of employment occurring on or after the Effective Time);
(h) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice and other than actions required to be taken in response to changes in GAAP or in Law, with respect to accounting policies or procedures;
(i) make, revoke or change any material Tax election or material method of Tax accounting, file any amended Tax Return (unless required by Law), enter into any closing agreement relating to a material amount of Taxes, settle or compromise any material liability with respect to Taxes or consent to any material claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment; provided, that in each casethe case of the filing of any amended Tax Return, the Company or the relevant Subsidiary shall deliver a copy of such amended Tax Return to Parent at least 30 days prior to filing for Parent's review and consent;
(j) pay, discharge or satisfy any material claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than in the ordinary course of business and consistent with past practice, unless such payment, discharge or satisfaction is made in accordance with the terms of such claim, liability or obligation as such terms exist on the date of this Agreement;
(k) pay accounts payable, utilize cash, draw down on lines of credit, delay or accelerate capital expenditures, incur expenditures on research and development, other than in the ordinary course of business and consistent with past practice;
(l) amend or modify in any material respect, 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;
(m) commence or settle any Action, other than the settlement of Actions involving payments by the Company or its Subsidiaries not to exceed, with respect to any individual Action, $1,000,000;
(i) abandon, sell, assign, or grant any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or IP Agreements, (ii) grant to any third party any license, sublicense or covenant not to ▇▇▇ with respect to any Owned Intellectual Property or Licensed Intellectual Property, other than in the ordinary course of business consistent with past practice, pursuant (iii) develop, create or invent any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress as of the date hereof), (iv) disclose, or allow to letters be disclosed, any confidential Owned Intellectual Property, unless such Owned Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof, or (v) fail to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in each and every item of credit or otherwisethe Owned Intellectual Property and the Licensed Intellectual Property;
(xo) except fail to make in a timely manner any filings with the extent SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(p) enter into any Employee Benefit Plan contract or as required by applicable law, (A) increase agreement with any director or officer of the compensation Company or fringe benefits of any Subsidiary or any of its directors, officers their respective affiliates (including any immediate family member of such person) or employees any other affiliate of the Company or any Subsidiary;
(except q) change any of the material terms pursuant to which products of the Company or any Subsidiary are generally sold other than negotiation of individual contracts or purchase orders in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;business; or
(xir) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practiceannounce an intention, enter into any lease (as lessor formal or lessee); sellinformal agreement or otherwise make a commitment, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 .1 Conduct of Business of by the Company Pending the Merger.
(a) Between . The Company ----------------------------------------------------- covenants and agrees that, between the date of this Agreement hereof and the Effective Time, except as otherwise contemplated expressly required or permitted by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law Agreement or unless Parent shall otherwise consent agree in writing (which consent in advance, the Company shall not conduct and shall cause the businesses of each of its Subsidiaries to be unreasonably withheldconducted only in, delayed or conditioned), (A) the business of and the Company and its subsidiaries Subsidiaries shall be conducted in its not take any action except in, the ordinary course of business and the in a manner consistent with past practice and in compliance with applicable Laws. The Company shall use its reasonable best efforts to preserve substantially intact the business organization and assets of the Company and each of its business organizationSubsidiaries, and material business relationshipsto keep available the services of the present officers, (B) employees and consultants of the Company shall perform and each of its obligations under this AgreementSubsidiaries, to maintain in effect its Contracts and (C) without limiting to preserve the foregoingpresent relationships of the Company and each of its Subsidiaries with advertisers, sponsors, customers, licensees, suppliers and other Persons with which the Company or any of its Subsidiaries has business relations. By way of amplification and not limitation, neither the Company nor any of its subsidiaries Subsidiaries shall, between the date hereof and the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its the Certificate of Incorporation or By-Laws Bylaws or equivalent organizational document of the Company or any similar governing instrumentsof its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of the Company or any of its Subsidiaries;
(iib) issue, delivergrant, sell, transfer, deliver, pledge, promise, dispose of or encumber encumber, or authorize the issuance, grant, sale, transfer, deliverance, pledge, promise, disposition or encumbrance of, any shares of capital stock, ownership interests stock of any class (common or voting securitiespreferred), or any options, options (other than stock options under the 1999 Stock Option Plan granted to new employees consistent with past practice in order to continue the employee recruitment efforts of the Company as mutually and reasonably determined by Parent and the Company) warrants, convertible or exchangeable securities or other rights of any kind to acquire or receive any shares of capital stock, stock or any other ownership interests interest or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), Stock-Based Rights of the Company or any of its subsidiaries Subsidiaries (except for (A) the issuance of Company Common Shares upon Stock issuable pursuant to the exercise of Options Outstanding Employee Options); adopt, ratify or in connection with other stock-based awards outstanding as effectuate a stockholders' rights plan or agreement; or redeem, purchase or otherwise acquire, directly or indirectly, any of the date capital stock of this Agreement, the Company or interest in each case, in accordance with the terms or securities of any Subsidiary (except for the repurchase of a stockholder's Company Common Stock upon termination of such stockholder's status as an employee or consultant pursuant to existing repurchase agreements and the Option Plan, or (B) issuances in accordance with the Rights PlanPlans);
(iiic) declare, set aside, make aside or pay any dividend or other distribution, payable distribution (whether in cash, stock, stock or property or otherwise, with any combination thereof) in respect to of any of its capital stock (except for any dividend or distribution by that a subsidiary wholly owned Subsidiary of the Company may declare and pay a dividend to its parent); split, combine or reclassify any of its capital stock, or issue or authorize the Company issuance of any other securities in respect of, in lieu of or another wholly owned subsidiary in substitution for, shares of its capital stock; or amend the terms of, repurchase, redeem or otherwise acquire, or permit any Subsidiary to repurchase, redeem or otherwise acquire, any of its securities or any securities of its Subsidiaries; or propose to do any of the Company)foregoing;
(ivd) reclassifysell, combinetransfer, splitdeliver, subdividelease, redeemlicense, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan)sublicense, or reclassifymortgage, combinepledge, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell encumber or otherwise dispose of (whether in whole or in part), or create, incur, assume or subject any Lien on, any of the assets of the Company or any of its Subsidiaries (including any Intellectual Property), except for the sale of goods, licenses of Intellectual Property involving annual revenue, payments or liabilities of less than $100,000 or having a term of less than one year, and dispositions of other immaterial assets, in any case, in the ordinary course of business and in a manner consistent with past practice;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company of any of its Subsidiaries (other than the Merger);
(f) acquire (by merger, consolidation or disposition consolidation, acquisition of stock or assets or otherwise) or organize any corporation, partnership limited liability company, partnership, joint venture, trust or other entity or any business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, thereof; incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or any warrants or rights to acquire any debt security or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personPerson, or make any loans, advances or enter into any financial commitments; or authorize or make any capital contributions expenditures which are, in the aggregate, in excess of $1,000,000 for the Company and its Subsidiaries taken as a whole;
(g) hire or terminate any employee or consultant, except in the ordinary course of business consistent with past practice; increase the compensation or fringe benefits (including, without limitation, bonus) payable or to any other person (other than a subsidiary become payable to its officers or employees, except for increases in salary or wages of employees of the Company), in each case, other than Company or its Subsidiaries who are not officers of the Company in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under loan or advance any Employee Benefit Plan money or as required by applicable lawother asset or property to, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any bonus, severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting employment or severance agreement with, any director, officer or arrangement with other employee of the Company or any of its present Subsidiaries, or establish, adopt, enter into, terminate or amend any Employee Plan or any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, stock purchase, 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 other employees, except for offers provided that nothing in this Section 4.1(g) shall restrict the ability of employment in the ordinary course Company's Board of business and consistent Directors to adopt appropriate resolutions, with past practice with employees respect to persons who are not officers or directors of the Company, to cause the transactions relating to the Merger that may be considered dispositions under Section 16 of the Exchange Act for such persons to be exempt from such Section;
(h) change any accounting policies or officersprocedures (including procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable) unless required by a change in Law or GAAP used by it;
(Di) establish, adopt, enter into or amend revalue in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, including without limitation, any write-limitation writing down of the value of any assets inventory or any write-writing off of notes or accounts receivable, other than in the ordinary course of business consistent with past practicebusiness;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 6.01. Conduct of Business of by the Company Pending the Merger.
(a) Between . During the period from the date of this Agreement and continuing until the earlier to occur of the termination of this Agreement or the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedulecovenants and agrees that, as required by law or unless Parent shall otherwise consent agree in writing (which consent and unless otherwise expressly permitted hereunder, the Company shall conduct its business and shall cause the businesses of its subsidiaries to be conducted, and the Company and its subsidiaries shall not be unreasonably withheldtake any action except, delayed or conditioned), (A) in the ordinary course of business and in a manner consistent with past practice; and the Company shall use 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 shall be conducted in its ordinary course of business with customers, suppliers and other persons with which the Company shall use or any of its reasonable best efforts to preserve substantially intact its subsidiaries has significant business organization, relations. By way of amplification and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoingnot limitation, neither the Company nor any of its subsidiaries shall, during the period from the date of this Agreement and continuing until the earlier to occur of the termination of this Agreement or the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent, unless otherwise expressly permitted hereunder:
(ia) amend or otherwise change the Company's or any of its Certificate subsidiaries' Articles of Incorporation or By-Laws Laws, or any similar governing instrumentsother equivalent organizational documents;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests interest (including, without limitation, any phantom interest) of the Company, any of its subsidiaries or affiliates (except for the issuance of Shares pursuant to the exercise of Options under the Stock Option Plans, which Options are outstanding on the date hereof);
(c) sell, pledge, dispose of or encumber any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), assets of the Company or any of its subsidiaries (except for (Ai) sales of assets in the issuance ordinary course of Common Shares upon the exercise business and in a manner consistent with past practice and (ii) dispositions of Options obsolete or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Planworthless assets);
(iiid) amend or change the period (or permit any acceleration, amendment or change) of exercisability of Options granted under the Stock Option Plans or the Stock Purchase Plan or other than as expressly provided in Section 7.03(b), authorize cash payments in exchange for any such Options;
(e) (i) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a wholly owned subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or otherwise, with respect to reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (except for iii) amend the terms of, repurchase, redeem or otherwise acquire, or permit any dividend subsidiary to repurchase, redeem or distribution by a subsidiary otherwise acquire, any of its securities or any securities of its subsidiaries, or propose to do any of the Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ivf) reclassifysell, combinetransfer, splitlicense, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell sublicense or otherwise dispose of any material Company Intellectual Property (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into ) or amend in or modify any existing agreements with respect to any material respect any ContractCompany Intellectual Property or third party Intellectual Property rights;
(viiii) authorize acquire (by merger, consolidation or acquisition of stock or assets) any material new capital expenditures which arecorporation, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
partnership or other business organization or division thereof; (ixii) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, loans or advances except to employees in the ordinary course consistent with past practice; (iii) enter into or capital contributions to amend any other person (other than a subsidiary of the Company), in each case, contract or agreement other than in the ordinary course of business consistent with past practicebusiness; (iv) authorize or make any capital expenditures or purchases of fixed assets that are not currently budgeted and that in the aggregate, pursuant exceeds $500,000 (v) terminate any Material Contract or amend any of its material terms (other than amendments to letters existing credit arrangements designed to remedy defaults thereunder); or (vi) enter into or amend any contract, agreement, commitment or arrangement to effect any of credit or otherwisethe matters prohibited by this Section 6.01(g);
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Ah) increase the compensation payable or fringe benefits of any of to become payable to its directorsemployees, officers or employees (except in the ordinary course of business with respect to employees who are not officers, directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting employment or severance agreement with any employee, director or arrangement with officer of the Company or any of its present subsidiaries or former directorsestablish, officers adopt, enter into, terminate, or amend any Employee Plan (except as may otherwise be required by applicable law);
(i) take any action, other employeesthan as required by GAAP, to change accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable);
(j) make any material Tax election inconsistent with past practice or settle or compromise any material Tax liability, except to the extent the amount of any such settlement or compromise has been reserved for offers of employment on the consolidated financial statements contained in the Company SEC Reports, or would not have a Company Material Adverse Effect;
(k) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into or amend reserved against in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 the financial statements of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return and consistent with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refundpast practice;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvil) except as may be required by generally accepted accounting principleslaw, revalue take any portion of its assets, properties action to terminate or businesses including, without limitation, amend any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practiceEmployee Plan;
(xviim) materially change permit any material increase in the number of employees of the Company or any of its business policies;
(xviii) other than in subsidiaries employed by the ordinary course of business consistent with past practice, enter into any lease (as lessor Company or lessee); sell, abandon or make any other disposition of any of its assetssubsidiaries, properties or businesses; grant or suffer any Lien as the case may be, on any of its assets, properties or businessesthe date hereof; or
(xixn) take or fail to take, or agree in writing or otherwise to take or fail to take, any of the actions described in Section 5.1(a)(i6.01(a) through Section 5.1(a)(xviii).
(bm) Between above, or any action which would make any of the date representations or warranties of the Company contained in this Agreement and the Effective Time, untrue or incorrect or prevent the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, from performing or cause the Company shall not, and shall cause each not to perform its covenants hereunder or result in any of is subsidiaries not to, directly or indirectly, take any action (i) the conditions to cause its representations and warranties the Merger set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreementherein not being satisfied.
Appears in 1 contract
Sources: Merger Agreement (Alcatel)
Conduct of Business Pending the Merger. Section SECTION 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between the date of this Agreement . The Company covenants and the Effective Timeagrees that, except as otherwise contemplated expressly permitted by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, Agreement or as set forth in Section 5.1 of the Company Disclosure ScheduleLetter, until the Effective Time, unless the Parent shall otherwise agree in writing prior to the taking of any action otherwise prohibited by the terms of this Section 5.1, the Company shall, and shall cause each Company Subsidiary to, conduct its operations and business in the ordinary and usual course of business and consistent with past practice and, to the extent consistent therewith, with no less diligence and effort than would be applied in the absence of this Agreement, seek to preserve intact its business organizations' goodwill, keep available the services of its present officers and key employees, and preserve the goodwill and business relationships with suppliers, distributors, customers and others having business relationships with it, with the intent that such goodwill and ongoing business relationships shall be unimpaired in all material respects at the Effective Time. The Company agrees that it will maintain its cash management policies in effect on the date hereof in the ordinary course of business consistent with past practice and that it will continue to maintain insurance of the types and in the amounts in effect on the date hereof as long as such insurance is available to the Company on commercially reasonable terms, including at comparable rates. Without limiting the generality of the foregoing, and except as otherwise expressly permitted by this Agreement or as set forth in Section 5.1 of the Company Disclosure Letter, prior to the Effective Time, without the prior written consent of the Parent, the Company will not, and will cause each Company Subsidiary not to:
(a) except to the extent required by Law or the rules and regulations of the NYSE, amend or otherwise change the certificate of incorporation or bylaws of the Company;
(b) issue or authorize or propose the issuance of, sell, pledge or dispose of, grant or otherwise create, or agree to issue or authorize or propose the issuance, sale, pledge or disposition of, grant or otherwise create any additional shares of, or any options to acquire any shares of, its capital stock or any debt or equity securities convertible into or exchangeable for such capital stock or, except as otherwise agreed to by Parent or except pursuant to their terms in effect on the date hereof, accelerate the vesting schedule of or make any other modification to the terms of any Company Stock Option outstanding on the date thereof, other than (i) any such issuance pursuant to the exercise of Company Stock Options granted prior to the date hereof under the Company Option Plans or the agreements pursuant to which certain Company Stock Options were issued, in accordance with their respective terms as in effect on the date hereof, (ii) the issuance of shares of capital stock of a Company Subsidiary to the Company or any wholly owned Company Subsidiary, (iii) the issuance in the ordinary course of business consistent with past practice to persons other than directors or executive officers of the Company of Options to purchase in the aggregate up to 75,000 shares of Company Common Stock pursuant to the Company Option Plans as in effect on the date hereof or (iv) the issuance of shares of Company Common Stock in connection with acquisitions permitted by Section 5.1(h);
(c) purchase, redeem or otherwise acquire or retire, or offer to purchase, redeem or otherwise acquire or retire, (i) any shares of its capital stock (including any Options with respect to its capital stock and any security convertible or exchangeable into its capital stock), other than transactions between the Company and its wholly owned Subsidiaries, or (ii) any long-term debt;
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to, any of its capital stock, except dividends declared and paid by a wholly owned Company Subsidiary or subdivide, reclassify, recapitalize, split, combine or exchange any of its shares of capital stock;
(e) incur or become contingently liable with respect to any indebtedness for borrowed money or guarantee any such indebtedness or issue any debt securities;
(f) except as may be required by applicable Law, or as contemplated by this Agreement, (i) increase the compensation payable or to become payable to, or enter into any employment agreement with any of its executive officers or employees, except, with respect to any such executive officer in accordance with the terms of any such agreement, or with respect to any other employees in the ordinary course of business consistent with past practice; (ii) grant any severance or termination pay to any employee (other than an executive officer) of the Company or any Company Subsidiary, except in the ordinary course of business or pursuant to practices listed in Section 3.11 of the Company Disclosure Letter or to any executive officer or director, except as provided in any agreement with such executive officer or director; (iii) enter into any severance agreement with any employee (other than an executive officer), except in the ordinary course of business or pursuant to practices listed in Section 3.11 of the Company Disclosure Letter or with any executive officer or director, except as provided in any agreement with such executive officer or director; or (iv) establish, adopt, enter into, terminate, withdraw from or amend or take action to accelerate any rights or benefits under any collective bargaining agreement, any stock option plan, any employee benefit plan, parachute arrangement or policy;
(g) take any action, including making any change in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including Tax accounting policies, procedures and elections relating to Taxes), except as may be required by GAAP, or settle any material Audit or, except as required by law Law, amend in any material respect any material Tax Return; PROVIDED, that, in any such case the Company shall consult with Parent prior to taking any such action that it reasonably believes is required by GAAP or unless Parent shall applicable Law;
(h) 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 entity, involving purchase prices for all transactions that, in the aggregate, are in excess of $10.0 million;
(i) mortgage or otherwise consent encumber or subject to any Lien, or sell, lease, license, transfer or otherwise dispose of, any of its properties or assets, other than encumbrances and Liens that are incurred in writing the ordinary course of business and consistent with past practice and sales, leases, licenses, transfers and dispositions of properties and assets in the ordinary course of business and consistent with past practice;
(i) extend or otherwise amend or waive any rights under any Material Distribution Agreement or (ii) extend or otherwise amend on terms less favorable to the Company or waive any rights under any Contract if, but only with respect to this clause (ii), such extensions or amendments, individually or in the aggregate, would be or would reasonably be expected to be materially adverse to the business of the Company and the Company Subsidiaries taken as a whole;
(k) take any action that would reasonably be expected to result in the conditions contained in Section 7.2(a) or 7.2(b) not to be satisfied;
(l) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiaries (other than the Merger);
(m) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Company Subsidiary;
(n) except as set forth in Section 5.1 of the Company Disclosure Letter, authorize any new development, production or distribution projects or capital expenditures or similar expenditures which, individually, is in excess of $50,000 or, in the aggregate, are in excess of $1,000,000;
(i) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) other than in the ordinary course of business consistent with past practices, or (ii) waive the benefits of, or agree to modify in any manner any confidentiality, standstill or similar agreement to which consent shall the Company or any Company Subsidiary is a party with any third party which relates to the Company Common Stock or a transaction having effects substantially similar to the Merger;
(p) settle or compromise any pending or threatened suit, action or claim relating to the Transactions contemplated hereby, without Parent's prior written consent, which will not be unreasonably withheld, delayed or conditioned), ;
(Aq) the business of enter into any agreement or arrangement that materially limits or otherwise restricts the Company or any Company Subsidiary or any successor thereto, or that would, after the Effective Time, limit or restrict the Surviving Corporation and its subsidiaries shall be conducted affiliates (including Parent) or any successor thereto, from engaging or competing in its any line of business or in any geographic area, other than in the ordinary course of business and consistent with past practices;
(r) make any loan to or other investment in any person which, in the Company shall use its reasonable best efforts aggregate, is in excess of $500,000; or
(s) authorize any of, or commit or agree to preserve substantially intact its business organizationtake any of, the foregoing actions.
SECTION 5.2 Conduct of Business of the Parent Pending the Merger. Prior to the Effective Time, without the prior written consent of the Company, the Parent will not, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shallwill cause each Parent Subsidiary not to:
(ia) except to the extent required by Law or the rules and regulations of NYSE, amend its certificate of incorporation or otherwise change its Certificate bylaws in any manner that would be materially adverse to the holders of Incorporation or By-Laws or any similar governing instrumentsParent Common Stock;
(iib) issuepurchase, deliverredeem or otherwise acquire or retire, sellor offer to purchase, pledgeredeem or otherwise acquire or retire, dispose any shares of or encumber its capital stock (other than any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights stock of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), Parent Subsidiary) in excess of the Company or any of its subsidiaries (publicly announced Parent Common Stock repurchase program currently in effect, except for (A) other transactions between the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)Parent and its wholly owned Subsidiaries;
(iiic) 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 any dividend stock, other than dividends or distribution distributions by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company)Parent Subsidiaries;
(ivd) reclassify, combine, split, subdivide, redeem, purchase liquidate or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution except for liquidations of any inactive subsidiary of the Company mutually agreed to by the Company and the Parentwholly owned Parent Subsidiaries;
(xvie) except as may take any action that would reasonably be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than expected to result in the ordinary course of business consistent with past practice;
(xviiconditions contained in Section 7.3(a) materially change any of its business policies;
(xviiior 7.3(b) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businessesnot to be satisfied; or
(xixf) authorize any of, or commit or agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Timeof, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchangeforegoing actions.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 5.01 Conduct of Business by the Company and Parent Pending the Merger. Each of the Company, Parent and Merger Sub covenant and agree that, until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, except as expressly contemplated by this Agreement, as set forth in Section 5.01 of Company Disclosure Schedule and Section 5.01 of Parent Disclosure Schedule or otherwise consented to in writing by the parties hereto (such consent not to be unreasonably withheld), the businesses of the Company Pending and Parent and their respective Subsidiaries shall, in all material respects, be conducted only in, and the Merger.
(a) Between Company and Parent and their respective Subsidiaries shall not take any material action except in the ordinary course of business of the normal day to day operations and in a manner consistent with past practice. The Company and Parent shall promptly notify each other in writing of any circumstance or development that is or could, individually or in the aggregate, reasonably be expected to constitute a Company Material Adverse Effect or a Parent Material Adverse Effect, as applicable, and the Company and Parent shall cause each of their Subsidiaries, to use its reasonable best efforts to preserve intact its business organization and assets and properties, keep available the services of its and its Subsidiaries’ current officers, employees and consultants, and to preserve its and its Subsidiaries’ present relationships with customers, suppliers and other persons with which it or any of its Subsidiaries has business relations, in each instance in the ordinary course of business and in a manner consistent with past practice. By way of amplification and not limitation, except as expressly contemplated by any other provision of this Agreement, neither the Company nor Parent nor any of their respective Subsidiaries shall, between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior directly or indirectly do or propose to the date of this Agreement, as set forth in Section 5.1 do any of the Company Disclosure Schedulefollowing without the prior written consent of the other, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed withheld or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shalldelayed:
(ia) amend or otherwise change its Certificate Articles of Incorporation Incorporation, Bylaws or By-Laws or any other similar governing instrumentsorganizational documents;
(iib) issue, deliver, sell, pledge, dispose of, grant, encumber, or otherwise subject to any Lien, or authorize such issuance, sale, pledge, disposition, grant or encumbrance of or encumber subjection to such Lien, (i) any shares of any class of capital stock, ownership interests stock of the Company or voting securitiesParent or any Subsidiary of either of them, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, or any other ownership interests or any voting securities interest (including but not limited to stock appreciation rightsany phantom interest), phantom stock of either of them or similar instrumentsof any Subsidiary; or (ii), any assets, tangible or intangible, of the Company or the Parent or any of its subsidiaries (Subsidiaries, except for (A) the issuance of Common Shares upon the exercise of Options options, covenants or in connection with other stock-based awards similar rights outstanding as of the date of this Agreement, in each case, Agreement and in accordance with the terms of any Company Stock Option Plansuch options, warrants or (B) issuances other similar rights in accordance with effect on the Rights Plan)date of this Agreement;
(iiic) 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 any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company)stock;
(ivd) reclassify, consolidate, exchange, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire acquire, directly or indirectly, any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any its capital stock or other ownership interests issue or authorize the issuance of any other securities in lieu of the Company’s subsidiariesor in substitution for any of its equity securities;
(ve) make any acquisition of (whether i) acquire (including by merger, consolidation amalgamation, consolidation, or acquisition of stock or substantially all of the assets), assets or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwisecombination) any corporation, partnership or partnership, other business organization (or any division thereof thereof) or otherwise sell any property or dispose of any assetsasset, other than sales except assets (including assets or dispositions accounts from suppliers, vendors or dealers) in the ordinary course of business and in a manner consistent with past practice; (ii) authorize, or pursuant to existing Contracts;
(vii) make any commitment with respect to, any capital expenditure, other than maintenance expenditures in the ordinary course of business and consistent with past practice; (iii) enter into any new line of business; or (iv) make investments in persons other than existing Subsidiaries;
(f) (i) increase the compensation payable or to become payable or the benefits provided to its current or former directors, officers or employees, (ii) grant any retention, severance or termination pay (other than pursuant to the severance policy as in effect on the date hereof) to, or enter into any employment, bonus, change of control or severance agreement with, any current or former director, officer or other employee of it or of any Subsidiary; (iii) establish, adopt, enter into, terminate or amend or take any action to accelerate (other than in the case of Parent, the acceleration of all outstanding options of Parent as disclosed at Section 5.01(f) of Parent Disclosure Schedule) any rights or benefits of any collective bargaining, bonus, profit sharing, trust, compensation, 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 except as required by Law; (iv) loan or advance any money or other property to any current or former director, officer or employee; or (v) enter into any new employment arrangements with any senior or executive officer;
(g) make any material change (or file for such change) in any method of financial or Tax accounting, policies, principles, methods, or practices (including adopting any new accounting policies, principles, methods, or practices) except insofar as may be required by a change in GAAP (with respect to the Company and its Subsidiaries) or Canadian GAAP (with respect to Parent and its Subsidiaries) or applicable Law;
(h) make, change or rescind any material Tax election, file any amended Tax Return, except as described in Section 3.13(a) and as required by applicable Law, enter into any closing agreement relating to Taxes, waive or amend extend the statute of limitations in respect of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business) or settle or compromise any material respect Canada or United States federal, provincial, state or local income Tax liability, audit, claim or assessment, or surrender any Contractright to claim for a Tax Refund;
(viiii) authorize pay, settle, discharge or satisfy any material new capital expenditures which areclaims, liabilities, litigation, lawsuits, arbitration, proceedings or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the aggregate, ordinary course of business and substantially consistent with past practice of liabilities reflected or reserved against in excess the financial statements of Parent or the Company’s capital expenditure budget set forth on Section 3.8 , as appropriate, or incurred after the date hereof in the ordinary course of the Company Disclosure Schedulebusiness and in a manner consistent with past practice;
(ixj) except for borrowings under the Company’s fail to maintain in full force and effect its existing credit facilitiesinsurance policies covering its respective properties, incur assets and businesses;
(k) enter into, amend, modify, terminate or modify in any material respect in an manner adverse consent to the Company the terms termination of any indebtedness for borrowed moneyContract that would be material to its business;
(l) repurchase, extend, renew, repay or incur any Indebtedness (other than in connection with letters of credit in the ordinary course of business) 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 loansloans or advances, advances or capital contributions to grant any other person (other than a subsidiary of the Company), security interest in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employeesassets, except for offers repayments of employment Indebtedness, in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;practice; or
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xvm) adopt a plan of liquidation or resolutions resolution providing for the liquidationliquidation or dissolution of the Company, dissolutionParent or any of their respective Subsidiaries, mergeras applicable;
(n) except as listed in Section 5.01(n) of the Parent Disclosure Schedule, consolidation sell, pledge, lease, exclusively license, transfer, dispose of or other reorganization encumber any assets;
(o) waive, release, grant or transfer any claims or rights of material value;
(p) except as listed in Section 5.01(p) of the Company or any subsidiary Disclosure Schedule and Section 5.01(p) of the Company other than Parent Disclosure Schedule, expend or commit to expend any amounts in excess of $100,000 without the dissolution of any inactive subsidiary prior written approval of the Company mutually agreed to by Parent or the Company and the ParentCompany, as applicable;
(xviq) except as may be required by generally accepted accounting principles, revalue enter into or modify any portion Material Contract or series of its assets, properties Contracts resulting in a new Material Contract or businesses including, without limitation, any write-down series of related new Material Contracts or modifications to an existing Material Contract or series of related existing Material Contracts outside of the value of any assets ordinary course, that would alone or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practiceaggregate, be reasonably expected to have a Company Material Adverse Effect or Parent Material Adverse Effect;
(xviir) materially change any of its business policies;
(xviii) other than agree, in the ordinary course of business consistent with past practicewriting or otherwise, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the foregoing actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth which would make any representation or warranty contained in ARTICLE Articles III to be or IV hereof, as appropriate, untrue or incorrect in any material respect; or
(s) issue any press release or (ii) that wouldotherwise make public statements with respect to this Agreement, the Arrangement or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions any Transaction contemplated by this AgreementAgreement without the consent of the other party (which consent shall not be unreasonably withheld or delayed) and Parent shall not make any filing with any Governmental Authority with respect thereto without prior consultation with the Company and the Company shall not make any filing with any Governmental Authority with respect thereto without prior consultation with Parent; provided, however, that the foregoing shall be subject to each party’s overriding obligation to make any disclosure or filing required under applicable Laws, and in accordance therewith, and the party making such disclosure shall use all commercially reasonable efforts to give prior oral or written notice to the other party and reasonable opportunity to review or comment on the disclosure or filing and the party making such disclosure shall give reasonable consideration to any comments made by the other party or its counsel, and if such prior notice is not possible, to give such notice immediately following the making of such disclosure or filing.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of by the Company Pending the Merger.
(a) Between the date of this Agreement and . Prior to the Effective Time, except as unless Parent shall otherwise contemplated by this Agreementagree in writing (which agreement shall not be unreasonably withheld), as disclosed in the SEC Reports filed prior to the date of this Agreement, or as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company shall conduct, and cause each of its subsidiaries shall be conducted Subsidiaries to conduct, its business only in its the ordinary and usual course of business consistent with past practice, and the Company shall use use, and cause each of its Subsidiaries to use, its reasonable best efforts to preserve substantially intact its the present business organization, keep available the services of its present officers and material key employees, and preserve their existing business relationships. Without limiting the generality of the foregoing, unless Parent shall otherwise agree in writing (B) which agreement shall not be unreasonably withheld), or as set forth in Section 5.1 of the Company Disclosure Schedule, prior to the Effective Time the Company shall perform its obligations under this Agreementnot, and (C) without limiting the foregoing, neither the Company nor shall it permit any of its subsidiaries shallSubsidiaries to:
(a) (i) amend or otherwise change its Certificate of Incorporation or Incorporation, as amended, By-Laws or any similar governing instruments;
other organizational documents, (ii) issuesplit, deliver, sell, pledge, dispose of combine or encumber reclassify any shares of its outstanding capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declare, set aside, make aside or pay any dividend or other distribution, distribution payable in cash, stockstock or property (other than regular quarterly dividends with record dates and payment dates substantially consistent with past practice of not more than $.02 per share of Class A Common Stock and $.0167 per share of Class B Common Stock (it being the express understanding of Parent and the Company that the share holders of the Company shall be entitled to either a dividend on the Shares or on the shares of Parent Common Stock, property or otherwisebut not both, with respect to any for the quarter in which the Closing shall occur, and the Board of its capital stock (except for Directors of the Company shall not declare any dividend or distribution by a subsidiary of the Company to the Company fix any record therefor which would have such effect)), or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase directly or indirectly redeem or otherwise acquire any shares of its capital stock or shares of the capital stock of the Company any of its Subsidiaries;
(b) authorize for issuance, issue (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with upon the exercise of Options outstanding stock options or the lapse of restrictions in respect of Restricted Shares warrants) or sell or agree to issue or sell any shares of, or rights to acquire or convertible into any shares of, its capital stock (other than pursuant to the terms of a Company the Company's Employee Stock Option Purchase Plan), as amended in accordance with Section 6.14 hereof) or reclassify, combine, split or subdivide any shares of the capital stock or other ownership interests of any of its Subsidiaries (whether through the Company’s subsidiariesissuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise);
(vc) make any acquisition of (whether by mergeri) merge, consolidation combine or acquisition of stock consolidate with another entity, (ii) acquire or substantially all purchase an equity interest in or a substantial portion of the assets), or make any investment in any interest in, any assets of another corporation, partnership or other business organization or division thereof;
otherwise acquire any assets outside the ordinary course of business and consistent with past practice or otherwise enter into any material contract, commitment or transaction outside the ordinary course of business and consistent with past practice or (viiii) sell sell, lease, license, waive, release, transfer, encumber or otherwise dispose of any of its material assets outside the ordinary course of business and consistent with past practice;
(whether by mergerd) (i) incur, consolidation assume or disposition of stock prepay any indebtedness, obligations or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, liabilities other than sales or dispositions in each case in the ordinary course of business and consistent with past practice, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person other than a Subsidiary of the Company, in each case other than in the ordinary course of business and consistent with past practice or (iii) make any loans, advances or capital contributions to, or investments in, any other person, other than to any Subsidiary of the Company;
(e) 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 practice or pursuant to existing Contractsmandatory terms of any Company Contract in effect on the date hereof;
(viif) modify or amend, or waive any benefit of, any non-competition agreement to which the Company or any of its Subsidiaries is a party;
(g) authorize or make capital expenditures in excess of $200,000 individually, or in excess of $1,000,000 in the aggregate except for those projects currently in progress as set forth in Section 5.1(g) of the Company Disclosure Schedule;
(h) permit any insurance policy naming the Company or any Subsidiary of the Company as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business;
(i) (i) adopt, enter into, terminate or amend (except as may be required by Applicable Law) any employee plan, agreement, contract, arrangement or other Company Plan, including the Company's Employee Stock Purchase Plan, for the current or future benefit or welfare of any director, officer or employee, (ii) except in the ordinary course of business consistent with past practice, enter into or amend increase in any material respect manner the compensation or fringe benefits of, or pay any Contract;
(viiibonus to, any director, officer or employee; provided, however, that no such increase or payment shall be made to or for the benefit of any person listed in Section 5.1(i) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule, or (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;
(ixj) except for borrowings under the Company’s existing credit facilities, incur or modify in make any material respect change in an manner adverse to the Company the terms of any indebtedness for borrowed moneyits accounting or tax policies or procedures, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, Applicable Law or to comply with GAAP; or
(A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (Ck) enter into any employmentcontract, consulting or severance agreement agreement, commitment or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Sources: Merger Agreement (Hudson James T)
Conduct of Business Pending the Merger. Section 5.1 SECTION 6.01 Conduct of Business of by the Company Pending the Merger.
(a) Between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, . Except as set forth in Section 5.1 6.01 of the Company Disclosure Schedule, as permitted by this Agreement, required by law or unless Parent shall otherwise consent Law, consented to in writing by Parent (which such consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed) or for any actions taken reasonably and in good faith in response to COVID-19 or COVID-19 Measures or in connection with the November 3, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ federal elections and the results thereof, during the period from the date of this Agreement to the Effective Time, (provided that, for the avoidance of doubt, except as expressly set forth in the following paragraph of this Section 6.01 or expressly set forth in Section 6.01 of the Company Disclosure Schedule, the Company is not permitted to take any actions in response to COVID-19 or COVID-19 Measures or in connection with the November 3, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ federal elections and the results thereof that would otherwise not be permitted by the following paragraph of this Section 6.01), the Company shall, and shall cause each of its Subsidiaries to (Ai) use reasonable best efforts to conduct the business businesses of the Company and its subsidiaries shall be conducted Subsidiaries in its all material respects in the ordinary course of business; (ii) use commercially reasonable efforts to preserve materially intact its current business organization and to preserve in all material respects its relationships of the Company and its Subsidiaries with significant Franchisees and the franchise system as a whole, key employees and its material suppliers, licensors, licensees, distributors, wholesalers, lessors and others having significant business dealings with the Company or any of its Subsidiaries and (iii) comply in all material respects with applicable Law, and in each case of clauses (i) and (ii); provided that, for the avoidance of doubt, the Company shall use its reasonable best efforts not be obligated to preserve substantially intact its business organizationtake any action that would not be permitted by the following paragraph of this Section 6.01 and the failure to not take any action not permitted by the following paragraph of Section 6.01 shall not be deemed a breach of this sentence of Section 6.01. Without limiting the generality of the foregoing, except as set forth in Section 6.01 of the Company Disclosure Schedule, expressly required by this Agreement, required by Law or Contract, as consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed and material business relationshipsshall be deemed to be given if, within five (B5) Business Days after the Company has provided to Parent a written request for consent, Parent has not rejected such request in writing), during the period from the date of this Agreement to the Effective Time, the Company shall perform its obligations under this Agreementnot, and (C) without limiting the foregoing, neither shall not permit any Subsidiary of the Company nor to:
(a) declare, authorize, establish a record date for, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or other equity, property or a combination thereof) in respect of, any of its subsidiaries shall:
(i) amend capital stock, other than dividends or otherwise change distributions by a wholly-owned Subsidiary of the Company to its Certificate of Incorporation or By-Laws or any similar governing instrumentsparent;
(iib) issuesplit, deliver, sell, pledge, dispose combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in lieu of or encumber in substitution for shares of its capital stock;
(c) repurchase, redeem or otherwise acquire any shares of its capital stock, ownership interests or voting securities, stock or any options, warrants, rights, convertible securities or exchangeable securities, stock-settled performance units or other rights of any kind to acquire any such shares or receive other rights that give the holder thereof any economic interest of a nature accruing to the holders of such shares, other than (i) the acquisition by the Company of Shares in connection with the surrender of Shares by holders of Company Stock Options in order to pay the exercise price thereof, (ii) the withholding of Shares to satisfy Tax obligations with respect to awards granted pursuant to the Company Stock Plans, (iii) the acquisition by the Company of Shares pursuant to a repurchase plan that was publicly announced prior to the date hereof and (iv) the acquisition by the Company of Company Stock Options, Restricted Stock Units and Performance Stock Units in connection with the forfeiture of such awards pursuant to their respective terms;
(d) issue, deliver or sell any shares of its capital stockstock or other voting securities or equity interests, any options, warrants, rights, convertible or exchangeable securities, stock-settled performance units or other rights to acquire any such shares, securities, interests or other rights that give the holder thereof any economic interest of a nature accruing to the holders of such shares or securities, other than (i) upon the exercise or settlement of awards under the Company Stock Plans outstanding on the date of this Agreement (or granted following the date of this Agreement to the extent permitted by this Section 6.01(d)) in accordance with their present terms and (ii) issuances of Restricted Stock Units as set forth on Section 6.01(d) of the Company Disclosure Schedule;
(e) amend the Company Charter or the Company By-laws or the comparable organizational documents of any Subsidiary of the Company;
(f) acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, (A) any other person (or all or substantially all of the assets of any person) or (B) any assets, real property, securities, properties, interests, or businesses that are material to the Company and its Subsidiaries, taken as a whole, other than (x) transactions between the Company and its wholly-owned Subsidiaries, and (y) purchases of raw materials, supplies, equipment, inventory and third party software in the ordinary course of business (it being understood and agreed that the acquisition of any other person (or all or substantially all of the assets of any person) is not in the ordinary course of business);
(g) sell, transfer, lease, license, sublicense, abandon or otherwise dispose of any properties or assets that are material to the Company and its Subsidiaries, taken as a whole (including capital stock or other ownership interests of any Subsidiary of the Company and any joint venture to which the Company or any voting securities (including but not limited Company Subsidiary is a party and is material to stock appreciation rightsthe Company and its Subsidiaries, phantom stock or similar instrumentstaken as a whole, and intangible property), other than (i) sales or other dispositions of products and inventory in the ordinary course of business, (ii) sales or other dispositions of equipment or Intellectual Property that is no longer used in the operations of the Company or any Subsidiary of its subsidiaries the Company or (except iii) the non-exclusive licensing or sublicensing of Intellectual Property in the ordinary course of business;
(h) (i) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any Subsidiary of the Company or guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or similar agreement to maintain any financial statement condition of another person (other than the Company or any wholly-owned Subsidiary of the Company) (collectively, “Indebtedness”), other than (A) the issuance incurrence of Common Shares upon Indebtedness not prohibited by the exercise of Options Securitization Agreement in an amount not to exceed $3,000,000 in the aggregate; provided, that any such Indebtedness is incurred pursuant to one or more borrowings under Class A-1 Notes (as defined in connection with other stock-based awards outstanding the Securitization Agreement) issued as of the date of this Agreement, (B) intercompany Indebtedness between the Company and a wholly-owned Subsidiary or between wholly-owned Subsidiaries of the Company, in each case, permitted or not prohibited by the Securitization Agreement and the Management Agreement and (C) other than Indebtedness incurred pursuant to Class A-1 Notes in accordance with the terms of any Company Stock Option Planclause (A), or (B) issuances in accordance with the Rights Plan);
(iii) declareother Indebtedness incurred, 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 any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase assumed or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions entered into in the ordinary course of business (including any borrowings under the Company’s existing credit facilities and in respect of letters of credit) permitted by the Securitization Agreement and the Management Agreement in an amount not to exceed $3,000,000 in the aggregate or pursuant (ii) make any loans or capital contributions to, or investments in, any other person, in an aggregate amount of $3,000,000 or more for all such investments, other than to existing Contractsany wholly-owned Subsidiary of the Company;
(viii) other than except as required by applicable Law or the terms of any Plan currently in effect, as contemplated by this Agreement, or as otherwise set forth in the ordinary course Company Disclosure Schedule, (i) increase the compensation, bonus, severance or termination pay payable or that could become payable by the Company or any of business consistent its Subsidiaries to any current or former directors or vice presidents or more senior employees, (ii) enter into any employment, consulting, severance, retention or termination agreement or arrangement with past practiceany director or executive officer of the Company, (iii) establish, adopt or enter into or amend in any material respect any Contractcollective bargaining agreement or other agreement with a labor union, works council or similar organization, (iv) establish, adopt, enter into, materially modify or terminate any Plan other than amendments to such Plan in the ordinary course of business and renewals of Plans that are health, welfare and insurance plans in the ordinary course of business, (v) act to accelerate or fund or in any other way secure any rights or benefits under any Plan to the extent not already provided in any such Plan, (vi) pay any bonus to any of the current or former directors, officers, employees or individual consultants of the Company or its Subsidiaries, other than annual bonuses payable in respect of fiscal year 2020 (“2020 Annual Bonuses”) as set forth on Section 6.01(i) of the Company Disclosure Schedule, (vii) promote any employee who is an officer to a position more senior than such employee’s position as of the date of this Agreement, or promote a non-officer employee to an officer position, (viii) grant any new awards under any Plan except as contemplated by Section 6.01(d) of this Agreement, (ix) take any action to amend, waive or accelerate any rights or benefits under any Plan, (x) grant, amend or modify any equity or equity-based awards, (x) hire or terminate without cause any vice president or more senior employee, or (xi) forgive any loans, or issue any loans (other than loans under any Plan intended to qualify under Section 401(k) of the Code and routine travel and business advances issued in the ordinary course of business), to directors, officers, or employees of the Company or any of its Subsidiaries;
(viiij) authorize settle any material new capital expenditures which areAction, in each case involving or against the Company or any Subsidiary of the Company, other than (i) the settlement of Actions that require payments by the Company or any Subsidiary of the Company (net of insurance proceeds) in an amount not to exceed, in the aggregate, $4,000,000, (ii) the settlement of Actions disclosed, reflected or reserved against in the most recent financial statements (or the notes thereto) of the Company included in the SEC Documents for an amount not materially in excess of the Company’s capital expenditure budget set forth amount so disclosed, reflected or reserved and, in each case of clauses (i) and (ii), that do not involve the imposition of restrictions on Section 3.8 the business or operations of the Company Disclosure Scheduleor any of its Subsidiaries that, in each case, materially interfere with the operations of the Company and its Subsidiaries, taken as a whole and (iii) settlements permitted pursuant to Section 7.11;
(ixk) except for borrowings under make any material change in accounting methods, principles or practices by the Company or any Company Subsidiary materially affecting the consolidated assets, liabilities or results of operations of the Company’s existing credit facilities, incur except as required (i) by GAAP (or modify in any material respect in an manner adverse interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization or (ii) by Law;
(l) (i) adopt a plan of merger, consolidation, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any Subsidiary of the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person Company (other than a subsidiary reorganizations solely by or among wholly-owned Subsidiaries of the Company) or (ii) enter into a new line of business or new franchise system;
(m) change, revoke or rescind any material election relating to Taxes, make any material amendment with respect to any material Tax Return, settle or compromise any material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the SEC Documents, request any rulings from or the execution of any closing agreement with any Governmental Authority (except in connection with a settlement of a Tax liability for an amount that does not exceed the amount disclosed, reflected or reserved against in the financial statements contained in the SEC Documents), change an annual accounting period for Tax purposes, or change any material accounting method for Tax purposes, except, in each case, for actions taken in the ordinary course of business or required by Law;
(n) make any capital expenditures, other than (i) capital expenditures in accordance with the annual budget for 2020 provided prior to the date hereof by the Company to Parent, (ii) maintenance capital expenditures and required repairs and expenditures in the ordinary course of business and (iii) any other capital expenditures taken outside of the ordinary course of business in an amount not to exceed, in the aggregate, $5,000,000;
(o) voluntarily (i) terminate, materially amend or modify, or waive material rights or material claims under any Selected Contract or (ii) enter into any Contract that would have been considered a Selected Contract if it had been entered into prior to the date of this Agreement, in each case, other than in the ordinary course of business consistent with past practice(provided that in all cases the Company shall provide reasonable advance notice to, pursuant and reasonably consult with, Parent prior to letters of credit or otherwisetaking any such actions described in this clause (o));
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (Cp) enter into any employmentmaterial Contract that would, consulting or severance agreement or arrangement with any to the Knowledge of its present or former directorsthe Company, officers or other employees, except for offers bind Affiliates of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, Surviving Company (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 the Company, the Surviving Company or Subsidiaries of the Company Disclosure Scheduleor the Surviving Company) following the Closing;
(xiq) make (i) fail to use commercially reasonable efforts to renew or maintain insurance policies maintained by the Company or any change in any accounting principlesCompany Subsidiary or comparable replacement policies, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (Aii) form any captive insurance program;
(r) make any Tax election material change to the terms of the Company’s or change any method of accounting, (B) enter into any settlement its Subsidiaries’ system-wide policies or compromise of any Tax liability, (C) file any amended Tax Return procedures with respect to any Tax(i) franchisee royalty or other fees and charges, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or maintenance of the Funds or (Fii) surrender any right to claim a Tax refund;
(xiii) settle franchisee incentives or compromise any litigationfranchisee economic assistance, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivablein each case, other than in the ordinary course of business consistent with past practice(provided that in all cases the Company shall provide reasonable advance notice to, and reasonably consult with, Parent prior to any taking such material actions in this clause (r));
(xviis) materially change except as required by any Contract entered into, and made available to Parent, prior to the date of its business policies;
(xviii) other than this Agreement, open any restaurant in a country where the ordinary course of business consistent with past practice, enter into Company or any lease (as lessor Company Subsidiary does not currently have an owned or lessee); sell, abandon franchised restaurant or make otherwise engage in any other disposition of operations in any of its assets, properties country in which the Company or businesses; grant or suffer any Lien on any of its assets, properties or businessesCompany Subsidiary does not currently conduct other operations; or
(xixt) authorize any of, or commit or agree to take any of of, the foregoing actions described in Section 5.1(a)(ithe preceding clauses (a) through Section 5.1(a)(xviii– (q).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 6.1. Conduct of Business of the Company Pending the Merger.
(a) Between the date of this Agreement . The Company covenants and the Effective Timeagrees that, except as otherwise expressly permitted or contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, Agreement or as set forth in Section 5.1 6.1 of the Company Disclosure ScheduleLetter, as required by law or until the Effective Time, unless the Parent shall otherwise consent agree in writing (which consent prior to the taking of any action otherwise prohibited by the terms of this Section 6.1, the Company shall, and shall not be unreasonably withheldcause REI Barbados to, delayed conduct its operations and business in the ordinary and usual course of business, and consistent with past practice and use its reasonable efforts to preserve intact its business organizations' goodwill, maintain in effect all existing material qualifications, licenses, permits, approvals and other authorizations, substantially comply with all applicable Laws, keep available the services of its present executive officers and key employees, and preserve the goodwill and business relationships with suppliers, distributors, customers and others having business relationships with it. Without limiting the generality of the foregoing, and except as otherwise expressly permitted by this Agreement or conditioned), (A) the business as set forth in Section 6.1 of the Company and its subsidiaries shall be conducted in its ordinary course Disclosure Letter, prior to the Effective Time, without the prior written consent of business and the Parent, the Company shall use its reasonable best efforts to preserve substantially intact its business organizationwill not, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shallwill cause REI Barbados not to:
(ia) except to the extent required by Law or the rules and regulations of The Nasdaq Stock Market, amend or otherwise change its Certificate the articles of Incorporation incorporation or By-Laws or any similar governing instrumentsbylaws of the Company;
(iib) issue, deliverissue or authorize or propose the issuance of, sell, pledgepledge or dispose of, dispose of grant or encumber otherwise create, or agree to issue or authorize or propose the issuance, sale, pledge or disposition of, grant or otherwise create any additional shares of capital stock, ownership interests or voting securitiesof, or any options, warrants, convertible securities or other rights of any kind Options to acquire or receive any shares of of, its capital stock, any other ownership interests stock or any voting debt or equity securities (including but not limited to stock appreciation rights, phantom convertible into or exchangeable for such capital stock or similar instruments), accelerate any right to convert or exchange or acquire any securities of the Company for any such shares or ownership interest or take any of its subsidiaries action to cause to be exercisable any otherwise unexercisable option under any Company Stock Option granted under any Company Option Plan, other than (except for (Ai) the issuance of 1,010,101 shares of Company Common Shares Stock upon the conversion of the Convertible Notes, (ii) any such issuance pursuant to the exercise of Company Stock Options or in connection with other stock-based awards outstanding as of granted prior to the date of this Agreement, in each casehereof under the Company Option Plans, in accordance with their respective terms as in effect on the date hereof, (iii) the issuance of shares of Company Common Stock pursuant to the Company ESPP in accordance with its terms as in effect on the date hereof in accordance with Section 3.2(g).
(c) purchase, redeem or otherwise acquire or retire, or offer to purchase, redeem or otherwise acquire or retire, (i) any shares of its capital stock (including any Company Stock Option PlanOptions with respect to its capital stock and any security convertible or exchangeable into its capital stock), or (Bii) issuances in accordance with the Rights Plan)any long-term debt;
(iiid) 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 any dividend stock, or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) subdivide, reclassify, combinerecapitalize, split, subdivide, redeem, purchase combine or otherwise acquire exchange any of its shares of capital stock of or otherwise change its capitalization as it exists on the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesdate hereof;
(ve) make incur or become contingently liable with respect to any acquisition of (whether by merger, consolidation indebtedness for borrowed money or acquisition of stock the deferred purchase price for property or substantially all of the assets), services or make pursuant to any investment in any interest in, any corporation, partnership capital lease or other business organization financing or division thereofguarantee any such indebtedness or issue any debt securities;
(vif) sell except as may be required by applicable Laws, or otherwise dispose of as contemplated by this Agreement, (whether by mergeri) increase the compensation payable or to become payable to, consolidation or disposition of stock enter into any employment agreement with, its executive officers or assets or otherwise) any corporationemployees, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant except to existing Contracts;
(vii) other than non-executive officers in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
; (viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (Bii) grant any severance or termination pay not provided for under to any Employee director, executive officer or employee of the Company or REI Barbados, except pursuant to existing Company Benefit Plan, Plans; (Ciii) enter into any employment, consulting or severance agreement with any director, executive officer or arrangement employee; or (iv) except as required by applicable Laws, establish, adopt, enter into, terminate, withdraw from or amend in any material respect or take action to accelerate or waive (or otherwise diminish) any rights or benefits under any Company Benefit Plan or any other plan, program or arrangement, or any material employment policy;
(g) take any action, other than reasonable actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including Tax accounting policies, procedures and elections relating to Taxes that would apply to the Company after the Merger), except as may be required by generally accepted accounting principles, or settle any material Audit, make any material Tax election or settle any material Tax liability or, except as required by Law, amend in any material respect any material Tax Return;
(h) acquire or agree to acquire by merging or consolidating with, or by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business entity;
(i) mortgage or otherwise encumber or subject to any Lien, or sell, transfer or otherwise dispose of (by merger or otherwise), any of its present properties or former directorsassets, officers or other employees, except for offers of employment than encumbrances and Liens that are incurred in the ordinary course of business and consistent with past practice with employees who are not directors or officersand sales, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 transfers and dispositions of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than inventory in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return and consistent with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refundpast practice;
(xiiij) settle or compromise any litigation, other than settlements material pending or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008threatened Litigation;
(xivk) waive make any right advance, loan, extension of value material credit or capital contribution to, or purchase or acquire (by merger or otherwise) any stock, bonds, notes, debentures or other securities of, or any assets constituting a business unit of, or make any other investment in, any person, firm or entity, except (a) extensions of trade credit and endorsements of negotiable instruments and other negotiable documents in the ordinary course of business, (b) investments in cash and cash equivalents, and (c) payroll and travel advances in the ordinary course of business;
(l) make any capital expenditures in the aggregate for the Company and REI Barbados in excess of the amounts specified in the Company's budget for capital expenditures, a true and complete copy of which has previously been delivered to the Parent;
(m) waive, amend or allow to lapse any term or condition of any confidentiality or "standstill" agreement to which the Company is a party;
(n) enter into (a) any Contracts with distributors or sales agents other than Contracts terminable without penalty on less than 30 days' notice, (b) any subsidiary Contracts to distribute products for others or which restrict the ability of the Company, REI Barbados or the Company's affiliates to compete or (c) any other Contracts that would constitute Material Contracts; or amend any of the foregoing agreements as they exist on the date hereof;
(o) amend, change or waive (or exempt any person or entity from the effect of) the Rights Agreement, or redeem the Rights, except in connection with the transactions contemplated under this Agreement or the Ancillary Documents;
(p) change any of the accounting principles or practices used by the Company;
(xvq) adopt a plan of liquidation effect any material change in the Company's advertising, product promotion or resolutions providing for the liquidation, dissolution, merger, consolidation brand support policies or other reorganization of the Company programs or commit to any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parentsignificant new product promotion or advertising campaign;
(xvir) effect any material change in the Company's billing practices or sales terms, or cause or permit a material acceleration or delay in the manufacture, shipment or sale of inventory, the collection of accounts or notes receivable or the payment of accounts or notes payable;
(s) enter into any Contracts for Derivatives;
(t) waive, relinquish, release or terminate any right or claim, including any such right or claim under any Material Contract, except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with the customary past practicepractice of the Company, or permit any rights of material value to use any Intellectual Property to lapse or be forfeited;
(xviiu) materially change take any action to cause the Company Common Stock to be delisted from the NASDAQ National Market prior to the completion of its business policiesthe Offer;
(xviiiv) other than take any action that would reasonably be expected to result in the ordinary course of business consistent with past practice, enter into any lease (as lessor conditions contained in Section 8.2(a) or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses8.2(b) not to be satisfied; or
(xixw) authorize any of, or commit or agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Timeof, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchangeforegoing actions.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between Move has agreed that, from the date of this the Merger Agreement and until the earlier of the Effective TimeTime or the termination of the Merger Agreement, except as otherwise contemplated expressly required by this the Merger Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 execution of the Company Disclosure ScheduleMerger Agreement in Move’s confidential disclosure letter, agreed in writing by Parent or as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheldlaw, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organizationMove will, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any will cause each of its subsidiaries shall:
to, (i) amend or otherwise change its Certificate of Incorporation or By-Laws or any similar governing instruments;
(ii) issue, deliver, sell, pledge, dispose of or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other conduct their respective business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than and operations in the ordinary course of business consistent with past practice, enter into or amend (ii) use their respective reasonable best efforts to (A) preserve substantially intact their respective business organization, (B) preserve their respective material assets, rights and properties in any good repair and condition, (C) preserve satisfactory business relationships and goodwill with their respective material respect any Contract;
(viii) authorize any material new capital expenditures which arecustomers, in the aggregateadvertisers, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of suppliers, licensors, licensees, distributors, wholesalers, lessors and others having business dealings with the Company Disclosure Schedule;
or any of its subsidiaries, and any governmental entity that has jurisdiction over Move or any of its subsidiaries, and (ixD) except for borrowings under the Company’s existing credit facilities, incur or modify in prepare and file any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than required regulatory filings on a subsidiary of the Company), in each case, other than in the ordinary course of business timely basis consistent with past practice; and (iii) comply in all material respects with all applicable laws. Move has further agreed that, pursuant from the date of the Merger Agreement until the earlier of the Effective Time and the termination of the Merger Agreement, except as (i) disclosed prior to letters execution of credit or otherwise;
the Merger Agreement in Move’s confidential disclosure letter, (xii) except to expressly required by the extent required under any Employee Benefit Plan or as Merger Agreement, (iii) required by applicable lawlaw or (iv) consented to in writing by Parent (which consent may not be unreasonably withheld, conditioned or delayed), Move will not, and will cause its subsidiaries not to, among other things and subject to specified exceptions (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the including specified ordinary course of business with respect to employees who are not directors exceptions): • issue, deliver or officers), (B) grant sell any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 securities of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigationCompany, other than settlements Shares issuable upon exercise of the options or compromises settlement of litigation where RSUs, in each case outstanding on the amount paid does not exceed $250,000 or, if greater, date of the total incurred cash reserve amount for such matter, Merger Agreement and in accordance with their terms as of the date of this the Merger Agreement; • repurchase, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive redeem or otherwise acquire any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization securities of the Company or any subsidiary of the Company options, warrants or other than the dissolution of rights to acquire any inactive subsidiary of the Company mutually agreed to by the Company and the Parentsuch securities;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Sources: Offer to Purchase (News Corp)
Conduct of Business Pending the Merger. Section 5.1 5.01 Conduct of Business of by the Company Pending the Merger.
(a) Between . The Company agrees that, on and from the date of this Agreement and until the earlier of the Effective TimeTime and termination of this Agreement pursuant to Article VIII, except as otherwise contemplated required by applicable Law or specifically permitted by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (Ai) the business businesses of the Company and its subsidiaries Group Companies shall be conducted in its the ordinary course of business consistent with past practice; and (ii) the Company shall use its reasonable best efforts to preserve substantially intact its the assets and the business organizationorganization of the Group Companies, to keep available the services of the current officers and key employees of the Group Companies and to maintain in all material respects the current relationships of the Group Companies with existing customers, suppliers and other persons with which any Group Companies has material business relationshipsrelations as of the date hereof. Without limiting the generality of the foregoing, (B) from the date of this Agreement until the earlier of the Effective Time and termination of this Agreement pursuant to Article VIII, except as required by applicable Law or specifically permitted by this Agreement, the Company shall perform its obligations under this Agreementnot, and (C) without limiting the foregoingshall procure that no Group Company will, neither the Company nor directly or indirectly, do or propose to do any of its subsidiaries shall:the following without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned):
(ia) amend or otherwise change its Certificate memorandum and articles of Incorporation association or By-Laws or any similar governing instrumentsequivalent organizational documents;
(iib) issue, deliversell, selltransfer, lease, sublease, license, pledge, dispose of of, grant or encumber encumber, or authorize the issuance, sale, transfer, lease, sublease, license, pledge, disposition, grant or encumbrance of, (i) any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights class of any kind to acquire or receive any shares of capital stock, any Group Company (other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for than in connection with (A) the issuance of Common Shares upon the exercise of Options Warrants in accordance with the Warrant Agreement, (B) the vesting of any Performance Shares in accordance with the Company Share Plan, (C) the withholding of Company securities to satisfy tax obligations with respect to Performance Shares or Phantom Shares (D) the acquisition by the Company of its securities in connection with other stock-based awards outstanding as the forfeiture of Warrants or Performance Shares, or (E) the date acquisition by the Company of this Agreement, its securities in each case, connection with the net exercise of Warrants in accordance with the terms of the Warrant Agreement, (ii) any property or assets (whether real, personal or mixed, and including leasehold interests and intangible property) of any Group Company Stock Option Planwith a value or purchase price (including the value of assumed liabilities) in excess of US$10,000,000, except in the ordinary course of business, or (Biii) issuances any material Intellectual Property owned by or licensed to any Group Company, except in accordance the ordinary course of business consistent with the Rights Plan)past practice;
(iiic) declare, set aside, make or pay any dividend or other distribution, payable in cash, stockshares, property or otherwise, with respect to any of its capital stock shares (except for other than dividends or other distributions from any dividend or distribution by a subsidiary Subsidiary of the Company to the Company or another wholly owned subsidiary any of the Companyits other Subsidiaries consistent with past practice);
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire acquire, directly or indirectly, any shares of its share capital stock or securities or other rights exchangeable into or convertible or exercisable for any of its share capital (other than the purchase of Shares, Warrants or Performance Shares to satisfy obligations under the Warrant Agreement or Warrants or Company (except for Share Plan, including the acquisition withholding of Common Shares, Warrants or Performance Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions (i) Warrants in respect of Restricted Shares pursuant to accordance with the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any and conditions of the Company’s subsidiariesWarrant Agreement and (ii) Performance Shares in accordance with the terms and conditions of such Performance Shares);
(ve) make effect or commence any acquisition liquidation, dissolution, scheme of (whether by arrangement, merger, consolidation consolidation, amalgamation, restructuring, reorganization, public offering or acquisition of stock or substantially all of the assets)similar transaction involving any Group Company, or make create any investment in any interest innew Subsidiary, any corporation, partnership or other business organization or division thereofthan the Transactions;
(vif) sell or otherwise dispose of (acquire, whether by purchase, merger, consolidation spin off, consolidation, scheme of arrangement, amalgamation or disposition acquisition of stock or assets or otherwise, any assets, securities or properties, in aggregate, with a value or purchase price (including the value of assumed liabilities) in excess of US$10,000,000 in any transaction or related series of transactions;
(g) make any capital contribution or investment in any corporation, partnership or partnership, other business organization or any division thereof or otherwise sell or dispose in excess of any assets, other than sales or dispositions US$10,000,000 in the ordinary course of business or pursuant to existing Contractsaggregate;
(viih) issue or grant any Performance Shares, Phantom Shares or awards of other than in types to any person under the ordinary course Company Share Plan; (i) make any changes with respect to financial accounting policies or procedures, including changes affecting the reported consolidated assets, liabilities or results of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess operations of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) Group Companies, except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles IFRS or regulatory requirements with respect thereto;
(xiij) enter into, amend, modify, consent to the termination of, or waive any material rights under, any Material Contract (or any Contract that would be a Material Contract if such Contract had been entered into prior to the date hereof);
(k) commence any Action for a claim of more than US$10,000,000 (excluding any Action seeking for an injunctive relief or other than in the ordinary course similar equitable remedies) or settle, release, waive or compromise any pending or threatened Action of business or as required by applicable law, against any Group Company (A) make any Tax election or change any method for an amount in excess of accountingUS$10,000,000, (B) enter into that would impose any settlement material restrictions on the business or compromise operations of any Tax liabilityGroup Company, or (C) file that is brought by or on behalf of any amended Tax Return current, former or purported holder of any share capital or debt securities of any Group Company relating to the Transactions;
(l) fail to make in a timely manner any filings or registrations with respect the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(m) engage in the conduct of any new line of business material to any Taxthe Company and its Subsidiaries, taken as a whole;
(Dn) make or change any annual material Tax accounting periodelection, (E) amend any Tax Return, enter into any closing agreement relating or seek any ruling from any Governmental Authority with respect to any material Tax or (F) Taxes, surrender any right to claim a Tax refund;
(xiii) material refund of Taxes, settle or compromise finally resolve any litigationmaterial controversy with respect to Taxes, other than settlements agree to an extension or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as waiver of the date statute of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material limitations with respect to the Company assessment or determination of material Taxes, change any subsidiary method of the Company;
(xv) adopt a plan Tax accounting or Tax accounting period, initiate any voluntary Tax disclosure to any Governmental Authority, or incur any material amount of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization Taxes outside of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practicebusiness;
(xviio) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practiceannounce an intention, enter into any lease (as lessor formal or lessee); sellinformal agreement or otherwise make a commitment, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Sources: Merger Agreement (TDCX Inc.)
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company by Meer Pending the Merger.. Prior to the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise expressly contemplated by this Agreement or described on Schedule 5.1 hereto:
(a) Between the date of this Agreement Meer shall conduct, and the Effective TimeStockholders shall cause Meer to conduct, except as otherwise contemplated by this Agreement, as disclosed its business only in the SEC Reports filed prior to the date of this Agreementordinary and usual course consistent with past practice, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company Meer shall use its reasonable best efforts to preserve substantially intact its the present business organization, keep available the services of its present officers and material business relationships, (B) the Company shall perform its obligations under this Agreementkey employees, and preserve its business relationships with customers, suppliers and other third parties;
(Cb) without limiting Meer shall not, and the foregoing, neither the Company nor any of its subsidiaries shall:
Stockholders shall not permit Meer to (i) amend its articles of incorporation or otherwise change its Certificate of Incorporation or Byby-Laws or any similar governing instruments;
laws, (ii) issuesplit, deliver, sell, pledge, dispose of combine or encumber reclassify any shares of its outstanding capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) except as provided in Section 6.8, declare, set aside, make aside or pay any dividend or other distribution, distribution payable in cash, stockstock or property, property or otherwise, with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase directly or indirectly redeem or otherwise acquire any shares of its capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesstock;
(vc) make Meer shall not, and the Stockholders shall not permit Meer to (i) authorize for issuance, issue or sell or agree to issue or sell any acquisition of shares of, or Rights to acquire or convertible into any shares of, its capital stock (whether by mergerthrough the issuance or granting of options, consolidation warrants, commitments, subscriptions, rights to purchase or acquisition of stock otherwise), (ii) merge or substantially all consolidate with another entity, (iii) acquire or purchase an equity interest in or a substantial portion of the assets), or make any investment in any interest in, any assets of another corporation, partnership or other business organization or division thereof;
otherwise acquire any assets outside the ordinary and usual course of business and consistent with past practice or otherwise enter into any contract, commitment or transaction outside the ordinary and usual course of business consistent with past practice, (viiv) sell 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, (whether by mergerv) incur, consolidation assume, guarantee, secure or disposition of stock prepay any indebtedness (including, without limitation, capitalized lease obligations) or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, liabilities other than sales or dispositions in the ordinary course of business and consistent with past practice, (vi) assume, guarantee, endorse or pursuant otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, (vii) make any loans, advances or capital contributions to, or investments in, any other person, (viii) authorize or make capital expenditures in excess of the amounts currently budgeted therefor and disclosed to existing ContractsParent, (ix) permit any insurance policy naming Meer as a beneficiary or a loss payee to be modified, canceled or terminated, except in connection with the simultaneous issuance of a replacement policy providing equivalent coverage, or (x) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(viid) Meer shall not, and the Stockholders shall not permit Meer to (i) adopt, enter into, terminate or amend (except as may be required by applicable Laws) any Plan or other than 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 consistent with past practice), enter into or amend (iii) take any action to fund or in any material other way secure, or to accelerate or otherwise remove restrictions with respect to, the payment of compensation or benefits under any Contractemployee plan, agreement, contract, arrangement or other Plan;
(viiie) authorize Meer shall not, and the Stockholders shall not permit Meer to, take any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material action with respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any personto, or make any loanschange in, advances its accounting or capital contributions tax policies or procedures, except as required by law or to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent comply with past practice, pursuant to letters of credit or otherwiseGAAP;
(xf) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take Neither Meer nor any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company Stockholders shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action that would jeopardize (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respectthe treatment of Parent's acquisition of Meer as a pooling of interests for financial accounting purposes; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation qualification of the Merger as a reorganization within the meaning of Section 368(a) of the Code;
(g) Meer will make or cause to be made all necessary filings with all Governmental Entities; and
(h) Meer shall promptly provide to Parent a copy of all correspondence and written communications received from or supplied to any Governmental Entity.
Section 5.2 Conduct of Business by Parent Pending the other transactions Merger. Prior to the Effective Time, unless Meer shall otherwise agree in writing, or as otherwise expressly contemplated by this Agreement, neither Parent nor Sub shall take any action that would jeopardize (i) the treatment of Parent's acquisition of Meer as a pooling of interests for financial accounting purposes or (ii) the 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 5.1 Conduct Each of Business of Qualmax and the Company Pending covenants and agrees that, during the Merger.
(a) Between period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, unless the other shall otherwise agree in writing, and except as otherwise set forth in Schedule 5.01 or as required by law with advance notification to the other, it shall (a) conduct its business and shall cause the businesses of its subsidiaries to be conducted only in, and it and its subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice and (b) use commercially reasonable efforts to preserve substantially intact its and its subsidiaries’ business organization, to keep available the services of its and its subsidiaries’ present officers, employees and consultants and to preserve its and its subsidiaries’ present relationships with customers, suppliers and other Persons with which it or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, Schedule 5.01 or as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheldwith advance notification to the other, delayed or conditioned)neither Qualmax nor the Company shall, (A) during the business period from the date of this Agreement and continuing until the earlier of the Company and its subsidiaries shall be conducted in its ordinary course termination of business and this Agreement or the Company shall use its reasonable best efforts Effective Time, directly or indirectly do, or publicly propose to preserve substantially intact its business organizationdo, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shallthe following without the consent or ratification of the other:
(ia) amend or otherwise change its Certificate of Incorporation the Qualmax Charter Documents or By-Laws or any similar governing instrumentsthe Company Charter Documents, as applicable;
(iib) issue, deliver, sell, pledge, dispose of or encumber any shares assets of capital stockQualmax or the Company, ownership interests or voting securitiesas applicable, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for (Ai) sales of assets in the ordinary course of business and in a manner consistent with past practice and (ii) dispositions of obsolete or worthless assets;
(c) (i) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of Common Shares upon the exercise any other securities in respect of, in lieu of Options or in connection substitution for shares of its capital stock; or (ii) except as required by the terms of any security as in effect on the date hereof, amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary to amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, shares of Common Stock or Qualmax Stock, as applicable, or any option, warrant or right, directly or indirectly, to acquire any such securities;
(d) except as provided in an existing obligation of Qualmax or the Company, as applicable, and in accordance with other stock-based awards outstanding such obligations, (i) increase the compensation, benefits or severance payable or to become payable to its directors, officers, employees or consultants, except for increases in salary or wages of employees in accordance with past practices, (ii) grant any severance or termination pay to, or enter into or amend any employment or severance agreement, with any current or prospective employee, except for new hire employees in the ordinary course of business, (iii) enter into any contract with any director, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer, employee or consultant except as required by applicable law and agreements in effect as of the date of this Agreement, in each case, in accordance with the terms of (v) grant any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declare, set aside, make or pay any dividend option or other distribution, payable in cash, stock, property or otherwise, with respect equity awards to any of its capital stock (director, officer, employee or consultant except for any dividend or distribution by a subsidiary pursuant to agreements in effect as of the Company to the Company date of this Agreement or another wholly owned subsidiary of the Company);
(iv) reclassifyestablish, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practiceadopt, enter into or amend in any material respect collective bargaining agreement, benefit plan, including, without limitation, any Contract;
(viii) authorize any material new capital expenditures which areplan that provides for the payment of bonuses or incentive compensation, in trust, fund, policy or arrangement for the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms benefit of any indebtedness for borrowed moneycurrent or former directors, officers, employees or assumeconsultants or any of their beneficiaries, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company)except, in each case, other than as may be required by law or as would not result in a material increase in the ordinary course cost of business consistent with past practicemaintaining such collective bargaining agreement, pursuant to letters of credit benefit plan, trust, fund, policy or otherwisearrangement;
(xe) except to the extent required under purchase any Employee Benefit Plan capital assets or as required by applicable law, (A) increase the compensation make any capital expenditures other than those purchased or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment made in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedulepractice;
(xif) make take any action to change in any accounting principles, except as may be appropriate to conform to changes in statutory policies or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
procedures (xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down procedures with respect to revenue recognition, payments of the value accounts payable and collection of any assets or any write-off of notes or accounts receivable, other than ) except as required by a change in GAAP occurring after the ordinary course of business consistent with past practicedate hereof;
(xviig) materially change any of its business policies;
(xviii) other than take, or agree in the ordinary course of business consistent with past practicewriting or otherwise to take, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(iSections 5.01(a) through Section 5.1(a)(xviii).
(bf) Between above, or any action which would make any of the date representations or warranties of Qualmax or the Company, as the case may be, contained in this Agreement and untrue or incorrect such that the Effective Timeconditions in Section 7.02(a) or 7.03(a), the Company will timely file all reports required to as applicable, would not be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly satisfied or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger prevent Qualmax or the other transactions contemplated by this AgreementCompany, as applicable, from performing or cause Qualmax or the Company, as applicable, not to perform its covenants hereunder such that the condition in Section 7.02(b) or 7.03(b), as applicable, would not be satisfied.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) Between . 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 or the Effective Time, unless Parent shall otherwise agree in writing and except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of Agreement or the Company Disclosure Schedule, the Company shall conduct its business and shall cause the businesses of its subsidiaries to be conducted in all material respects in the ordinary course of business; and, except as required by law or unless Parent set forth in the Company Disclosure Schedule, the Company shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) use all reasonable commercial efforts to preserve substantially intact the business organization of the Company and its subsidiaries shall be conducted in its ordinary course taken as a whole, to keep available the services of business the present key officers, employees and consultants of the Company shall use and its reasonable best efforts subsidiaries taken as a whole and to preserve substantially intact its business organization, and material business relationships, (B) the present relationships of the Company shall perform and its obligations under 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 contemplated by this Agreement, and (C) without limiting the foregoing, 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 the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its the Certificate of Incorporation or By-Laws of the Company or any similar governing instrumentsof its subsidiaries, except for the currently proposed amendment to increase the authorized Company Common Stock to 50,000,000 shares;
(iib) except as set forth in Section 4.1(b) of the Company Disclosure Schedule, issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests interest (including, without limitation, any phantom interest) in the Company or any voting securities of its subsidiaries.
(including but not limited to stock appreciation rightsc) sell, phantom stock pledge, dispose of or similar instruments), encumber any assets of the Company or any of its subsidiaries (except for (Ai) sales of assets in the issuance ordinary course of Common Shares upon business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, and (iii) sales of other assets not in excess of $250,000 in the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Planaggregate);
(iiid) except as set forth in Section 4.1(d) of the Company Disclosure Schedule, (i) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a wholly owned subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or otherwise, with respect to reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, 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, including the Stock Options, or enter into any agreement to do any of the foregoing;
(e) except for any dividend or distribution by a subsidiary as set forth in Section 4.1(e) of the Company to the Company or another wholly owned subsidiary of the Company);
Disclosure Schedule, (ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), ) any business or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
division; (viii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personperson or, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), except in each case, other than case in the ordinary course of business consistent with past practice, pursuant make any loans or advances; (iii) enter into or amend any contract or agreement other than in the ordinary course of business; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $500,000 for the Company and its subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement to letters effect any of credit or otherwisethe matters prohibited by this Section 4.1(e);
(xf) except to as set forth in Section 4.1(f) of the extent required under any Employee Benefit Plan or as required by applicable lawCompany Disclosure Schedule, (Ai) increase the compensation payable or fringe benefits of any of to become payable to its directorsexecutive officers, officers directors or employees (except in the ordinary course of business consistent with respect to employees who are not directors or officers), past practice; (Bii) grant any additional severance or termination pay not provided for under to, or enter into any Employee Benefit Plannew employment or severance agreements with, any director, executive officer or current employee of the Company or its subsidiaries; (Ciii) enter into any employment, consulting employment or severance agreement or arrangement with any new employees of the Company or its present subsidiaries except in the ordinary course of business consistent with past practice; or (iv) establish, adopt, enter into or amend any collective bargaining, profit sharing, thrift, restricted stock, pension, retirement, deferred compensation or severance plan, trust, fund or policy for the benefit of current or former directors, officers or employees of the Company or any of its subsidiaries, except, in each case, as may be required by law;
(g) except as required under generally accepted accounting principles, take any action to change in any material respect the accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable) of the Company or any subsidiary (except in the case of subsidiaries to conform to the Company's policies and procedures);
(h) except as set forth in Section 4.1(h) of the Company Disclosure Schedule, make any tax election inconsistent with past practice or settle or compromise any federal, state, local or foreign tax liability or agree to an extension of a statute of limitations, in each case which would be material to the Company and its subsidiaries taken as a whole;
(i) except as set forth in Section 4.1(i) of the Company Disclosure Schedule, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) material to the Company and its subsidiaries taken as a whole, other employeesthan the payment, except for offers of employment discharge or satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into or amend reserved against in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth the financial statements contained in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate SEC Reports filed prior to conform to changes in statutory the date of this Agreement or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixj) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.1 (a) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreementabove.
Appears in 1 contract
Sources: Merger Agreement (Registry Inc)
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between From the date hereof until the earlier of (i) the Effective Time and (ii) the date of any termination of this Agreement and the Effective Timepursuant to Section 8.1, except as otherwise contemplated consented to by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which such consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed), and except as otherwise contemplated, required or permitted by this Agreement, (A) the Company shall conduct business of only in, and the Company and its subsidiaries Subsidiaries shall be conducted in its not take any action except in, the ordinary course of business consistent with past practice and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform use its obligations under commercially reasonable efforts to keep available the services of its current officers and employees and preserve, in all material respects, the current relationships of the Company with customers, suppliers, licensors, licensees, distributors and other Persons with which the Company has business dealings.
(b) Without limiting the generality of the foregoing, except as set forth in Section 6.1(b) of the Company Disclosure Letter or as otherwise contemplated, required or permitted by this Agreement, applicable Law or the terms of any Company Benefit Plan or as consented to by Parent in writing (such consent not to be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier of (i) the Effective Time and (Cii) without limiting the foregoingdate of any termination of this Agreement pursuant to Section 8.1, neither the Company nor shall not do any of the following and shall not permit its subsidiaries shallSubsidiaries to do any of the following:
(i) amend amend, or otherwise change propose to adopt any amendments to, the Company’s or its Certificate Subsidiaries’ respective certificate of Incorporation incorporation or By-Laws bylaws or any similar governing instrumentscomparable organizational documents;
(ii) authorize for issuance, issue, deliver, sell, pledgedeliver or agree or commit to issue, dispose sell or deliver (whether through the issuance or granting of or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities commitments, subscriptions, rights to purchase, convertible, exchangeable or other exercisable securities, rights of any kind to purchase or otherwise) any securities in respect of, in lieu of or in substitution for shares of its capital stock, voting securities or any other equity interests or Company Stock Rights or other interests or securities in Subsidiaries that would be Company Stock Rights if they were interests or securities in the Company;
(iii) acquire or receive redeem, directly or indirectly, or amend any securities in respect of, in lieu of or in substitution for shares of its capital stock, except to the extent that such acquisition or redemption is required pursuant to the terms of any Company Benefit Plan (as then in effect) or any agreement subject to any such Company Benefit Plan (as then in effect);
(iv) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock or other equity interests, split, combine or reclassify any shares of capital stockstock or other equity interests of the Company or its Subsidiaries, declare, set aside or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any such shares of capital stock or other equity interests, or make any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom distribution in respect of such shares of capital stock or similar instruments)other equity interests;
(v) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereofSubsidiaries;
(vi) sell (A) except as reasonably necessary or otherwise dispose of (whether by mergerappropriate in order to comply with municipal platting, consolidation planning, construction and development codes or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions requirements in the ordinary course of business (but in no event for an amount that exceeds $100,000), incur Indebtedness for borrowed money or pursuant issue any debt securities, except for loans or advances to or from Subsidiaries, or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, in each case, other than the incurrence of Indebtedness under, and in accordance with, the Existing Loan Documents secured solely by Owned Real Property, Leased Real Property or JV Owned Real Property in the ordinary course of business consistent with past practice (provided that, in the event that any borrowing will exceed $500,000 under any Existing Loan Document, the Company shall give Parent reasonable advance notice prior to the incurrence of any such Indebtedness), (B) make any loans or advances to any Person, make any material change in its existing Contractsborrowing or lending arrangements for or on behalf of any Person or enter into any “keep well” or similar agreement to maintain the financial condition of another entity, (C) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (other than in a fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; (D) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any material Lien (other than Permitted Liens) thereupon; or (E) prepay any Indebtedness for borrowed money or issue or amend the terms of any debt securities of the Company or any of its Subsidiaries;
(vii) (A) enter into, adopt, amend, modify or terminate any employment, bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, severance or other Company Benefit Plan or employee benefit arrangement, agreement, trust, plan, fund, Contract or other arrangement for the compensation, benefit, or welfare of any current or former employee, director or consultant of the Company or any of its Subsidiaries, (B) otherwise take any action to cause to accelerate the payment, funding, right to payment or vesting of any compensation or benefits (except as required pursuant to this Agreement) or grant any increases to the compensation, severance or benefits of any current or former employee, director or consultant of the Company or any of its Subsidiaries or pay any bonus or special remuneration (whether in cash, equity or otherwise) to any current or former employee, consultant, independent contractor or director; (C) hire or terminate (without cause) any employee or service provider of the Company or its Subsidiaries with an aggregate annual compensation opportunity of $100,000 or more; or (D) appoint any Person to a position of executive officer or director of the Company or its Subsidiaries;
(viii) except as may be specifically required under a Company Benefit Plan, grant, confer, award, or modify the terms of any options, convertible securities, restricted stock, phantom shares, equity-based compensation or other rights to acquire, or denominated in, any of the Company’s or any of its Subsidiaries’ capital stock or other voting securities or equity interests (except as may be required by the terms of any unexercisable options or other equity awards outstanding on the date of this Agreement);
(ix) other than as contemplated by the forecast set forth in Section 6.1(b)(ix) of the Company Disclosure Letter or transactions required pursuant to existing Contracts as in effect on the date hereof and disclosed in the Company Disclosure Letter, (A) acquire, lease (as lessee) or license (as licensee) any property or assets; or (B) sell, lease (as lessor), license (as licensor) or dispose of any property or assets (including, for the avoidance of doubt, any Owned Real Property), in each case, with an individual value greater than $100,000 (provided that, with respect to the sale of lots in the ordinary course of business consistent with past practice which would otherwise require the consent of Parent pursuant to this clause (ix), the Company shall only be required to provide Parent with 48 hours’ advance notice of any such sale and, in the event Parent fails to respond within such period, Parent’s consent shall be deemed to have been granted);
(x) except as may be required as a result of a change in applicable Laws or in GAAP, make any change in any of the accounting principles or practices used by it or fail to maintain all financial books and records in all material respects in accordance with GAAP;
(xi) (A) make, change or revoke any Tax election that would be reasonably expected to adversely affect in any material respect the Tax liability of the Company or any of its Subsidiaries, (B) change any material Tax accounting method, (C) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability, (D) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes, (E) file any amended material Tax Return with respect to any Tax, or (F) surrender any right to a refund of material Taxes;
(xii) (A) enter into, renew, extend or terminate (other than the termination or expiration of a Material Contract as in effect as of the date hereof pursuant to its terms) any Material Contract (or any Contract that would have been a Material Contract if it had been in effect on the date hereof, but specifically excluding any Material Real Property Leases), except in the ordinary course of business consistent with past practice with respect to (1) any such Material Contract described solely in clause (iv) of the definition of “Material Contract” that does not involve payments to or from the Company or any of its Subsidiaries of more than $200,000 during any twelve-month period or (2) subject to clauses (ix) and (xxi) of this Section 6.1(b), any sale agreement; or (B) make any material amendment or change to any such Material Contract (including any waiver, release, compromise or assignment of material rights or claims thereunder, but specifically excluding any Material Real Property Leases), except in the ordinary course of business consistent with past practice with respect to any amendment or change that would not itself alone result in such Contract being a Material Contract (other than pursuant to clause (iv) of the definition of “Material Contract”) and which amendment or change does not involve payments to or from the Company or any of its Subsidiaries of more than $200,000 during any twelve-month period;
(xiii) except as required by applicable Law, recognize or certify any labor union, labor organization, works council, or group of employees of the Company or its Subsidiaries as the bargaining representative for any employees of the Company or its Subsidiaries;
(xiv) except for the Litigation referred to in Section 6.6, settle or compromise any pending or threatened Litigation or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation, absolute or accrued, asserted or unasserted, contingent or otherwise, other than the settlement, compromise, payment, discharge or satisfaction of Litigation, claims and other liabilities that (A) are reflected or reserved against in full in the Company Financial Statements, (B) are covered by insurance policies or (C) otherwise do not involve the payment of money in excess of $150,000 in the aggregate, in each case where the settlement, compromise, discharge or satisfaction of which does not include any obligation to be performed by the Company or its Subsidiaries following the Effective Time;
(xv) enter into any Contract or arrangement between the Company or any of its Subsidiaries, on the one hand, and any Affiliates of Company (other than its Subsidiaries), on the other hand;
(xvi) fail to use reasonable best efforts to maintain in full force and effect the existing insurance policies or to replace such insurance policies with reasonably comparable insurance policies, to the extent available on commercially reasonable terms, covering the Company, its Subsidiaries and their respective properties, assets and businesses;
(xvii) form any new joint ventures or materially modify the terms of any existing joint ventures with third parties;
(xviii) amend or modify the compensation terms or any other obligations of Company contained in the engagement letter with JMP Securities LLC in a manner adverse to Company or any of its Subsidiaries or the Surviving Entity or engage other financial advisers in connection with the transactions contemplated by this Agreement;
(xix) other than in the ordinary course of business consistent with past practice, initiate or consent to (A) any material zoning reclassification of any Owned Real Property or Leased Real Property or (B) any material change to any approved site plan, special use permit, planned unit development approval or other land use entitlement affecting any Owned Real Property or Leased Real Property;
(xx) other than in the ordinary course of business consistent with past practice, enter into into, renew, modify, amend or amend in terminate, or waive, release, compromise or assign any material respect rights or claims under, any Contract;
Material Real Property Lease (viii) authorize or any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except lease for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 orreal property that, if greater, the total incurred cash reserve amount for such matter, existing as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008would be a Material Real Property Lease) or enter into any other lease of real property with a term in excess of one year;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviiixxi) other than in the ordinary course of business consistent with past practice, sell, license, mortgage, pledge, assign, transfer, dispose of, abandon, or encumber, or effect a deed in lieu of foreclosure with respect to, any Owned Real Property or other property or assets (except for Permitted Liens), in each case, with an individual value greater than $100,000 (or, in the case of Intellectual Property, that is material to the Company);
(xxii) enter into any lease new line of business;
(xxiii) (A) purchase any “non-core” asset or right (e.g., mineral rights, surface rights, multifamily or other developed residential or commercial property, real property held primarily for the purpose of resource extraction, groundwater leases or timberland assets) or any other asset or right not purchased in furtherance of the Company and its Subsidiaries’ core community development business or (B) invest or spend or commit to invest or spend any amounts with respect to such “non-core” assets other than as lessor may reasonably be required in the ordinary course of business consistent with past practice or lessee); sellto preserve the value of such assets or to prepare them for sale;
(xxiv) make, abandon authorize, enter into any commitment for, or make a capital contribution to any Joint Venture for, any new capital expenditure (such new capital expenditures being referred to hereinafter as the “Capital Expenditures”), other disposition than Capital Expenditures in the ordinary course of any business consistent with past practice for continuation of its assetsdevelopment of existing phases of Owned Real Property and JV Owned Real Property currently under construction and in an amount not to exceed, properties or businesses; grant or suffer any Lien on any in each case, 110% of its assetsthe aggregate budgeted amount for the applicable quarter as reflected in the applicable property level budget of the Company, properties or businessescopies of which are attached as Section 6.1(b)(xxiv) of the Company Disclosure Letter; or
(xixxxv) agree enter into a Contract to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Timeforegoing or make any formal or informal arrangement or understanding, the Company will timely file all reports required whether or not binding, with respect to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreementforegoing.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 5.01 Conduct of Business of by the Company Pending the Merger.
(a) Between . The Company agrees that, between the date of this Agreement and the earlier of the Effective TimeTime and the termination of this Agreement in accordance with its terms (the “Pre-Closing Period”), except as otherwise contemplated by this AgreementAgreement or as set forth in Section 5.01 of the Company Disclosure Schedule, as disclosed the Company shall and shall cause the Company Subsidiaries to conduct the businesses of the Company and the Company Subsidiaries in all material respects in the SEC Reports filed prior ordinary course of business consistent with past practice and, to the extent consistent therewith, use reasonable best efforts to (i) preserve substantially intact the business organization of the Company and the Company Subsidiaries, (ii) continue to employ the executive officers and Key Employees of the Company on commercially reasonable terms, (iii) maintain in effect all necessary licenses, permits, consents, franchises and approvals and authorizations, and (iv) maintain relationships of the Company and the Company Subsidiaries with its customers, suppliers, lenders and other persons with which the Company or any Company Subsidiary has material business relations and, subject to Section 6.06, with Governmental Authorities having jurisdiction over it business and operation, in each case substantially as favorable to the Company and the Company Subsidiaries as such relationship is as of the date of this Agreement. Except as expressly contemplated by any other provision of this Agreement, as set forth in Section 5.1 5.01 of the Company Disclosure Schedule, Schedule or as required by law or unless Parent shall otherwise applicable Law, neither the Company nor any Company Subsidiary shall, during the Pre-Closing Period, do any of the following without the prior written consent in writing (of Parent, which consent (other than with respect to (b), (c) or (e)(ii) of this Section 5.01) shall not be unreasonably withheld, delayed conditioned or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shalldelayed:
(ia) amend or otherwise change its Certificate certificate of Incorporation incorporation, bylaws or By-Laws or any other similar governing instrumentsorganizational documents;
(iib) issue, deliver, sell, pledgegrant, award, dispose of of, transfer, exclusively license, encumber (other than Permitted Liens), or encumber authorize such issuance, sale, grant, award, disposition, transfer, exclusive license or encumbrance of, (i) any shares of any class of share capital stock, ownership interests of the Company or voting securitiesany Company Subsidiary, or any Performance Units, options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stocksuch share capital, or any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments)Equity Interests, of the Company or any of its subsidiaries Company Subsidiary (except for the issuance of Shares issuable pursuant to Company Stock Options that are outstanding on the date of this Agreement pursuant to the terms of the applicable Company Stock Option as in effect immediately prior to the date of this Agreement), or (ii) any of its material properties, assets, licenses, operations, rights, product lines, businesses or interests therein (including Intellectual Property) except, in the case of clause (ii), (A) in the issuance ordinary course of Common Shares upon the exercise of Options or business, (B) pursuant to Contracts as in connection with other stock-based awards outstanding as of force on the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (BC) issuances in accordance with such dispositions among the Rights Plan)Company and the Company Subsidiaries;
(iiic) declare, set aside, make or pay any dividend or other distribution, payable in cash, stockshares, property or otherwise, with respect to any of its capital stock (share capital, except for dividends or other distributions by any dividend direct or distribution by a subsidiary of the indirect wholly-owned Company Subsidiary to the Company or another wholly any other direct or indirect wholly-owned subsidiary of the Company)Company Subsidiary and regular semiannual dividends on Shares declared in cash at times and in amounts consistent with past practice;
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire acquire, directly or indirectly, any shares of share capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a any Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesSubsidiary;
(vi) make any acquisition of acquire (whether including by amalgamation, merger, consolidation consolidation, or acquisition of stock equity interests or substantially all of the assets)assets or any other business combination) any company, or make any investment in any interest in, any corporation, partnership or partnership, other business organization (or any division thereof;
), (vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ixii) except for borrowings under the Company’s existing credit facilitiesfacilities as in effect immediately prior to the date of this Agreement, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, (iii) enter into, amend, waive, renew or make terminate any loans, advances Material Contract (or capital contributions to any other person (other than Contract that would be deemed to be a subsidiary Material Contract if it had been entered into prior to the date of the Companythis Agreement), in each case, other than in the ordinary course of business consistent business, or (iv) authorize, or make any commitment with past practicerespect to, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except capital expenditures that in the ordinary course aggregate exceed by 10% the aggregate amount of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 annual capital expenditures budget of the Company Disclosure Schedule;
and the Company Subsidiaries, taken as a whole (xi) make any change in any accounting principlesa copy of which has been previously provided to Parent, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refundbusiness);
(xiiif) settle except as otherwise required under any plan, program, policy, agreement, collective bargaining agreement or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, arrangement in existence as of the date of this Agreement, maintained by (i) increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases in base salary or wages in the ordinary course of business, (ii) grant or take any action to accelerate the vesting or payment of any equity awards or retention, severance or termination pay to, or enter into any employment, bonus, indemnification, change of control or severance agreement with, any director, officer or other employee of the Company on or of any Company Subsidiary, except for the award of cash bonus incentive awards containing all of terms, and made in accordance with, the provisions set forth in subparagraph (f) of Section 5.01 of the Company Balance Sheet at March 31Disclosure Schedule, 2008(iii) establish, adopt, enter into, terminate or amend any Plan, or establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement, for the benefit of any director, officer or employee except as required by Law, (iv) loan or advance any money or other property to any current or former director, officer or employee of the Company or the Company Subsidiaries or (v) enter into any collective bargaining agreement, memoranda of understanding, side letter agreements or other Contract with any labor organization, or amend any of the foregoing;
(xivg) waive fail to maintain in full force and effect the existing insurance policies (or alternative policies with comparable terms and conditions) covering the Company and the Company Subsidiaries and their respective properties, assets and businesses;
(h) settle any Action other than settlements involving not more than $500,000 in the aggregate (net of insurance proceeds) and that do not require any actions or impose any material restrictions on the business or operations of the Company and the Company Subsidiaries (or, after the Effective Time, of Parent or any of its Affiliates);
(i) make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, file any material amended Tax Return, enter into any material closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a refund of value a material amount of Taxes or (ii) file any U.S. federal income Tax Return relating to the Company or any subsidiary of the CompanyCompany Subsidiaries that has been prepared in a manner that is inconsistent with the past practices of the Company or such Company Subsidiary, provided that, the Company will not file any U.S. federal income Tax Return without providing Parent with a draft form of such Tax Return at least fifteen (15) Business Days before filing to the extent then available or, if not then available, as promptly as practicable once available;
(xvj) adopt except as required by GAAP, applicable Law or any Governmental Authority, make any material change in financial accounting methods, principles or practices used by the Company or any Company Subsidiary;
(k) authorize or adopt, or publicly propose, a plan or agreement of complete or partial liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization dissolution of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;Subsidiary; or
(xvil) except as may be required by generally accepted accounting principlesagree, revalue any portion of its assetsresolve, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practiceannounce an intention, enter into any lease (as lessor formal or lessee); sellinformal agreement or otherwise make a commitment, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 4.1 Conduct of Business of by the Company Companies Pending the Merger.
(a) Between . During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, except as otherwise contemplated by this Agreementeach Company covenants and agrees that, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent agree in writing (which consent writing, such Company shall conduct its business only in, and such Company shall not be unreasonably withheldtake any action except in, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business business; and the such Company shall use its reasonable best commercial efforts to (i) preserve substantially intact its business organization, (ii) pay its trade payables and material business relationshipsother liabilities in accordance with their terms as they became due, (Biii) collect its receivables and other claims in full in accordance with their terms, as they become due, (iv) keep available the services of each of its present officers, employees and consultants, (v) take all reasonable action in the ordinary course of business necessary to prevent the loss, cancellation, abandonment forfeiture or expiration of any Company shall perform Intellectual Property, and (vi) preserve each of its obligations under present relationships with customers, suppliers and other persons with which such Company has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, neither of the Companies shall, during the period from the date of this Agreement and (C) without limiting continuing until the foregoingearlier of the termination of this Agreement or the Effective Time, neither the Company nor directly or indirectly do, or propose to do, any of its subsidiaries shallthe following without the prior written consent of Parent:
(ia) amend or otherwise change its Certificate Articles of Incorporation or By-Laws or any similar governing instrumentsLaws;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of its capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind (including Stock Purchase Rights) to acquire or receive any shares of its capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), interest) of either of the Company Companies;
(c) sell, lease, assign, transfer, pledge, dispose of or encumber any of its subsidiaries assets (whether real, personal or intellectual property) (except for (Ai) sales of assets in the issuance ordinary course of Common Shares upon the exercise business; and (ii) dispositions of Options obsolete or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Planworthless assets);.
(iiii) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property (ii) split, combine or otherwise, with respect to reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (except iii) amend the terms of, repurchase, redeem or otherwise acquire for value, any dividend of its securities, or distribution by a subsidiary propose to do any of the Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ive) reclassifysell, combinetransfer, splitlicense, subdivide, redeem, purchase sublicense or otherwise acquire dispose of any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan)Intellectual Property Rights, or reclassifyamend or modify any existing agreements with respect to any Company Intellectual Property Rights or Third Party Intellectual Property Rights, combine, split or subdivide any capital stock or other ownership interests than nonexclusive licenses in the ordinary course of any of the Company’s subsidiariesbusiness;
(vi) make any acquisition of acquire (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or other business organization or division thereof;
; (viii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or representing the deferred purchase price of any property or assets or issue debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loansloans or advances to or investments in any person, advances except in the ordinary course of business; (iii) create, incur, assume or capital contributions suffer to exist, any other person mortgage, lien, pledge, charge, security interest or encumbrance of any kind or nature upon its property or assets, income or profits, whether now owned or hereafter acquired; (other than a subsidiary of the Company)iv) assume, guarantee, endorse or otherwise in each caseanyway be or become responsible or liable for, directly or indirectly, any contingent obligation; (v) enter into or amend any contract or agreement other than in the ordinary course of business consistent with past practicebusiness; (vi) authorize any capital expenditures or purchase of fixed assets which are, pursuant in the aggregate, in excess of $10,000 for the Companies, taken as a whole; (vii) enter into any agreement or become liable under any agreement for the lease, hire or use of any real or personal property; or (viii) enter into or amend any contract, agreement, commitment or arrangement to letters effect any of credit or otherwisethe matters prohibited by this Section 4.1(f);
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Ag) increase the compensation payable or fringe benefits of to become payable to any of its directors, their officers or employees (except for such increases as may be set forth in the ordinary course employment agreements for each of business with respect to employees who are not directors the Holders attached hereto as Exhibits A-C) or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting employment or severance agreement or arrangement with with, any of its present or former directorsdirector, officers officer or other employeesemployee of either of the Companies, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or Plan;
(Eh) pay or become obligated to pay take any bonusaction, severance or other amounts to any officer or employee other than as set forth in Section 3.24 required by GAAP, to change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of the Company Disclosure Scheduleaccounts payable and collection of accounts receivable);
(xii) make any change in material Tax election inconsistent with past practices or settle or compromise any accounting principlesmaterial, federal, state, local or foreign tax liability or agree to an extension of a statute of limitations for any assessment of any Tax, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect theretothe extent the amount of any such settlement has been reserved for on the Balance Sheet of such Company;
(xiij) pay, discharge or satisfy any principal of any debt with a maturity of more than one year, for borrowed money or for the deferred purchase price of property or services, except at the stated maturity of such debt or as required by mandatory prepayment provisions relating thereto (subject to any subordination provisions applicable thereto); or amend any provision pertaining to the subordination or the terms of payment of any debt;
(k) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) other than debt with a maturity of more than one year for borrowed money or for the deferred purchase price of property or services, other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company reserved against on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the such Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than incurred in the ordinary course of business consistent with past practicebusiness;
(xviil) materially change any of its business policies;
liquidate or dissolve itself (xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties liquidation or businessesdissolution); or
(xixm) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.1(a) through Section 5.1(a)(xviii).
(bl) Between above, or any action which would make any of the date representations or warranties contained in Article 2 of this Agreement and untrue or incorrect or prevent either Company from performing or cause either Company not to perform its covenants hereunder or result in any of the Effective Time, conditions to the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties Merger set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreementherein not being satisfied.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 5.01. Conduct of Business of by the Company Pending the Merger.
(a) Between . The Company agrees that, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date any other provision of this Agreement, Agreement or as set forth in Section 5.1 5.01 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing writing:
(which consent shall not be unreasonably withheld, delayed or conditioned), (Aa) the business businesses of the Company and its subsidiaries Subsidiaries shall be conducted in 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; and
(b) the Company shall use its commercially reasonable best efforts to preserve substantially intact its the business organization, and material business relationships, (B) organization of the Company shall perform its obligations under 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. Except as expressly contemplated by any other provision of this Agreement, and (C) without limiting Agreement or as set forth in Section 5.01 of the foregoingCompany Disclosure Schedule, neither the Company nor any Subsidiary shall, between the date of its subsidiaries shallthis Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its Certificate of Incorporation or By-Laws laws or any similar governing instrumentsequivalent organizational documents;
(iib) issue, deliver, sell, pledge, dispose of of, grant or encumber encumber, or authorize such issuance, sale, pledge, disposition, grant, or encumbrance of:
(i) any shares of any class of capital stock, ownership interests stock of the Company or voting securitiesany Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instrumentsinterest), of the Company or any of its subsidiaries Subsidiary (except for (A) the issuance of Common Shares upon issuable pursuant to employee stock options outstanding on the exercise date of Options or this Agreement and granted under Company Stock Option Plans in connection with other stock-based awards outstanding as of effect on the date of this Agreement); or
(ii) any assets of the Company or any Subsidiary, except in each case, the ordinary course of business and in accordance a manner consistent with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)past practice;
(iiic) 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 any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company)stock;
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options acquire, directly or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan)indirectly, or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesits capital stock;
(vi) make any acquisition of acquire (whether including, without limitation, by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), assets or make any investment in any interest in, other business combination) any corporation, partnership or partnership, other business organization or any division thereofthereof or any significant amount of assets;
(viii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) issue any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any personPerson, or make any loans, advances loans or capital contributions advances; or
(iii) enter into or amend any contract or agreement with respect to any other person (other than a subsidiary of the Companymatter set forth in this Section 5.01(e), in each case, other than in the ordinary course of business and consistent with past practice, pursuant to letters of credit or otherwise;
(xi) except to the extent required under hire any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or additional employees (except other than in the ordinary course of business with respect business, except (A) to employees who are not directors or officers), fill vacancies arising after the date of this Agreement; (B) grant any severance to hire non-executive employees for the Company's Beijing office; or termination pay not provided for under any Employee Benefit Plan, (C) enter into to meet increased production demand.
(ii) make any employment, consulting offers to any employee of an employment position other than the employment position he or severance agreement or arrangement with any of its present or former directors, officers or other employeesshe currently holds, except for offers of an employment position made in the ordinary course of business and consistent with past practice in connection with the promotion or demotion of any employee of the Company or any of its Subsidiaries who is not a director or officer of the Company;
(iii) 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 of its Subsidiaries who are not directors or officersofficers of the Company;
(iv) except as set forth in Section 5.01 of the Company Disclosure Schedule, grant any loan, advance, extensions of credit to current or former employees or forgiveness or deferral of any loans due from any employee, other than any loan, advance or extension of credit to a current employee in circumstances and in amounts consistent with past practice, in any event not to exceed $10,000 for any one employee and $25,000 in the aggregate;
(Dv) establish, adopt, enter into into, terminate or amend in any material respect or terminate any Employee Benefit Plan or (E) pay establish, adopt or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement plan, agreement, program, policy, trust, fund or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim other arrangement that would be a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, Plan if greater, the total incurred cash reserve amount for such matter, it were in existence as of the date of this AgreementAgreement for the benefit of any director, maintained officer or employee except as required by this Agreement or the Company on Transactions contemplated hereby, or as required by ERISA, the Company Balance Sheet at March 31, 2008Code or to otherwise comply with applicable Law;
(xivvi) waive grant any right of value material to equity or equity based awards (provided that equity awards may be transferred in accordance with the Company applicable plan document or any subsidiary of the Companyagreement);
(xvg) adopt a plan of liquidation enter into, amend or resolutions providing for modify in any material respect, or consent to the liquidationtermination of, dissolutionany Material Contract, mergeror amend, consolidation waive or other reorganization of modify in any material respect, or consent to the Company termination of, the Company's or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, Subsidiary's rights thereunder other than in the ordinary course of business consistent with past practice;
(xviih) materially fail to make in a timely manner any material filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(i) change any Tax election, annual tax accounting period, or method of tax accounting, file amended Tax Returns or claims for Tax refunds by the Company or its Subsidiaries, enter into a closing agreement relating to Taxes or any settlement of any Tax claim, audit or assessment;
(j) make any changes in its accounting methods, principles or practices currently in effect, except as required by changes in GAAP or by Regulation S-X under the Exchange Act, in each case as concurred in by its independent public accountants;
(k) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its business policiesSubsidiaries (other than the Transactions);
(xviiil) other than except as required by applicable Law or GAAP, revalue in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of material respect any of its assets, properties including writing down the value of inventory in any material manner, or businesses; grant writing-off notices or suffer accounts receivable in any Lien on any of its assets, properties or businessesmaterial manner; or
(xixm) authorize, agree or commit to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Sources: Merger Agreement (Pure World Inc)
Conduct of Business Pending the Merger. Section 5.1 SECTION 5.01. Conduct of Business of the Company by CBS Pending the Merger.
(a) Between . CBS covenants and agrees that, between the date of this Agreement and the Effective Time, except (w) as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, Agreement or as set forth in Section 5.1 5.01 of the Company CBS Disclosure Schedule, (x) as required by law or unless Parent Viacom shall otherwise consent agree in writing (advance in writing, which consent agreement shall not be unreasonably withheld, delayed withheld or conditioned)delayed, (Ay) for actions taken in connection with the consummation of the acquisitions of King World, Outdoor Systems, Inc. and ▇▇▇▇▇▇▇ Entertainment Company (the "Pending Transactions") on substantially the same terms that have heretofore been agreed between such parties or on such other terms and conditions which would not be reasonably likely to have an impact that is both material and detrimental to Circle and its subsidiaries, taken as a whole, unless Viacom shall have consented thereto, such consent not to be unreasonably withheld or delayed, and (z) for the exercise of options, warrants and similar securities which would otherwise expire prior to the Effective Time, or the exercise of any put rights, call rights, rights of first refusal and other similar rights, in each case under agreements in existence on the date of this Agreement and otherwise in accordance with the terms of this Agreement, the business of the Company CBS and its subsidiaries shall be conducted in only in, and CBS and its subsidiaries shall not take any action except in, the ordinary course of business and the Company in a manner consistent with past practice; and CBS and its subsidiaries shall use its their reasonable best efforts to preserve substantially intact its CBS's business organization, to keep available the services of the current officers, employees and material consultants of CBS and its subsidiaries (provided that the foregoing covenant to use reasonable best efforts shall not require CBS to offer retention bonuses to such individuals) and to preserve the current relationships of CBS and its subsidiaries with customers, distributors, dealers, suppliers and other persons with which CBS and its subsidiaries have significant business relationshipsrelations. By way of amplification and not limitation, (B) between the Company shall perform its obligations under date of this AgreementAgreement and the Effective Time, CBS will not do, and (C) without limiting the foregoing, neither the Company nor will not permit any of its subsidiaries shallto do, directly or indirectly, any of the following except in compliance with the exceptions listed above:
(ia) amend or otherwise change its Certificate the Articles of Incorporation or By-Laws laws of CBS or any similar governing instrumentsCBS subsidiary other than Infinity if such amendment or change would have a CBS Material Adverse Effect;
(iib) issue, deliver, sell, pledge, dispose of of, grant, encumber, or encumber authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of its or its subsidiaries' capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of its or its subsidiaries' capital stock, stock or any other ownership interests or any voting securities interest (including but not limited to stock appreciation rights, any phantom stock or similar instrumentsinterest), of the Company CBS or any of its subsidiaries (except for (A) for the issuance of Shares issuable pursuant to CBS Options or shares of Infinity common stock pursuant to Infinity stock options outstanding on the date hereof, (B) for the issuance of options, and other stock grants of CBS or Shares which do not provide for accelerated vesting in connection with the Merger and the other transactions contemplated by this Agreement (except as permitted under any severance arrangement established by CBS in accordance with Section 6.16 hereof or with respect to 1,200,000 options to be issued to two senior executives of Kingworld upon its acquisition by CBS), (x) to purchase a maximum of 5,000,000 Shares, (y) to purchase a maximum of 17,200,000 Shares as set forth in Section 5.01 of the CBS Disclosure Schedule and (z) to purchase a maximum of 12,500,000 shares of Infinity common stock as set forth in Section 5.01 of the CBS Disclosure Schedule, in each case in the ordinary course of business consistent with past practice and allocated to persons who are officers, employees, directors, independent contractors and production company writers and talent of CBS or Infinity, as applicable, or any of their respective subsidiaries (including past practice of any such subsidiary before its acquisition by CBS) and (C) the issuance of Common Shares upon the exercise shares of Options or CBS and Infinity stock in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, Pending Transactions) or (Bii) issuances any assets material to CBS and its subsidiaries, taken as a whole, except for sales in accordance the ordinary course of business and in a manner consistent with the Rights Plan)past practice;
(iiic) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its or its subsidiaries' capital stock (except for other than cash dividends payable by any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned CBS subsidiary to another CBS subsidiary or CBS and other than dividends made or paid by Infinity, so long as the aggregate amount of the Company)such dividends paid by Infinity shall not exceed $500,000,000;
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, purchase or otherwise acquire acquire, directly or indirectly, any shares of its or its subsidiaries' capital stock of the Company stock;
(i) except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or Pending Transactions and in connection with acquisitions which individually do not exceed $200,000,000 and in the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
aggregate do not exceed $1,000,000,000 (vA) make any acquisition of acquire (whether including by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or otherwise make any investment in any interest in, any corporation, partnership or partnership, limited liability company, other business organization or any division thereof;
(vi) sell , or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
amount of assets; or (viiiB) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or issue any debt securities, assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, agree to amend or otherwise modify in any manner any agreement or instrument pursuant to which CBS has incurred indebtedness, or make any loans, advances loans or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employeesadvances, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors practice, except the refinancing of existing indebtedness, borrowings under commercial paper programs in the ordinary course of business or officersborrowings under existing bank lines of credit in the ordinary course of business, (Dii) enter into any material contract, agreement or transaction, other than (X) in the ordinary course of business, and (Y) which would not be reasonably likely to prevent or materially delay the consummation of the Merger, (iii) authorize any capital expenditures which are, in the aggregate, in excess of the amounts currently budgeted for the fiscal year 1999 (including the applicable 1999 capital expenditures of the companies subject to the Pending Transactions) and, with respect to fiscal year 2000, 10% in excess of such amount, in each case for CBS and its subsidiaries taken as a whole or (iv) enter into or amend any contract, agreement, commitment or arrangement which would require CBS to take any action prohibited by this subsection (e) and will, or will cause Infinity to, not amend in any material respect, or waive any material right or condition under or relating to the definitive agreements relating to the Pending Transactions, in each case except for any such amendment or waiver the impact of which would not be reasonably likely to be both material and detrimental to CBS and its subsidiaries, taken as a whole;
(f) increase the compensation payable or to become payable to its executive officers or employees, except as set forth in Section 6.16 or as required by Law or by the terms of any collective bargaining agreement or other agreement currently in effect between CBS or any subsidiary of CBS and any executive officer or employee thereof and 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 director or executive officer of it or any of its subsidiaries, or establish, adopt, enter into or amend in any material respect or terminate take action to accelerate any Employee Benefit Plan rights or (E) pay or become obligated to pay benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other amounts to plan, agreement, trust, fund, policy or arrangement for the benefit of any director, executive officer or employee other than as set forth in Section 3.24 employee, provided that this clause shall not prevent any CBS subsidiary from (i) entering into employment contracts with newly-hired or promoted executive officers, or from making severance payments, on terms substantially consistent with the contractual arrangements currently existing at such subsidiary or (ii) providing for the payment of severance to executive officers or employees on terms substantially consistent with the Company Disclosure Schedulepast practices of such subsidiary (including past practice preceding such subsidiaries' acquisition by CBS);
(xig) make any change in any accounting principles, material respect (except as may be appropriate to conform to required by the SEC or changes in statutory or regulatory accounting rules or United States generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of which become effective after the date of this Agreement) any accounting policies, maintained by the Company on the Company Balance Sheet at March 31, 2008practices or procedures;
(xivh) waive make any right of value material to the Company tax election that, individually or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change aggregate, would have a CBS Material Adverse Effect or settle or compromise any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businessesmaterial Tax liability; or
(xixi) agree enter into any contract, agreement, lease, license, permit, franchise or other instrument or obligation which if in existence and known to take any CBS prior to the date of this Agreement would have resulted in a breach of Section 3.05, except to the extent the conflict, violation, breach, default or occurrence of the actions described type referred to therein giving rise to such breach would not have a CBS Material Adverse Effect; provided, that Infinity shall not be prohibited from taking any action under this Section 5.01 which the Board of Directors of Infinity determines is required to be taken in Section 5.1(a)(i) through Section 5.1(a)(xviiithe exercise of the Board's fiduciary duties to the stockholders of Infinity (other than CBS).
(b) Between SECTION 5.02. Conduct of Business by Viacom Pending the Merger. Viacom covenants and agrees that, between the date of this Agreement and the Effective Time, except (w) as contemplated by this Agreement or as set forth in Schedule 5.02 of the Company will timely file all reports required Viacom Disclosure Schedule, (x) as CBS shall otherwise agree in advance in writing, which agreement shall not be unreasonably withheld or delayed (y) for the exercise of options, warrants and similar securities which would otherwise expire prior to be filed the Effective Time, or the exercise of any put rights, call rights, rights of first refusal and other similar rights, in each case under all United States securities laws agreements in existence on the date of this Agreement and regulations otherwise in accordance with the terms of this Agreement and (z) an exchange offer of Blockbuster shares owned by Viacom for shares of Viacom Class B Common Stock owned by the American Stock Exchange.
stockholders of Viacom (cthe "Split-off") Between in accordance with the procedures set forth in Section 5.02 of the Viacom Disclosure Schedule, the business of Viacom and its subsidiaries shall be conducted only in, and Viacom and its subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and Viacom and its subsidiaries shall use their reasonable best efforts to preserve substantially intact Viacom's business organization, to keep available the services of the current officers, employees and consultants of Viacom and its subsidiaries (provided that the foregoing covenant to use reasonable best efforts shall not require Viacom to offer retention bonuses to such individuals) and to preserve the current relationships of Viacom and its subsidiaries with customers, distributors, suppliers and other persons with which Viacom and its subsidiaries have significant business relations. By way of amplification and not limitation, between the date of this Agreement and the Effective Time, the Company shall notViacom will not do, and shall cause each will not permit any of is its subsidiaries not toto do, directly or indirectly, take any action of the following except in compliance with the exceptions listed above:
(a) amend or otherwise change the Certificate of Incorporation or By-laws of Viacom or Blockbuster, or any other Viacom subsidiary if such amendment or change would have a Viacom Material Adverse Effect;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) to cause any shares of its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that wouldits subsidiaries' capital stock, or would reasonably be expected toany options, individually warrants, convertible securities or other rights of any kind to acquire any shares of its or its subsidiaries' capital stock or any other ownership interest (including any phantom interest), of Viacom or any of its subsidiaries (except (A) for the issuance of Shares issuable pursuant to Viacom Options outstanding on the date hereof and (B) for the issuance of options, which do not provide for accelerated vesting or other consequences in the aggregate, prevent, materially delay or materially impede the consummation of connection with the Merger or and the other transactions contemplated by this Agreement., to purchase a maximum of 6,000,000 shares of Viacom Class B Common Stock in the ordinary course of business consistent with past practice and allocated to persons who are officers, employees, directors, independent contractors and production company writers and talent of Viacom or any of its subsidiaries on a basis substantially consistent with past practice), or (ii) any assets material to Viacom and its subsidiaries, taken as a whole, except for sales 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 or its subsidiaries' capital stock other than cash dividends payable by any wholly owned Viacom subsidiary to another Viacom subsidiary or Viacom, other than dividends made or paid by Blockbuster, so long as the aggregate amount of such dividends paid by Blockbuster shall not exceed $50,000,000;
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its or its subsidiaries' capital stock;
(i) except in connection with acquisitions which individually do not exceed $200,000,000 and in the aggregate do not exceed $1,000,000,000 (A) acquire (including by merger, consolidation, or acquisition of stock or assets), or otherwise make any investment in, any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets; or (B) incur any indebtedness for borrowed money, issue any debt securities, assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, agree to amend or otherwise modify in any manner any agreement or instrument pursuant to which Viacom has incurred indebtedness, or make any loans or advances, except in the ordinary course of business and consistent with past practice, except the refinancing of existing indebtedness, borrowings under commercial paper programs in the ordinary course of business or borrowings under existing bank lines of credit in the ordinary course of business, (ii) enter into any contract, agreement or transaction, other than (X) in the ordinary course of business, consistent with past practice and (Y) which would not be reasonably likely to prevent or materially delay the consummation of the Merger, (iii) authorize any capital expenditures which are, in the aggregate, in excess of the amount currently budgeted therefor (and previously disclosed to CBS) for the fiscal year ending December 31, 1999, and, with respect to fiscal year December 31, 2000, 10% in excess of such amount, in each case for Viacom and its subsidiaries taken as a whole or (iv) enter into or amend any contract, agreement, commitment or arrangement which would require Viacom to take any action prohibited by this subsection (e);
(f) increase the compensation payable or to become payable to its executive officers or employees, except as required by Law or by the terms of any collective bargaining agreement or other agreement currently in effect between Viacom or any subsidiary of Viacom and any executive officer or employee thereof and except for increases in the ordinary course of business in accordance with past practices, or grant any severan
Appears in 1 contract
Sources: Merger Agreement (Viacom Inc)
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between The Company covenants and agrees that, except as contemplated by this Agreement, between the date of this Agreement and the Effective Time, except as unless the Buyer shall otherwise contemplated by this Agreementagree in writing, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 Business of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted only in its the Company, and the Company shall not take any action except in, the usual, regular and ordinary course of business and the Company will generally conduct its business in substantially the same way as heretofore conducted, and without limiting the foregoing, the Company will continue to operate in the same geographic markets serving the same market segments. The Company shall use its reasonable best efforts to preserve substantially intact the business organization of the Company, to keep available the present services of the officers, employees and consultants of the Company and to preserve the current relationships and goodwill of the Company with customers, suppliers and other persons with which the Company has business relationships. Without limiting the generality of the foregoing, the Company shall:
(i) maintain in full force and effect all contracts of insurance and indemnity specified in any Schedule hereto;
(ii) repair and maintain all of its tangible properties and assets in accordance with its usual and ordinary repair and maintenance standards;
(iii) continue to apply in full the same rigorous credit review process used by the Company prior to the Closing in determining the extent to which it will extend credit to customers or potential customers in the ordinary course of business;
(iv) notify the Buyer of any material emergency or other material change in the operation of its business organizationor properties and of any governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated).
(b) By way of amplification and material business relationshipsnot limitation of clause (a) above, (B) the Company shall perform its obligations under not between the date of this AgreementAgreement and the Effective Time, and (C) without limiting the foregoingdirectly or indirectly do, neither the Company nor or publicly announce an intention to do, any of the following without the prior written consent of Buyer through one of its subsidiaries shall:authorized representatives (which representatives shall be each of its Chief Executive Officer, President and Chief Financial Officer):
(i) amend or otherwise change its Certificate of Incorporation Organizational Documents or By-Laws laws or any similar governing instrumentsequivalent organizational documents;
(ii) issue, deliver, sell, pledge, dispose of, grant, encumber, or authorize the issuance, delivery, sale, pledge, disposition, grant or encumbrance of, any Equity Interests of or encumber any shares of capital stock, ownership interests or voting securitiesthe Company, or any options, warrants, convertible securities or other rights of any kind to acquire any such Equity Interests, or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments)interest, of the Company Company, or enter into any agreement with respect to any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or foregoing, other than in connection with other stock-based awards outstanding as the Stock Warrant Agreement and upon exercise of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)Options;
(iii) declare, set aside, make or pay any distribution (by way of dividend or other distribution, payable in cash, stock, property or otherwise, ) with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company)Equity Interests;
(iv) reclassify, combine, split, subdividecombine or reclassify any of its Equity Interests or issue or authorize or propose the issuance of any other securities in respect of, redeem, purchase or otherwise acquire any shares in lieu of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariessubstitution for its Equity Interests;
(v) make repurchase, redeem or otherwise acquire any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all Equity Interests of the assets)Company, or make any investment in securities convertible into or exercisable for any interest in, any corporation, partnership or other business organization or division thereofof the Equity Interests of the Company;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) enter into any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course new line of business or pursuant to existing Contractsmaterially expand the business currently conducted by the Company;
(vii) acquire or agree to acquire, by merging or consolidating with, or by purchasing an equity interest in or a portion of the assets of, or by any other than in the ordinary course of manner, any business consistent with past practiceor any corporation, enter into partnership, other business organization or amend in any division thereof or any material respect any Contractamount of assets;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, increase the aggregate amounts owed under the Company's existing credit facilities or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any personindividual, corporation or other entity, or make any loansloan or advance;
(ix) lower or otherwise alter its credit card fraud review process (as more fully described in Exhibit 6.01);
(x) authorize any capital expenditures of more than $25,000 in the aggregate approved by Buyer);
(xi) (A) (x) adopt, advances amend, renew or capital contributions to terminate any plan or any agreement, arrangement, plan or policy between the Company and one or more of its current or former directors, officers or employees, or (y) increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan or agreement as in effect as of the date hereof (including, without limitation, the granting of stock options, stock appreciation rights, restricted stock, restricted stock units or performance units or shares); or (B) enter into, modify or renew any employment, severance or other person (other than a subsidiary agreement with any director, officer or 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, termination, severance, retention or other plan, agreement, trust, fund, policy or arrangement providing for any benefit to any director, officer or employee;
(xii) pay any bonus or any compensation other than base compensation, except for payments of bonuses and other incentive compensation to sales personnel pursuant to and consistent with the written sales incentive plan which has been provided to and approved by Buyer;
(xiii) take any action with respect to accounting methods, principles or practices, other than changes required by applicable law or GAAP or regulatory accounting as concurred in by the Company's independent accountants;
(xiv) make any tax election or settle or compromise any federal, state, local or foreign tax liability;
(xv) pay, discharge or satisfy any claim, liability or obligation, other than the payment, discharge or satisfaction, in each casethe ordinary course of business and consistent with past practice;
(xvi) sell, lease, encumber, assign or otherwise dispose of, or agree to sell, lease, encumber, assign or otherwise dispose of, any of its material assets, properties or other rights or agreements;
(xvii) take any action that is intended or reasonably can be expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect, or any of the conditions to the consummation of the Merger and the other transactions contemplated by this Agreement set forth in Article IX not being satisfied in any material respect, or in any material violation of any provision of this Agreement;
(xviii) enter into or renew, amend or terminate, or give notice of a proposed renewal, amendment or termination of or make any commitment with respect to, (A) any contract, agreement or lease for office space or operations space to which the Company is a party or by which the Company or its properties is bound; (B) any lease, contract or agreement other than in the ordinary course of business consistent with past practicepractice including renewals of leases to existing tenants of the Company ; (C) regardless of whether consistent with past practices, pursuant any lease, contract, agreement or commitment involving an aggregate payment by or to letters the Company of credit more than $10,000 or otherwiserequiring performance by the Company of any obligations at any time more than one year after the time of execution;
(xxix) except enter into an agreement, contract, or commitment that, if entered into prior to the extent date hereof, would be required under to be listed on a Schedule delivered to Buyer pursuant to the terms of this Agreement, including without limitation, any Employee Benefit Plan arrangement or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business contract with respect to employees who are not directors web site development or officers)operations; marketing, promotion, affiliate and advertising, including search engine referrals and Internet private labeling; fulfillment operations; or telephone, credit card or freight carrier services;
(Bxx) grant amend, terminate or change in any severance material respect any lease, contract, undertaking, arrangement or termination pay not provided for under other commitment listed in any Employee Benefit PlanSchedule (including without limitation its arrangements and contracts with respect to web site development and operations; marketing, promotion, affiliate and advertising, including search engine referrals and Internet private labeling; fulfillment operations; and telephone, credit card or freight carrier services) or knowingly do any act or omit to do any act, or permit an act or omission to act, that will cause a breach of any such lease, contract, undertaking, arrangement or other commitment;
(Cxxi) change its pricing policies or its policies with respect to freight rates charged to customers;
(xxii) enter into any employment, consulting or severance agreement or arrangement transaction with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businessesan Insider; or
(xixxxiii) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Sources: Merger Agreement (Pc Connection Inc)
Conduct of Business Pending the Merger. Section 5.1 SECTION 5.01 Conduct of Business of by the Company Pending the Merger.
(a) Between Merger The Company agrees that, between the date of this Agreement and the Effective Time, except as otherwise expressly contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date any other provision of this Agreement, Agreement or as set forth in Section 5.1 5.01 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing writing:
(which consent shall not be unreasonably withheld, delayed or conditioned), (Ai) the business businesses of the Company and its subsidiaries Subsidiaries shall be conducted in 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; and
(ii) the Company shall use its all reasonable best efforts to preserve substantially intact its the business organizationorganization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and material 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 relationships, relations. From the date of this Agreement until the earlier of (Bi) the Company shall perform its obligations under this Agreement, Effective Time and (Cii) without limiting the foregoingtermination of the Agreement, neither the Company nor any Subsidiary shall, directly or indirectly, do, or propose to do, any of its subsidiaries shallthe following without the prior written consent of Parent and except as otherwise expressly contemplated herein:
(ia) amend or otherwise change its Certificate of Incorporation or By-Laws laws or any similar governing instrumentsequivalent organizational documents;
(iib) issue, deliver, sell, pledge, dispose of of, grant or encumber encumber, or otherwise subject to any Lien, or authorize such issuance, sale, pledge, disposition, grant or encumbrance of, or subjection to, any such Lien, (i) any shares of any class of capital stock, ownership interests stock of the Company or voting securitiesany Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instrumentsinterest), of the Company or any of its subsidiaries Subsidiary (except for (A) the issuance of Common Shares upon issuable pursuant to employee stock options outstanding on the exercise date of Options or this Agreement and granted under Company Stock Option Plans in connection with other stock-based awards outstanding as of effect on the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, ) or (Bii) issuances any assets of the Company or any Subsidiary, except in accordance the ordinary course of business and in a manner consistent with the Rights Plan)past practice and except for Liens in favor of Parent or Purchaser;
(iiic) 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 (stock, except for any dividend or distribution the declaration and payment of dividends by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company)Subsidiary solely to its parent corporation;
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options acquire, directly or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan)indirectly, or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesits capital stock;
(vi) make any acquisition of acquire (whether including, without limitation, by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), assets or make any investment in any interest in, other business combination) any corporation, partnership or partnership, other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell any significant amount of assets; (ii) incur any indebtedness, whether secured or dispose of any assets, other than sales unsecured and whether under a new or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur facility (except borrowings from Parent or modify in Purchaser) or issue any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loansloans or advances; (iii) enter into any contract or agreement other than in the ordinary course of business and consistent with past practice; (iv) authorize, advances or make any commitment with respect to, any capital expenditure which is not specifically referred to in the capital expenditure budget attached hereto as Section 5.01(e) of the Company Disclosure Schedule (the "Company Capital Budget") or, to the extent not included in the Company Capital Budget, any single capital expenditure in excess of $10,000 or capital contributions expenditures in the aggregate in excess of $100,000; or (v) enter into or amend any contract, agreement, commitment or arrangement with respect to any other person matter set forth in this Section 5.01(e);
(i) hire any additional employees except to fill current vacancies or vacancies arising after the date of this Agreement, (ii) make any offers to any employee of an employment position other than the employment position he or she currently holds, except for offers of an employment position made in the ordinary course of business and consistent with past practice in connection with the promotion or demotion of any employee of the Company or any of its Subsidiaries who is not a subsidiary director or officer of the Company, (iii) 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 of its Subsidiaries who are not directors or officers of the Company, (iv) grant any new or additional retention, severance or termination pay to, or enter into any new or additional employment, bonus, change of control or severance agreement with, any director, officer or other employee of the Company or of any of its Subsidiaries, (v) establish, adopt, enter into, terminate or amend any Plan or establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement for the benefit of any director, officer or employee except as required by this Agreement or the Transactions contemplated hereby, or as required by ERISA, the Code or to otherwise comply with applicable Law, (vi) loan or advance money or other property to any current or former director, officer or employee of the Company or any of its Subsidiaries, (vii) grant any equity or equity based awards (provided that equity awards may be transferred in accordance with the applicable plan document or agreement) or (viii) hire or engage any consultant to perform services for a rate of compensation which would be in excess of $25,000 on an annual basis or which is not terminable upon notice of 30 days or less;
(g) effectuate a "plant closing" or "mass layoff," as those terms are defined in WARN (determined without regard to terminations of employment occurring on or after the Effective Time);
(h) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice and other than actions required to be taken in response to changes in GAAP or in Law, with respect to accounting policies or procedures;
(i) make, revoke or change any material Tax election or material method of Tax accounting, file any amended Tax Return (unless required by Law), enter into any closing agreement relating to a material amount of Taxes, settle or compromise any material liability with respect to Taxes or consent to any material claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment; provided, that in each casethe case of the filing of any amended Tax Return, the Company or the relevant Subsidiary shall deliver a copy of such amended Tax Return to Parent at least 30 days prior to filing for Parent's review and consent;
(j) 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 practice, unless such payment, discharge or satisfaction is made in accordance with the terms of such claim, liability or obligation as such terms exist on the date of this Agreement;
(k) pay accounts payable, utilize cash, draw down on lines of credit, delay or accelerate capital expenditures, incur expenditures on research and development, other than in the ordinary course of business and consistent with past practice;
(l) amend or modify in any material respect, 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;
(m) commence or settle any Action, other than the settlement of Actions involving payments by the Company or its Subsidiaries not to exceed $100,000 with respect to any individual Action or $250,000 in aggregate settlements;
(i) abandon, sell, assign, or grant any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or IP Agreements, (ii) grant to any third party any license, sublicense or covenant not to sue with respect to any Owned Intellectual Pro▇▇▇ty or Licensed Intellectual Property, other than in the ordinary course of business consistent with past practice, pursuant (iii) develop, create or invent any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress as of the date hereof), (iv) disclose, or allow to letters be disclosed, any confidential Owned Intellectual Property, unless such Owned Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof, or (v) fail to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in each and every item of credit or otherwisethe Owned Intellectual Property and the Licensed Intellectual Property;
(xo) except fail to make in a timely manner any filings with the extent SEC required under any Employee Benefit Plan the Securities Act or as required by applicable law, the Exchange Act or the rules and regulations promulgated thereunder;
(A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (Cp) enter into any employment, consulting contract or severance agreement or arrangement with any of its present director or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary Subsidiary or any of their respective affiliates (including any immediate family member of such person) or any other affiliate of the Company other than the dissolution of or any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;Subsidiary; or
(xviq) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practiceannounce an intention, enter into any lease (as lessor formal or lessee); sellinformal agreement or otherwise make a commitment, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Baycorp Holdings LTD)
Conduct of Business Pending the Merger. Section 5.1 SECTION 5.1. Conduct of Business of by the Company Pending the Merger.
(a) Between . From ----------------------------------------------------- the date of this Agreement and to the Effective Time, except as otherwise expressly contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, Agreement or as set forth in Section 5.1 Schedule 5.1, the Company shall, and shall cause each of the Subsidiaries, to (i) carry on its respective businesses in the ordinary course, (ii) use reasonable efforts to preserve intact its current business organizations and keep available the services of its current officers and key employees, (iii) use reasonable efforts to preserve its relationships with customers, suppliers and other Persons with which it has business dealings, (iv) use reasonable efforts to comply in all material respects with all laws and regulations applicable to it or any of its properties, assets or business and (v) use reasonable efforts to maintain in full force and effect all the Company Disclosure SchedulePermits necessary for such business, as required by law or unless Parent shall otherwise consent in writing (which consent provided however that the foregoing shall not be unreasonably withheld, delayed or conditioned), (Aprevent the Company from borrowing under its existing credit agreements to satisfy any of its obligations to holders of Options under Section 2.9(a) hereof. Without limiting the business generality of the Company and its subsidiaries shall be conducted foregoing, except as (x) expressly contemplated by this Agreement or (y) set forth in its ordinary course of business and Schedule 5.1, the Company shall use its reasonable best efforts to preserve substantially intact its business organizationnot, and material business relationships, (B) shall cause each of the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shallSubsidiaries not to:
(ia) amend or otherwise change its Certificate of Incorporation or By-Laws or any similar governing instrumentsorganizational documents or, in the case of the Company, change the number of directors constituting its entire board of directors;
(i) (A) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock, except that a wholly owned Subsidiary may declare and pay a dividend or make advances to its parent or the Company or (B) redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other securities; (ii) issue, deliver, sell, pledge, dispose of or encumber any (A) additional shares of its capital stock, ownership interests (B) securities convertible into or voting securitiesexchangeable for, or any options, warrants, convertible securities calls, commitments or other rights of any kind to acquire or receive acquire, any shares of its capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any C) of its subsidiaries (except for (A) the issuance of Common other securities, other than Shares issued upon the exercise of Options or in connection with other stock-based awards outstanding as of on the date of this Agreement, in each case, hereof in accordance with the terms of any Company Stock Option Plan, Plans as in effect on the date hereof; or (Biii) issuances in accordance with the Rights Plan)split, combine or reclassify any of its outstanding capital stock;
(iiic) declareacquire or agree to acquire (A) by merging or consolidating with, 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 any dividend or distribution by purchasing a subsidiary substantial portion of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan)assets of, or reclassifyby any other manner, combine, split any business or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by mergerpartnership, consolidation or disposition of stock or assets or otherwise) any corporationjoint venture, partnership association or other business organization or division thereof (including entities which are Subsidiaries) or otherwise sell or dispose of (B) any assets, other than sales or dispositions including real estate, except, with respect to both of clause (A) and (B) above, (x) purchases of inventory, equipment and supplies in the ordinary course of business or pursuant to existing Contractsconsistent with past practice and (y) other purchases in the ordinary course of business consistent with past practice in an amount not involving, in the aggregate, more than $5 million for acquisitions in the United States and Canada and $2 million for acquisitions outside the United States and Canada;
(viid) authorize or make capital expenditures in the aggregate in excess of $4 million;
(e) except in the ordinary course of business, amend or terminate any Company Material Contract, or waive, release or assign any material rights or claims thereunder;
(f) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any material property or material assets other than (i) excess or obsolete assets or (ii) in the ordinary course of business and consistent with past practice;
(i) except in accordance with the existing policies of the Company, enter into any employment or severance agreement with or, grant any severance or termination pay to any officer or director of the Company or any Subsidiary; or (ii) hire or agree to hire any new or additional corporate officers;
(h) except as required to comply with the terms hereof or applicable law or as disclosed in any SEC Report or Schedule 5.1, (A) adopt, enter into, terminate, amend or increase the amount or accelerate the payment or vesting of any material benefit or award or amount payable under any Company Employee Benefit Plan or other arrangement for the current or future benefit or welfare of any director, officer, former employee or, other than in the ordinary course of business consistent with past practice, current employee, (B) increase in any manner the compensation or fringe benefits of, or pay any bonus to, any director, officer or, other than in the ordinary course of business consistent with past practice, employee, (C) other than benefits accrued through the date hereof and other than in the ordinary course of business for employees other than officers or directors of the Company, pay any benefit not provided for under any Benefit Plan, (D) other than bonuses earned through the date hereof and other than in the ordinary course of business for employees other than officers and directors, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Company Employee Benefit Plan; provided that there shall be no grant or award to any director, officer or employee of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or any removal of existing restrictions in any Company Employee Benefit Plans or agreements or awards made thereunder or (E) take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or Company Employee Benefit Plan;
(i) except in connection with any acquisition permitted pursuant to this Section 5.1 or to satisfy its obligations to holders of Options pursuant to Section 2.9(a) hereof, or as disclosed on Schedule 5.1, incur or assume any long-term debt, or except in the ordinary course of business in amounts consistent with past practice, incur or assume any short-term indebtedness; (ii) incur or modify any material indebtedness or other liability; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; or (iv) except for advances or prepayments in the ordinary course of business in amounts consistent with past practice, make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries or customary loans or advances to employees in accordance with past practice);
(j) change of the accounting methods used by it unless required by generally accepted accounting principles;
(k) other than in the ordinary course of business consistent with past practice, enter into or amend in make any material respect Tax election or settle or compromise any Contractmaterial Tax liability;
(viiii) authorize settle or compromise any material new capital expenditures which areclaim, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur litigation or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each caselegal proceeding, other than in the ordinary course of business consistent with past practice in an amount not involving more than $1 million or (ii) pay, discharge or satisfy any other material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of (A) any such other claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, pursuant to letters or (B) of credit any such other claims, liabilities or otherwiseobligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(xm) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business consistent with respect past practice, waive the benefits of, or agree to employees who are not directors modify in any manner, any confidentiality, standstill or officers), similar agreement to which the Company or any Subsidiary is a party;
(Bn) grant permit any severance material insurance policy naming the Company or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting Subsidiary as a beneficiary or severance agreement a loss payable payee to be canceled or arrangement with any of its present or former directors, officers or other employeesterminated without notice to Parent, except for offers of employment in the ordinary course of business and consistent with past practice or in connection with employees who are not directors replacing such policy with a policy providing comparable coverage;
(o) take any action which, or officersomit to take any action, (D) establishthe omission of which, adopt, enter into would make any of the representations or amend warranties of the Company contained in this Agreement untrue and incorrect in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreementwhen made if such action or omission had then been made, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive or would result in any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation conditions set forth in Annex I hereto or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than conditions set forth in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businessesArticle VII hereof not being satisfied; or
(xixp) agree enter into an agreement, contract, commitment or arrangement to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that wouldforegoing, or would reasonably be expected toto authorize, individually recommend, propose or in the aggregate, prevent, materially delay or materially impede the consummation announce an intention to do any of the Merger or the other transactions contemplated by this Agreementforegoing.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 4.01. Conduct of Business of by the Company Pending the Merger.
(a) Between . During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company covenants and agrees that, unless Parent shall otherwise agree in writing, and except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 4.01 of the Company Disclosure Schedule, as required by law or unless Parent the Company shall otherwise consent in writing (which consent conduct its business and shall cause the businesses of its subsidiaries to be conducted only in, and the Company and its subsidiaries shall not be unreasonably withheldtake any action except in, delayed or conditioned), (A) the ordinary course of business and in a manner consistent with past practice; and the Company shall use 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 shall be conducted in its ordinary course and to preserve the present relationships of business and the Company shall use and its reasonable best efforts to preserve substantially intact its business organizationsubsidiaries with customers, suppliers and material business relationships, (B) other persons with which the Company shall perform or any of its obligations under subsidiaries has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, and (C) without limiting the foregoing, 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 the Effective Time, and except as set forth in Section 4.01 of the Company Disclosure Schedule, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its the Company's Certificate of Incorporation or By-Laws or any similar governing instrumentsLaws;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests 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 under the Company Stock Option Plans, which options are outstanding on the date hereof);
(c) sell, pledge, dispose of or encumber any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), assets of the Company or any of its subsidiaries (except for (Ai) sales of assets in the issuance ordinary course of Common Shares upon 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 $2,000,000 in the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Planaggregate);
(iiii) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a wholly owned subsidiary of the Company may declare and pay a dividend to its parent, and except that the Company may declare and pay quarterly cash dividends of $0.04 per share consistent with past practice, (ii) split, combine or otherwise, with respect to reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (except for iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any dividend subsidiary to purchase, repurchase, redeem or distribution by a subsidiary 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 Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth those listed on Section 3.8 4.01(e) of the Company Disclosure Schedule;
; (ixii) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, except for borrowings and reborrowing under the Company's existing credit facilities or other borrowings not in excess of $5,000,000 in the aggregate or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's subsidiaries entered into in the ordinary course of business) or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loansloans or advances, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than except in the ordinary course of business consistent with past practice; or (iii) authorize any capital expenditures or purchases of fixed assets which are, pursuant in the aggregate, in excess of 110% of the amount thereof provided for in the Company's current business plan, a copy of which has heretofore been furnished to letters Parent; or (iv) enter into or materially amend any contract, agreement, commitment or arrangement to effect any of credit or otherwisethe matters prohibited by this Section 4.01(e);
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Af) increase the compensation payable or fringe benefits of any of to become payable to its directors, officers or employees, except for increases in salary or wages of employees (except of the Company or its subsidiaries in the ordinary course of business accordance with respect to employees who are not directors past practices, or officers), (B) grant any severance or termination pay not provided for (except to make payments required to be made under any Employee Benefit Planobligations existing on the date hereof in accordance with the terms of such obligations) to, (C) or enter into or modify any employment, consulting employment or severance agreement agreement, in excess of $100,000 with, any director, officer or arrangement with other employee of the Company or any of its present subsidiaries, or establish, adopt, enter into or amend any collective bargaining agreement, Employee Plan (within the meaning of Section 2.11 of this Agreement), trust, fund, policy or arrangement for the benefit of any current or former directors, officers or other employeesemployees or any of their beneficiaries, except, in each case, as may be required by law or as would not result in a material increase in the cost of maintaining such collective bargaining agreement, Employee Plan, trust, fund, policy or arrangement.
(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) except as required by a change in GAAP occurring after the date hereof;
(h) make any material tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign tax liability, except to the extent the amount of any such settlement has been reserved for offers in the financial statements contained in the Company SEC Reports filed prior to the date of employment this Agreement or other settlements not in excess of $2,000,000 in the aggregate;
(i) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $5,000,000 in the aggregate, other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into or amend reserved against in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth the financial statements contained in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate SEC Reports filed prior to conform to changes in statutory the date of this Agreement or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixj) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.01(a) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreementabove.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 5.01 Conduct of Business of by the Company Pending the Merger.
(a) Between . The Company agrees that, from the date of this Agreement and until the earlier of the Effective TimeTime and termination of this Agreement pursuant to Article VIII, except as otherwise contemplated (x) required by this Agreementapplicable Law, as disclosed in the SEC Reports filed prior to the date of this Agreement, as (y) set forth in Section 5.1 5.01 of the Company Disclosure Schedule, as required or (z) permitted by law or contemplated in this Agreement, unless Parent shall may otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (Ai) the business businesses of the Company and its subsidiaries Group Companies shall be conducted in its the ordinary course of business consistent with past practice or as contemplated by the forecast of the Company delivered by the Company to Parent prior to the date hereof, and (ii) the Company shall use its reasonable best efforts to preserve substantially intact its the assets and the business organizationorganization of the Group Companies, to keep available the services of the current executive officers and key employees of the Group Companies and to maintain in all material respects the current relationships of the Group Companies with existing customers, suppliers and other Persons with which any Group Companies has material business relationshipsrelations as of the date hereof. Without limiting the generality of the foregoing, from the date of this Agreement until the earlier of the Effective Time and termination of this Agreement pursuant to Article VIII, except as (A) required by applicable Law, (B) set forth in Section 5.01 of the Company Disclosure Schedule, or (C) permitted by or contemplated in this Agreement or contemplated by the forecast of the Company delivered by the Company to Parent prior to the date hereof, the Company shall perform its obligations under this Agreementnot, and (C) without limiting the foregoingshall not permit any Group Company to, neither the Company nor directly or indirectly, do or propose to do any of its subsidiaries shall:the following without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned):
(ia) amend or otherwise change its Certificate memorandum and articles of Incorporation association or By-Laws equivalent organizational documents, other than those changes to the registered address or any similar governing instrumentsbusiness scope of a Group Company as reasonably needed within the ordinary course of business of such Group Company;
(iib) issue, deliversell, selltransfer, lease, sublease, license, pledge, dispose of of, grant or encumber encumber, or authorize the issuance, sale, transfer, lease, sublease, license, pledge, disposition, grant or encumbrance of, (i) any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights class of any kind to acquire or receive any shares of capital stock, any Group Company (other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for than in connection with (A) the issuance of Common Shares upon the exercise of any Company Options or Company RSUs in accordance with their respective terms, (B) the withholding of securities of the Company to satisfy Tax obligations with respect to Company Options or Company RSUs, (C) the acquisition by the Company of its securities in connection with other stock-based awards outstanding as the forfeiture of Company Options or Company RSUs, (D) the date acquisition by the Company of this Agreement, its securities in each case, connection with the net exercise of Company Options in accordance with the terms of thereof, (E) any transaction between or among the Company Stock Option Planand its direct or indirect wholly owned Subsidiaries, or (BF) issuances the issuance of Class A Shares to holders of Class B Shares in connection with the conversion of such Class B Shares in accordance with the Rights Planmemorandum and articles of association of the Company), (ii) any property or assets (whether real, personal or mixed, and including leasehold interests and intangible property) of any Group Company with a value or purchase price (including the value of assumed liabilities) in excess of $2,000,000, except in the ordinary course of business or pursuant to existing Contracts, or (iii) any material Intellectual Property owned by or licensed to any Group Company, except in the ordinary course of business or pursuant to existing Contracts;
(iiic) declare, set aside, make or pay any dividend or other distribution, payable in cash, stockshares, property or otherwise, with respect to any of its capital stock shares (except for other than dividends or other distributions from any dividend or distribution by a subsidiary Subsidiary of the Company to the Company or another wholly owned subsidiary any of its other Subsidiaries);
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its share capital or securities or other rights exchangeable into or convertible or exercisable for any of its share capital (other than (i) the purchase of Shares to satisfy obligations under the Company Share Plans, including the withholding of Shares in connection with the exercise of Company Options or Company RSUs in accordance with the their respective terms, and (ii) the cancellation, repurchase and redemption or re-designation and reclassification of Class B Shares in connection with the conversion thereof to Class A Shares in accordance with the memorandum and articles of association of the Company);
(ive) reclassifyeffect or commence any liquidation, combinedissolution, splitscheme of arrangement, subdividemerger, redeemconsolidation, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan)amalgamation, restructuring, reorganization, or reclassifysimilar transaction involving any Group Company, combineor create any new Subsidiary, split or subdivide any capital stock or other ownership interests of any of than the Company’s subsidiariesTransactions;
(vf) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of acquire any assets, other than sales securities or dispositions properties, in any single transaction or related series of transactions, for consideration in excess of $2,000,000, except for acquisitions in the ordinary course of business or pursuant to existing Contracts;
(viig) make any capital contribution or investment in any corporation, partnership, other business organization or any division thereof in excess of $2,000,000 in any single transaction or related series of transactions other than (i) in the ordinary course of business, or (ii) pursuant to existing Contracts;
(h) incur, assume, alter, amend or modify any Indebtedness, or guarantee any Indebtedness, in each case, with an amount in excess of $2,000,000 in a single transaction or related series of transactions, except for (i) the incurrence or guarantee of Indebtedness under any Group Company’s existing credit facilities or other Contracts as in effect on the date hereof in an aggregate amount not to exceed the maximum amount authorized under the Contracts evidencing such Indebtedness, (ii) any amendments to the Contracts related to any Group Company’s existing credit facilities which are requested by the applicable lender(s) in connection with the Transactions, (iii) in the ordinary course of business consistent with past practicepractice (including the renewal, extension or amendment of Contracts related to the Group Companies’ existing loans, or any drawdown or repayment of loans under such Contracts), or (iv) any Indebtedness between the Company and its Subsidiaries, or between two or more Subsidiaries of the Company;
(i) make any changes with respect to financial accounting policies or procedures in any material respect, including changes affecting the reported consolidated assets, liabilities or results of operations of the Group Companies, except as required by changes in statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto;
(j) settle any pending or threatened in writing Action of or against any Group Company (A) by making payments for an amount in excess of $1,000,000 for any single Action, (B) that would impose any material restrictions on the business or operations of any Group Company, or (C) that is brought by or on behalf of any current, former or purported holder of any share capital or debt securities of any Group Company relating to the Transactions, except for, in each case, any Actions occurring in the ordinary course of business;
(k) make or change any material Tax election, amend any material Tax Return, enter into any closing agreement or amend seek any ruling from any Governmental Authority with respect to material Taxes, or make any material change in any material respect any Contractmethod of Tax accounting or Tax accounting period;
(viiil) authorize or make any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget $2,000,000, other than as set forth on Section 3.8 in the annual budget of the Company Disclosure Scheduleduly approved by the Company Board;
(ixm) except for borrowings under (x) enter into any Contract that would have been a Material Contract if it had been in effect as of the Company’s existing credit facilitiesdate hereof, incur or (y) modify or amend in any material respect respect, terminate, or waive, release, compromise or assign any rights or claims under, any Material Contract in an manner adverse to each case not in the Company ordinary course of business, other than (A) any termination or renewal in accordance with the terms of any indebtedness for borrowed moneyexisting Material Contract that occur automatically without any action by the Company or any of its Subsidiaries, (B) as may be reasonably necessary to comply with the terms of this Agreement, or assume(C) as required or contemplated by the terms of any Material Contract in effect as of the date hereof in accordance with its terms as of the date hereof;
(n) except as required by Law or as required pursuant to this Agreement or the terms of any Company Employee Plan as in effect on the date hereof, guarantee (A) increase the compensation or endorsebenefits (including change in control, retention, severance termination pay, deferred compensation or other similar arrangement) of any of its directors, officers, employees, contractors, consultants, or otherwise as an accommodation become responsible for, the obligations of any person, service providers (except (x) base salary or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than wage increases for employees in the ordinary course of business consistent with past practicepractices, pursuant to letters of credit or otherwise;
(xy) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except increases that would not in the ordinary course aggregate cause an increase in the labor costs of business the Company and its Subsidiaries, taken as a whole, by more than 10% compared with respect to employees who are not directors or officersthe labor costs of the Company and its Subsidiaries, taken as a whole, as of the date hereof), (B) make, announce or grant any severance or incentive compensation (including equity-based incentive compensation) bonus, change in control, retention, severance, termination pay not provided for under or other similar arrangement to any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present current or former directors, officers or other officers, employees, except for offers of employment contractors, consultants, or service providers (other than in the connection with an ordinary course hiring of business and consistent with past practice with employees who are not directors or officersemployees), (DC) establish, adopt, enter into, materially amend or terminate any Company Employee Plan, (D) loan or advance any money or any other property to any present or former director, officer, employee, contractor, consultant, or service provider of the Company or any subsidiary, (E) hire (other than in connection with an ordinary course replacement hiring for employees whose annual compensation is less than $250,000) or terminate (other than for cause) any employee, contractor, consultant or service provider with an annual compensation in excess of $250,000 or enter into an agreement with respect to the foregoing, or (F) take any action to accelerate the vesting, funding or payment of any compensation, or benefits under, any Company Employee Plan or otherwise;
(o) terminate or cancel, let lapse, or amend or modify in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonusrespect, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than renewals in the ordinary course of business or as required by applicable lawbusiness, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim insurance policies maintained by the Company and its Subsidiaries which are not promptly replaced by a Tax refundcomparable amount of insurance coverage;
(xiiip) settle or compromise enter any litigation, other than settlements or compromises new line of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, business outside of its existing business as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value hereof that is material to the Company or any subsidiary of the Companyand its Subsidiaries, taken as a whole;
(xvq) adopt a plan of liquidation grant or resolutions providing for the liquidation, dissolution, merger, consolidation issue any new Company Options or other reorganization of Company RSUs pursuant to the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;Share Plans; and
(xvir) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties agree to or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor Contract or lessee); sellotherwise make a legally binding commitment, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between foregoing. Solely for the date purposes of this Agreement and the Effective TimeSection 5.01, the Company will timely file all reports required to be filed under all United States securities laws and regulations and pandemic or epidemic-related measures reasonably taken by the American Stock Exchange.
(c) Between Group Companies for the date purposes of reducing any adverse impact on the businesses and assets of the Group Companies, including those responding to COVID-19, shall not constitute a breach of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this AgreementSection 5.01.
Appears in 1 contract
Sources: Merger Agreement (iClick Interactive Asia Group LTD)
Conduct of Business Pending the Merger. Section SECTION 5.1 Conduct of Business of the Company. The Company Pending covenants and agrees that, during the Merger.
(a) Between period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, unless Parent shall otherwise agree in writing, which agreement shall not be unreasonably withheld or delayed, the Company shall conduct its business and shall cause the businesses of the Company Subsidiaries to be conducted only in, and the Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business in a manner consistent with past practice except as otherwise expressly contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the . The Company shall use its reasonable best efforts to preserve substantially intact its the business organization, organization and material business relationships, (B) assets and maintain the material rights of the Company shall perform its obligations under this Agreementand the Company Subsidiaries, keep available the services of the present officers, employees and (C) without consultants of the Company and the Company Subsidiaries and preserve the present relationships of the Company and the Company Subsidiaries with customers, suppliers and other persons with which the Company or any Company Subsidiary has business relations. Without limiting the foregoing, except as contemplated by this Agreement, neither the Company nor any Company Subsidiary shall, during the period from the date of its subsidiaries shallthis Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectly do any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its Certificate the Articles of Incorporation or By-Laws Bylaws of the Company or the organizational documents of any similar governing instrumentsCompany Subsidiary;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests interest (including, without limitation, any phantom interest) in the Company (except for the issuance of shares of Company Common Stock pursuant to any option previously granted under the Company Option Plans);
(c) sell, pledge, dispose of or encumber any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), assets of the Company or any of its subsidiaries (Company Subsidiary, except for (Ai) sales of assets in the issuance ordinary course of Common Shares upon business in a manner consistent with past practice, (ii) sales of lots and/or homes in a manner consistent with past practice, (iii) disposition of obsolete or worthless assets, (iv) sales of immaterial assets not in excess of $250,000 individually, and (v) liens on assets to secure purchase money and construction financings in the exercise ordinary course of Options or business consistent with past practice and other non-monetary encumbrances entered into in connection the ordinary course of business consistent with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)past practice;
(iiid) (i) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a wholly owned Company Subsidiary may declare and pay a dividend or otherwisemake advances to its parent or the Company, with respect to (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (except for iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any dividend Company Subsidiary to purchase, repurchase, redeem or distribution by a subsidiary otherwise acquire, any of its securities, 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 Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or other business organization or division thereof;
; (ii) purchase any securities or make any material investment (other than investments in existing joint ventures for the purpose of land acquisition complying with the dollar limits set forth in clause (vi) sell of this Section 5.1(e)), either by purchase of securities, contributions to capital, asset transfers, or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose purchase of any assets, in any person other than sales a wholly owned Company Subsidiary or dispositions in the ordinary course of business otherwise acquire direct or pursuant to existing Contracts;
indirect control over any person; (viiiii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any person, except under existing lines of credit in the ordinary course of business consistent with past practice, or make any loans, loans or advances or capital contributions to any other person (other than a subsidiary loans or advances to or from direct or indirect wholly owned Company Subsidiaries or pursuant to existing contracts or contracts for the acquisition or development of land entered into in the Companyordinary course of business consistent with past practice), in each case(iv) enter into or amend any contract or agreement, other than in the ordinary course of business consistent with past practice, that is or would be a Company Material Contract or is otherwise material to the Company and the Company Subsidiaries, taken as a whole; (v) authorize any capital expenditures or purchase of fixed assets which are, in excess of $250,000 individually or $1,500,000 in the aggregate; (vi) authorize any expenditures for the purchase of real estate which are in excess of $15,000,000 in any single transaction or series of related transactions or in excess of $30,000,000 in the aggregate in any 30-day period (it being understood and agreed that this clause (vi) shall not prohibit the performance of any obligation pursuant to letters any agreement entered into prior to the date of credit this Agreement (including any obligation to purchase land in order to fulfill obligations pursuant to agreements with home purchasers executed prior to the date hereof) in Section 5.1(e)(vi) of the Company Disclosure Schedule); or otherwise;(vii) fail to use their commercially reasonable efforts to cause to be memorialized in writing all agreements pertaining to the obligations of the Company or any of the Company Subsidiaries to purchase land in connection with the joint ventures as set forth on Schedule 5.1(e)(vii), except where the failure to so memorialize an agreement is not reasonably likely to individually or in the aggregate have a Company Material Adverse Effect.
(xf) except to the extent required under any Employee Benefit Plan or as may be required by applicable law, (A) increase the compensation payable or fringe benefits of any of to become payable to its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors employees, grant or officers), (B) grant pay any severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting employment or severance agreement or arrangement with any of its present or former directorsdirector, officers officer or other employeesemployee of the Company or any Company Subsidiary, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other amounts plan, agreement, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees, except increases in annual compensation for employees in the ordinary course consistent with past practice to the extent such compensation increases do not result in a material increase in compensation expense to the Company;
(g) enter into or amend any employment agreement between the Company or any Company Subsidiary (unless required by law) and any person that the Company or the Company Subsidiary does not have the unconditional right to terminate without liability at any time on or after the Effective Time;
(h) change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable);
(i) 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 with respect to any officer material amount of Tax, except to the extent the amount of any such settlement or employee other than compromise has been reserved for in the financial statements contained in the Company SEC Reports filed prior to the date hereof;
(j) except as set forth in Section 3.24 5.1(j) of the Company Disclosure Schedule, commence any litigation other than in accordance with past practice, or settle any litigation involving any liability of the Company or any Company Subsidiary for material money damages or restrictions upon the operations of any of the Company or the Company Subsidiaries, or enter into any agreement to waive, release, compromise or assign any material rights or claims held by the Company or Company Subsidiary or settle any claim described in Section 3.14 of the Company Disclosure Schedule for a payment exceeding $3,000 per claim or in such other maximum amount as may be set forth in Section 3.14 of the Company Disclosure Schedule;
(xik) make any change fail to renew the Company's existing insurance policies, including general liability insurance policies, or fail to replace such policies with new policies with terms substantially identical to those currently in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) force other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does premium amounts which will not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businessesthen market rates; or
(xixl) take, or agree to take take, any of the actions described in Section 5.1(a)(iSections 5.1(a) through Section 5.1(a)(xviii).
(bk) Between above, or any action which would make any of the date representations or warranties of the Company contained in this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly untrue or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue incorrect in any material respect; respect as contemplated hereby or (ii) that would, prevent the Company from performing or would reasonably be expected to, individually or cause the Company not to perform in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreementany material respect its covenants hereunder.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) Between . 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 or the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent agree in writing (which consent 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 be unreasonably withheldtake any action except in, delayed or conditioned), (A) the ordinary course of business and in a manner consistent with past practice; and the Company shall use all reasonable 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 shall be conducted in its ordinary course and to preserve the present relationships of business and the Company shall use and its reasonable best efforts to preserve substantially intact its business organizationsubsidiaries with customers, suppliers and material business relationships, (B) other persons with which the Company shall perform or any of its obligations under subsidiaries has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, and (C) without limiting the foregoing, 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 the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its the Certificate of Incorporation or By-Laws of the Company or similar organizational documents of any similar governing instrumentsof its subsidiaries;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests interest (including, without limitation, any phantom interest) in the Company or any voting securities of its subsidiaries (including but not limited except for the issuance of shares of Company Stock issuable pursuant to stock appreciation rightsCompany Option Securities outstanding on the date hereof or upon conversion of Company Series B Preferred Stock outstanding on the date hereof);
(c) sell, phantom stock pledge, dispose of or similar instruments), encumber any assets of the Company or any of its subsidiaries (except for (Ai) sales or licenses of assets in the issuance ordinary course of Common Shares upon 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 $500,000 in the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Planaggregate);
(iiii) except for regular quarterly dividends on the Company Series B Preferred Stock in the amount of $0.25 per share, declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a wholly owned subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or otherwise, with respect to reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities or property in respect of, in lieu of or in substitution for shares of its capital stock, or (iii) except for with respect to outstanding Company Options the vesting of which will be accelerated and which shall receive the Company Option Security Price at the Effective Time, amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any dividend subsidiary to purchase, repurchase, redeem or distribution by a subsidiary otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, shares of Company Stock or any Company Option Security, or provide that upon the exercise or conversion of any such Company Option Security the holder thereof shall receive cash, or propose to do any of the Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or other business organization or division thereof;
, (viii) sell incur any indebtedness for borrowed money or otherwise dispose of (whether by mergerissue any debt securities, consolidation or disposition of stock or assets or otherwise) except for short-term, working capital and commercial paper borrowings at any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than one time outstanding incurred in the ordinary course of business consistent with past practicepractice and except for intercompany indebtedness between the Company and any of its wholly owned subsidiaries or between such wholly owned subsidiaries, (iii) assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any person ("accommodate"), or make any loans or advances, except in the ordinary course of business consistent with past practice or in any case when such loans or advances or accommodations do not exceed $1,000,000 in the aggregate, (iv) enter into or amend in any material contract or agreement (except with respect any Contract;
to commitments described on Section 4.1(e)(iv) of the Company Disclosure Statement), (viiiv) authorize any material new capital expenditures (other than for Film Assets) or purchase of fixed assets which are, in the aggregate, in excess of $500,000 for the Company and its subsidiaries taken as a whole or (vi) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(e), provided, however, that nothing herein shall restrict the Company from, in accordance with its past practice: (A) licensing foreign rights to a Film Asset provided that any new domestic "prints and ads" commitments with respect to such Film Right license does not exceed $1,000,000, or (B) licensing domestic rights to Film Assets provided that such Film Asset licenses, individually or in the aggregate, do not involve commitments of more than $5,000,000, do not involve a license of all or substantially all of the Company’s capital expenditure budget 's Film Assets, are in accordance with industry standards and are at rates reflecting fair market value (however, notwithstanding the foregoing, the Company shall in no event enter into any so-called output deals ), or (C) entering into contracts to develop, acquire or produce Film Assets that, individually or in the aggregate, do not require the Company to expend more than $1,000,000, or (D) entering into any commitment which, individually or in the aggregate, calls for total payments (before or after the Effective Time) of not more than $1,000,000 and (E) completing the commitments and transactions respecting Film Assets set forth on Section 3.8 4.1(e) of the Company Disclosure ScheduleStatement;
(ixi) increase the compensation payable or to become payable to its officers or employees, except for borrowings under the Company’s existing credit facilities, incur increases in salary or modify in any material respect in an manner adverse to wages of employees of the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary its subsidiaries who are not officers of the Company), in each case, other than Company in the ordinary course of business consistent in accordance with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (Bii) grant any severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting employment or severance agreement with any officer or arrangement with other employee of the Company or any of its present subsidiaries who is compensated in excess of $100,000 per year, or (iii) 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, trust fund, policy or arrangement for the benefit of any current or former directors, officers or other employees, except, in each case, as may be required by law;
(g) except for offers as may be required as a result of employment a change in law or in generally accepted accounting principles, 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), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities either reflected or officers, (D) establish, adopt, enter into or amend reserved against in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth the financial statements contained in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principlesSEC Reports filed prior to the date of this Agreement, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xviij) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease Exploitation Agreements, Film Asset Acquisition Agreements or other agreements, written or oral, involving the production, acquisition or distribution of Films or Film Assets not permitted by Section 4.1(e)(A) through (as lessor or lesseeD) above (but the Company may discuss and negotiate such agreements); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixk) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.1 (a) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that wouldabove, or any action which would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation make any of the Merger representations or warranties of the other transactions contemplated by Company contained in this AgreementAgreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 4.1. Conduct of Business of by the Company Pending the Merger.
(a) Between . Except as expressly contemplated by this Agreement, 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 or the Effective Time, unless Parent shall otherwise agree in writing, the Company shall conduct its business 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 all reasonable efforts to preserve substantially intact the business organization of the Company, to keep available the services of the present officers, employees and consultants of the Company and to preserve the present 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, as disclosed in the SEC Reports filed prior to Company shall not, during the period from the date of this Agreement, as set forth in Section 5.1 Agreement and continuing until the earlier of the Company Disclosure Scheduletermination of this Agreement or the Effective Time, as required by law directly or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheldindirectly do, delayed or conditioned)agree to do, (A) the business any of the Company and its subsidiaries shall be conducted in its ordinary course following without the prior written consent of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shallParent:
(ia) amend or otherwise change its the Certificate of Incorporation or Byby-Laws or any similar governing instrumentslaws of the Company;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of interest) in the Company or any of its subsidiaries (except for (Ai) the issuance of shares of Company Common Shares upon Stock issuable pursuant to Stock Options which were granted under the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option PlanPlans and are outstanding on the date hereof and (ii) grants of Stock Options under the Company Stock Option Plans for the purchase of a maximum of 50,000 shares of Company Common Stock granted to the individuals identified in Section 4.1(b) of the Company Disclosure Schedule).
(c) directly or indirectly sell, pledge, dispose of or encumber any assets of the Company (Bexcept for (i) issuances sales of assets in accordance 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 $50,000 in the Rights Planaggregate);
(iiii) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property (ii) split, combine or otherwise, with respect to reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities or property in respect of, in lieu of or in substitution for shares of its capital stock, or (except for iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, any dividend of its securities including, without limitation, shares of Company Common Stock or distribution by a subsidiary any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock, or provide that upon the exercise or conversion of any such option, warrant or right the holder thereof shall receive cash, or propose to do any of the Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth those listed on Section 3.8 4.1(e) of the Company Disclosure Schedule;
; (ixii) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed moneymoney or issue any debt securities, or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personperson or, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than except in the ordinary course of business consistent with past practicepractice in amounts not individually or in the aggregate, pursuant in excess of $50,000, make any loans or advances; (iii) enter into or amend any material contract or agreement (except as described on Section 4.1(e) of the Company Disclosure Schedule); (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $50,000 for the Company; or (v) enter into or amend any contract, agreement, commitment or arrangement to letters effect any of credit or otherwisethe matters prohibited by this Section 4.1(e), except, in each case, in connection with the executive employment and consulting agreements described in Section 4.1(f) of the Company Disclosure Schedule;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Af) increase the compensation payable or fringe benefits of any of to become payable to its directors, officers or employees, except for increases in salary or wages of employees (except of the Company who are not officers of the Company in the ordinary course of business in accordance with respect to employees who are not directors past practice, or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting employment or severance agreement with any director, officer or other employee of the Company, or, except as described in Section 4.1(f) of the Company Disclosure Schedule, 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 with for the benefit of any of its present current or former directors, officers or other employees, except, in each case, as may be required by law and except, in each case, in connection with the executive employment and consulting agreements described in Section 4.1(f) of the Company Disclosure Schedule;
(g) except for offers as may be required as a result of employment a change in law or in GAAP, 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), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into reserved against in the Company's financial statements or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xviij) materially change any adopt a plan of its business policies;
(xviii) complete or partial liquidation, dissolution, merger, consolidation, restructuring, or other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businessesreorganization; or
(xixk) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.1 (a) through Section 5.1(a)(xviii).
(bj) Between above, or any action which would make any of the date representations or warranties of the Company contained in this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly untrue or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue incorrect in any material respect; respect or (ii) that would, prevent the Company from performing or would reasonably be expected to, individually or in cause the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this AgreementCompany not to perform its covenants hereunder.
Appears in 1 contract
Sources: Merger Agreement (HMSR Inc)
Conduct of Business Pending the Merger. Section 5.1 5.01 Conduct of Business of by the Company Pending the Merger.
(a) Between . The Company agrees that, from the date of this Agreement and until the earlier of the Effective TimeTime and termination of this Agreement pursuant to Article VIII, except as otherwise (x) required by applicable Law, or (y) contemplated or permitted by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall may otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (Ai) the business businesses of the Company and its subsidiaries Group Companies shall be conducted in its the ordinary course of business consistent with past practice in all material respects; and (ii) the Company shall use its commercially reasonable best efforts to preserve substantially intact its the assets and the business organizationorganization of the Group Companies, to keep available the services of the current officers and key employees of the Group Companies and to maintain in all material respects the current relationships of the Group Companies with existing customers, suppliers and other persons with which any Group Companies has material business relationshipsrelations as of the date hereof. Without limiting the generality of the foregoing paragraph, from the date of this Agreement until the earlier of the Effective Time and termination of this Agreement pursuant to Article VIII, except as (Bx) required by applicable Law, or (y) contemplated or permitted by this Agreement, the Company shall perform its obligations under this Agreementnot, and (C) without limiting the foregoing, neither the shall procure that no Group Company nor will do or propose to do any of its subsidiaries shall:the following without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned):
(ia) amend or otherwise change its Certificate memorandum and articles of Incorporation association or By-Laws equivalent organizational documents, other than immaterial amendments in the ordinary course of business, including without limitation, change of entity name or any similar governing instrumentsregistered address;
(iib) issue, deliversell, selltransfer, lease, sublease, license, pledge, dispose of of, grant or encumber any shares of capital stock, ownership interests or voting securitiesencumber, or authorize the issuance, sale, transfer, lease, sublease, license, pledge, disposition, grant or encumbrance of, (i) any options, warrants, convertible securities or other rights Equity Securities of any kind to acquire or receive class of any shares of capital stock, any Group Company (other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its subsidiaries (except for than in connection with (A) the issuance of Common Shares upon the exercise of any Company Options or in connection with other stock-based awards the settlement of any Company RSUs or Company Restricted Shares outstanding as of the date of this Agreement, in each case, Agreement in accordance with the terms of any the Company Stock Option PlanShare Plans and the award agreements applicable thereto as at the date of this Agreement, (B) the withholding of Company securities to satisfy tax obligations with respect to Company Options, Company RSUs or Company Restricted Shares, (C) the acquisition by the Company of its securities in connection with the forfeiture of Company Options, Company RSUs or Company Restricted Shares, or (BD) issuances the acquisition by the Company of its securities in connection with the net exercise of Company Options in accordance with the Rights Plan)terms thereof, (ii) any property or assets (whether real, personal or mixed, and including leasehold interests and intangible property) of any Group Company with a value or purchase price (including the value of assumed liabilities) in excess of RMB10,000,000, except in the ordinary course of business, or (iii) any material Intellectual Property owned by or licensed to any Group Company, except in the ordinary course of business consistent with past practice;
(iiic) declare, set aside, make or pay any dividend or other distribution, payable in cash, stockshares, property or otherwise, with respect to any of its capital stock shares (except for other than dividends or other distributions from any dividend or distribution by a subsidiary Subsidiary of the Company to the Company or another wholly owned subsidiary any of the Companyits other Subsidiaries consistent with past practice);
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire acquire, directly or indirectly, any shares of its share capital stock or securities or other rights exchangeable into or convertible or exercisable for any of its share capital (other than the purchase of Shares to satisfy obligations under the Company (except for Share Plans, including the acquisition withholding of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options Company Options, Company RSUs or the lapse of restrictions in respect of Company Restricted Shares pursuant to in accordance with the terms and conditions of a such Company Stock Option PlanOptions, Company RSUs or Company Restricted Shares (as applicable)), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesexcept as required by applicable Law;
(ve) make effect or commence any acquisition liquidation, dissolution, scheme of (whether by arrangement, merger, consolidation consolidation, amalgamation, restructuring, reorganization, public offering or acquisition of stock or substantially all of the assets)similar transaction involving any Group Company, or make create any investment in any interest innew Subsidiary, any corporation, partnership or other business organization or division thereofthan the Transactions;
(vif) sell or otherwise dispose of (acquire, whether by purchase, merger, consolidation spin off, consolidation, scheme of arrangement, amalgamation or disposition acquisition of stock or assets or otherwise, any assets, securities or properties, in aggregate, with a value or purchase price (including the value of assumed liabilities) in excess of RMB10,000,000 in any transaction or related series of transactions;
(g) make any capital contribution or investment in any corporation, partnership or partnership, other business organization or any division thereof in excess of RMB10,000,000 in aggregate, except for any capital contribution or otherwise sell or dispose of investment in any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing ContractsGroup Company;
(viih) incur, assume, alter, amend or modify any Indebtedness, or guarantee any Indebtedness, or issue any debt securities, except for (i) the incurrence or guarantee of Indebtedness under any Group Company’s existing credit facilities as in effect on the date hereof in an aggregate amount not to exceed the maximum amount authorized under the Contracts evidencing such Indebtedness or (ii) not in an aggregate amount in excess of RMB100,000,000;
(i) other than expenditures necessary to maintain assets in the ordinary course of business good repair consistent with the past practice, enter into authorize, or amend make any commitment with respect to, any single capital expenditure which is in any material respect any Contract;
(viii) authorize any material new excess of RMB10,000,000 or capital expenditures which are, in the aggregate, in excess of RMB20,000,000 for the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure ScheduleGroup Companies taken as a whole;
(ixj) except for borrowings under as required pursuant to any Company Employee Plan or this Agreement, (i) enter into any new employment or compensatory agreements (including the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms renewal of any indebtedness for borrowed moneysuch agreements), or assumeterminate any such agreements, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations with any Employee of any person, or make any loans, advances or capital contributions to any other person (Group Company other than a subsidiary the hiring or termination of the Company), in each case, other employees with an individual annual compensation of less than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable lawRMB2,000,000, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (Bii) grant or provide any severance or termination pay not provided for under payments or benefits to any Employee Benefit Planof any Group Company in an aggregate amount in excess of RMB500,000, (Ciii) enter into any employmentincrease the compensation, consulting bonus or pension, welfare, severance agreement or arrangement with any of its present or former directors, officers or other employeesbenefits of, pay any bonus to any Employee of any Group Company except for offers of employment such increases or payments, in the ordinary course aggregate, do not cause an increase in the labor costs of business and consistent with past practice with employees who are not directors or officersthe Group Companies, taken as a whole, by more than five percent (5%), (Div) establish, adopt, enter into or amend in any material respect or terminate any Company Employee Benefit Plan or materially amend the terms of any outstanding Company Options, Company RSUs or Company Restricted Shares, (Ev) pay take any action to accelerate the vesting or become obligated to pay payment of compensation or benefits under the Company Employee Plan, or (vi) forgive any bonus, severance or other amounts loans to any officer or employee other than as set forth in Section 3.24 Employee of the Company Disclosure Scheduleany Group Company;
(xik) make any change in any changes with respect to financial accounting principlespolicies or procedures, including changes affecting the reported consolidated assets, liabilities or results of operations of the Group Companies, except as may be appropriate to conform to required by changes in statutory or regulatory accounting rules or generally accepted accounting principles IFRS or regulatory requirements with respect thereto;
(xiil) enter into, amend, modify, consent to the termination of, or waive any material rights under, any Material Contract (or any Contract that would be a Material Contract if such Contract had been entered into prior to the date hereof) which calls for annual aggregate payments of RMB5,000,000 or more with a term longer than one (1) year and which cannot be terminated without material surviving obligations or material penalty upon notice of ninety (90) days or less, other than (A) any termination or renewal in accordance with the terms of any existing Material Contract that occur automatically without any action by any Group Company, (B) as may be reasonably necessary to comply with the terms of this Agreement, or (C) actions permitted under Section 5.01(h);
(m) terminate or cancel, let lapse, or amend or modify in any material respect, other than renewals in the ordinary course of business business, any material insurance policies maintained by it which are not promptly replaced by a comparable amount of insurance coverage;
(n) without prejudice to clause (r) below, settle, release, waive or as required by applicable law, compromise any pending or threatened Action against any Group Company (A) make for an amount required to be paid by any Tax election or change any method Group Company in excess of accountingUS$1,500,000, (B) that would impose any material restrictions on the business or operations of any Group Company;
(o) permit any material Intellectual Property owned by any Group Company to lapse or to be abandoned, dedicated, or disclaimed, fail to perform or make any applicable filings, recordings or other similar actions or filings, fail to pay all required fees and Taxes required or advisable to maintain and protect its interest in each and every item of material Intellectual Property owned by any Group Company, or grant or license or transfer to any Third Party any material Intellectual Property owned by any Group Company;
(p) fail to make in a timely manner any filings or registrations with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(q) engage in the conduct of any new line of business material to the Company and its Subsidiaries, taken as a whole;
(r) make or change any material Tax election, amend any Tax Return, enter into any settlement material closing agreement or compromise of seek any Tax liability, (C) file ruling from any amended Tax Return Governmental Authority with respect to any Taxmaterial Taxes, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a material refund of Taxes, settle or finally resolve any material controversy with respect to Taxes, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of material Taxes, change any method of Tax refundaccounting or Tax accounting period or initiate any voluntary Tax disclosure to any Governmental Authority;
(xiiis) settle grant any fixed or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary floating security interests of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;business; or
(xviit) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practiceannounce an intention, enter into any lease (as lessor agreement or lessee); sellotherwise make a legally binding commitment, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) Between . 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 or the Effective Time, unless Parent shall otherwise agree in writing, the Company shall conduct its business 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 other than actions taken by the Company in contemplation of the Merger; and the Company shall use all reasonable commercial efforts to preserve substantially intact the business organization of the Company, to keep available the services of the present officers, employees and consultants of the Company and to preserve the present relationships of the Company with customers, suppliers and other persons with which the Company has business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to Company shall not, during the period from the date of this Agreement, as set forth in Section 5.1 Agreement and continuing until the earlier of the Company Disclosure Scheduletermination of this Agreement or the Effective Time, as required by law directly or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheldindirectly do, delayed or conditioned)propose to do, (A) the business any of the Company and its subsidiaries shall be conducted in its ordinary course following without the prior written consent of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shallParent:
(ia) amend or otherwise change its Certificate the Articles of Incorporation or By-Laws or any similar governing instrumentsof the Company except pursuant to the Merger Agreement;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of interest) in the Company or any of its subsidiaries (except for (A) the issuance of shares of Company Common Shares upon Stock issuable pursuant to that certain stock option agreement for the exercise purchase of Options or in connection with other stock-based awards outstanding as 352 shares of Company Common Stock (the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan"Option"));
(iiic) sell, pledge, dispose of or encumber any assets (tangible or intangible) of the Company except for (i) dispositions of obsolete or worthless assets and (ii) sales of immaterial assets not in excess of $25,000 in the aggregate;
(i) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect of any of its capital stock (other than distributions in respect of S Corporation tax liabilities consistent with past practice), with (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect to any of, in lieu of or in substitution for shares of its capital stock (except for the issuance of shares of Company Common Stock issuable pursuant to the Option) or (iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, any dividend of its securities including without limitation, shares of Company Common Stock or distribution by a subsidiary any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock, or propose to do any of the Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or other business organization or division thereof;
; (viii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions except in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings and under the Company’s existing credit facilities's revolving line of credit, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personperson or, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than except in the ordinary course of business consistent with past practice, pursuant make any loans or advances; (iii) enter into or amend any material contract or agreement (expect with respect to letters the Deere & Co. consulting services agreement and consistent with the terms as previously discussed with Parent); (iv) authorize any capital expenditures or purchase of credit fixed assets which are, in the aggregate, in excess of $50,000 for the Company; or otherwise(v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(e);
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Af) increase the compensation payable or fringe benefits of any of to become payable to its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors employees, or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting employment or severance agreement with any director, officer 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, termination, severance or other plan, agreement, trust, fund, policy or arrangement with for the benefit of any of its present current or former directors, officers or other employees, except for offers 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 employment 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), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into reserved against in the Financial Statements or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixj) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.1 (a) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that wouldabove, or any action which would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation make any of the Merger representations or warranties of the other transactions contemplated by Company contained in this AgreementAgreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Sources: Merger Agreement (Registry Inc)
Conduct of Business Pending the Merger. Section SECTION 5.1 Conduct of Business of by the Company Pending the Merger.
(a) Between . 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 or the Effective Time, unless Parent, shall otherwise agree in writing, the Company shall conduct its business 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 other than actions taken by the Company in contemplation of the Merger; and the Company shall use all reasonable commercial efforts to preserve substantially intact the business organization of the Company, to keep available the services of the present officers, employees and consultants of the Company and to preserve the present relationships of the Company 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, as disclosed in the SEC Reports filed prior to Company shall not, during the period from the date of this Agreement, as set forth in Section 5.1 Agreement and continuing until the earlier of the Company Disclosure Scheduletermination of this Agreement or the Effective Time, as required by law directly or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheldindirectly do, delayed or conditioned)propose to do, (A) the business any of the Company and its subsidiaries shall be conducted in its ordinary course following without the prior written consent of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shallParent:
(ia) amend or otherwise change its Certificate the Articles of Incorporation or By-Laws or any similar governing instrumentsof the Company;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests interest (including, without limitation, any phantom interest) in the Company, or its 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 voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), assets of the Company or any of its subsidiaries (except for (Ai) sales of assets in the issuance ordinary course of Common Shares upon 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 exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Planaggregate);
(iiii) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property (ii) split, combine or otherwisereclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, with respect to any in lieu of or in substitution for shares of its capital stock (except for any dividend or distribution by a subsidiary 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) or (iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, any of its securities, including, without limitation, shares of Company Stock or any option, warrant or right, directly or indirectly, to the Company or another wholly owned subsidiary acquire shares of the Company)'s capital stock or propose to do any of the foregoing;
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or other business organization or division thereof;
; (viii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money calling for aggregate payments in excess of $10,000 or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personperson or, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than except in the ordinary course of business consistent with past practice, pursuant make any loans or advances; (iii) enter into or amend any material contract or agreement; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $10,000 for the Company and its subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement to letters effect any of credit or otherwisethe matters prohibited by this Section 5.1(e);
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Af) increase the compensation payable or fringe benefits 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 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 of its current or former directors, officers or employees (except employees, except, in each case, as may be required by law provided the Company may increase wages in the ordinary course of business consistent with the Company's past practice but not more than 5% for any individual employee;
(g) take any action to change accounting policies or procedures (including, without limitation, procedures with respect to employees who are not directors revenue recognition, payments of accounts payable and collection of accounts receivable);
(h) make any material tax election inconsistent with past practice or officerssettle 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), (B) grant any severance other than the payment, discharge or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into reserved against in the Financial Statements or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixj) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 5.1 (a) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that wouldabove, or any action which would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation make any of the Merger representations or warranties of the other transactions contemplated by Company contained in this AgreementAgreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between The Company covenants and agrees that, except as contemplated by this Agreement, between the date of this Agreement and the Effective Time, except as unless the Buyer shall otherwise contemplated by this Agreementagree in writing, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 Business of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted only in its the Company, and the Company shall not take any action except in, the usual, regular and ordinary course of business and the Company will generally conduct its business in substantially the same way as heretofore conducted, and without limiting the foregoing, the Company will continue to operate in the same geographic markets serving the same market segments. The Company shall use its reasonable best efforts to preserve substantially intact the business organization of the Company, to keep available the present services of the officers, employees and consultants of the Company and to preserve the current relationships and goodwill of the Company with customers, suppliers and other persons with which the Company has business relationships. Without limiting the generality of the foregoing, the Company shall:
(i) maintain in full force and effect all contracts of insurance and indemnity specified in any Schedule hereto;
(ii) repair and maintain all of its tangible properties and assets in accordance with its usual and ordinary repair and maintenance standards;
(iii) continue to apply in full the same rigorous credit review process used by the Company prior to the Closing in determining the extent to which it will extend credit to customers or potential customers in the ordinary course of business;
(iv) notify the Buyer of any material emergency or other material change in the operation of its business organizationor properties and of any governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated).
(b) By way of amplification and material business relationshipsnot limitation of clause (a) above, (B) the Company shall perform its obligations under not between the date of this AgreementAgreement and the Effective Time, and (C) without limiting the foregoingdirectly or indirectly do, neither the Company nor or publicly announce an intention to do, any of the following without the prior written consent of Buyer through one of its subsidiaries shall:authorized representatives (which representatives shall be each of its Chief Executive Officer, President and Chief Financial Officer):
(i) amend or otherwise change its Certificate of Incorporation Organizational Documents or By-Laws laws or any similar governing instrumentsequivalent organizational documents;
(ii) issue, deliver, sell, pledge, dispose of, grant, encumber, or authorize the issuance, delivery, sale, pledge, disposition, grant or encumbrance of, any Equity Interests of or encumber any shares of capital stock, ownership interests or voting securitiesthe Company, or any options, warrants, convertible securities or other rights of any kind to acquire any such Equity Interests, or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments)interest, of the Company Company, or enter into any agreement with respect to any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or foregoing, other than in connection with other stock-based awards outstanding as the Stock Warrant Agreement and upon exercise of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)Options;
(iii) declare, set aside, make or pay any distribution (by way of dividend or other distribution, payable in cash, stock, property or otherwise, ) with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company)Equity Interests;
(iv) reclassify, combine, split, subdividecombine or reclassify any of its Equity Interests or issue or authorize or propose the issuance of any other securities in respect of, redeem, purchase or otherwise acquire any shares in lieu of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariessubstitution for its Equity Interests;
(v) make repurchase, redeem or otherwise acquire any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all Equity Interests of the assets)Company, or make any investment in securities convertible into or exercisable for any interest in, any corporation, partnership or other business organization or division thereofof the Equity Interests of the Company;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) enter into any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course new line of business or pursuant to existing Contractsmaterially expand the business currently conducted by the Company;
(vii) acquire or agree to acquire, by merging or consolidating with, or by purchasing an equity interest in or a portion of the assets of, or by any other than in the ordinary course of manner, any business consistent with past practiceor any corporation, enter into partnership, other business organization or amend in any division thereof or any material respect any Contractamount of assets;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, increase the aggregate amounts owed under the Company's existing credit facilities or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any personindividual, corporation or other entity, or make any loansloan or advance;
(ix) lower or otherwise alter its credit card fraud review process (as more fully described in Exhibit 6.01);
(x) authorize any capital expenditures of more than $25,000 in the aggregate approved by ▇▇▇▇▇);
(xi) (A) (x) adopt, advances amend, renew or capital contributions to terminate any plan or any agreement, arrangement, plan or policy between the Company and one or more of its current or former directors, officers or employees, or (y) increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan or agreement as in effect as of the date hereof (including, without limitation, the granting of stock options, stock appreciation rights, restricted stock, restricted stock units or performance units or shares); or (B) enter into, modify or renew any employment, severance or other person (other than a subsidiary agreement with any director, officer or 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, termination, severance, retention or other plan, agreement, trust, fund, policy or arrangement providing for any benefit to any director, officer or employee;
(xii) pay any bonus or any compensation other than base compensation, except for payments of bonuses and other incentive compensation to sales personnel pursuant to and consistent with the written sales incentive plan which has been provided to and approved by Buyer;
(xiii) take any action with respect to accounting methods, principles or practices, other than changes required by applicable law or GAAP or regulatory accounting as concurred in by the Company's independent accountants;
(xiv) make any tax election or settle or compromise any federal, state, local or foreign tax liability;
(xv) pay, discharge or satisfy any claim, liability or obligation, other than the payment, discharge or satisfaction, in each casethe ordinary course of business and consistent with past practice;
(xvi) sell, lease, encumber, assign or otherwise dispose of, or agree to sell, lease, encumber, assign or otherwise dispose of, any of its material assets, properties or other rights or agreements;
(xvii) take any action that is intended or reasonably can be expected to result in any of its representations and warranties set forth in this Agreement being or becoming untrue in any material respect, or any of the conditions to the consummation of the Merger and the other transactions contemplated by this Agreement set forth in Article IX not being satisfied in any material respect, or in any material violation of any provision of this Agreement;
(xviii) enter into or renew, amend or terminate, or give notice of a proposed renewal, amendment or termination of or make any commitment with respect to, (A) any contract, agreement or lease for office space or operations space to which the Company is a party or by which the Company or its properties is bound; (B) any lease, contract or agreement other than in the ordinary course of business consistent with past practicepractice including renewals of leases to existing tenants of the Company ; (C) regardless of whether consistent with past practices, pursuant any lease, contract, agreement or commitment involving an aggregate payment by or to letters the Company of credit more than $10,000 or otherwiserequiring performance by the Company of any obligations at any time more than one year after the time of execution;
(xxix) except enter into an agreement, contract, or commitment that, if entered into prior to the extent date hereof, would be required under to be listed on a Schedule delivered to Buyer pursuant to the terms of this Agreement, including without limitation, any Employee Benefit Plan arrangement or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business contract with respect to employees who are not directors web site development or officers)operations; marketing, promotion, affiliate and advertising, including search engine referrals and Internet private labeling; fulfillment operations; or telephone, credit card or freight carrier services;
(Bxx) grant amend, terminate or change in any severance material respect any lease, contract, undertaking, arrangement or termination pay not provided for under other commitment listed in any Employee Benefit PlanSchedule (including without limitation its arrangements and contracts with respect to web site development and operations; marketing, promotion, affiliate and advertising, including search engine referrals and Internet private labeling; fulfillment operations; and telephone, credit card or freight carrier services) or knowingly do any act or omit to do any act, or permit an act or omission to act, that will cause a breach of any such lease, contract, undertaking, arrangement or other commitment;
(Cxxi) change its pricing policies or its policies with respect to freight rates charged to customers;
(xxii) enter into any employment, consulting or severance agreement or arrangement transaction with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan an Insider; or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixxxiii) agree to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Sources: Merger Agreement
Conduct of Business Pending the Merger. Section 5.1 SECTION 5.01 Conduct of Business of by the Company Pending the Merger.
(a) Between . The Company agrees that, between the date of this Agreement and the Effective Time, except as otherwise contemplated required by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreementapplicable Law, as set forth in Section 5.1 5.01 of the Company Disclosure ScheduleLetter or as expressly contemplated by any other provision of this Agreement, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (Ai) the business businesses of the Company and its subsidiaries the Company Subsidiaries shall be conducted only in, and the Company and the Company Subsidiaries shall not take any action except in, a lawfully permitted manner in its the ordinary course of business and in a manner consistent with past practice; and (ii) the Company shall use its commercially reasonable best efforts to preserve substantially intact its the business organization, and material business relationships, (B) organization of the Company shall perform its obligations under and the Company Subsidiaries, to keep available the services of the current officers, employees, consultants, contractors, subcontractors and agents of the Company and the Company Subsidiaries and to preserve the current relationships of the Company and the Company Subsidiaries with Governmental Authorities, customers, suppliers and other persons with which the Company or any Company Subsidiary has material relations. By way of amplification and not limitation, except as required by applicable Law, as set forth in Section 5.01 of the Company Disclosure Letter or as expressly contemplated by any other provision of this Agreement, and (C) without limiting the foregoing, neither the Company nor any Company Subsidiary shall, between the date of its subsidiaries shall:this Agreement and the Effective Time, directly or indirectly, do any of the following without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned):
(ia) amend or otherwise change its Certificate certificate or articles of Incorporation incorporation, bylaws or By-Laws or any similar governing instrumentsequivalent organizational documents;
(iib) issue, deliversell, selltransfer, lease, sublease, license, pledge, dispose of of, grant or encumber encumber, or authorize the issuance, sale, transfer, lease, sublease, license, pledge, disposition, grant or encumbrance of, (i) any shares of capital stockany class of shares of the Company or any Company Subsidiary (other than in connection with the exercise or performance of any Company Options, ownership interests Restricted Shares or voting securitiesRSUs granted prior to the date of this Agreement in accordance with the Stock Incentive Plans or granted on or after the date of this Agreement as permitted by Section 5.01(i)), or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stockof, or any other ownership interests interest (including any phantom interest) in, the Company or any voting securities Company Subsidiary (except as permitted by Section 5.01(i)) or (ii) any property or assets (whether real, personal or mixed, and including but not limited to stock appreciation rights, phantom stock or similar instruments), leasehold interests and intangible property) of the Company or any Company Subsidiary, except in the ordinary course of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or business and in connection a manner consistent with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)past practice;
(iiic) 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 shares, or split, combine or reclassify any dividend or distribution of its shares, other than dividends paid by a subsidiary of the Company to the Company or another wholly owned subsidiary Company Subsidiary to its parent in the ordinary course of the Company)business;
(ivd) reclassify, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire acquire, directly or indirectly, any shares of capital stock its shares, or any options, warrants, convertible securities or other rights exchangeable into or convertible or exercisable for any of its shares, other than (i) the Company (except for the acquisition forfeiture or repurchase of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Planequity awards outstanding on the date of this Agreement or granted after the date of this Agreement as permitted by Section 5.01(i), (ii) the surrender of any Common Shares by current or reclassifyformer directors, combineofficers, split or subdivide any capital stock employees, consultants or other ownership interests service providers of the Company or any Company Subsidiary in payment of withholding Taxes with respect to any equity awards, or (iii) the cashless or net exercise of Options (including in payment of any of the Company’s subsidiariesexercise price or withholding Taxes);
(ve) make effect or commence any acquisition liquidation, dissolution, scheme of arrangement, merger, consolidation, amalgamation, restructuring, reorganization or similar transaction involving the Company or any Company Subsidiary, or create any new Company Subsidiaries, other than the merger, consolidation, amalgamation or other combination of any wholly owned Company Subsidiary with any other wholly owned Company Subsidiary;
(whether f) enter into, or propose in writing to any Third Party to enter into, any transaction involving any earn-out, installment or similar payment to or from the Company or any Company Subsidiary, by or to any Third Party, other than the purchase and sale of goods and services in the ordinary course of business;
(g) (i) acquire (including, without limitation, by merger, consolidation consolidation, scheme of arrangement, amalgamation or acquisition of stock or substantially all of the assets), assets or any other business combination) or make any capital contribution or investment in any interest in, any corporation, partnership or partnership, other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, (other than sales or dispositions in the ordinary course of business any wholly owned Company Subsidiary or pursuant to existing Contracts;
Contracts or obligations outstanding on the date hereof) or acquire (vii) other than in the ordinary course of business consistent with past practicebusiness) any significant amount of assets; (ii) incur, enter into assume, or guarantee any Indebtedness, or issue any debt securities, in excess of US$300,000 in the aggregate, or alter, amend or modify the terms of any Indebtedness in a manner materially adverse to the Company and the Company Subsidiaries, taken as a whole, or make any loans or advances in excess of US$50,000 individually or US$300,000 in the aggregate; (iii) create or grant any material Lien (other than Permitted Liens) on any assets of the Company or any Company Subsidiary; or (iv) make any commitment with respect to, any Contract;
(viii) authorize any material new single capital expenditure which is in excess of US$150,000 or make capital expenditures which are, in the aggregate, in excess of US$300,000 for the Company’s capital expenditure budget set forth on Section 3.8 Company and the Company Subsidiaries taken as a whole, other than expenditures that are necessary to maintain existing assets in good repair, consistent with past practice;
(h) (A) enter into any new employment or compensatory agreements, or amend any such agreements (including any Company Employee Agreement), with any director, officer, employee or consultant of the Company Disclosure Schedule;
or any Company Subsidiary (ixother than (i) except for borrowings under the Company’s existing credit facilitieshiring, incur promotion, demotion or modify in any material respect in termination of at-will employees or consultants below officer level with an manner adverse annual salary of less than US$150,000 (or its RMB equivalent), provided, that, subject to the Company Board’s fiduciary obligations as determined by the terms Company Board in its good faith judgment after consultation with outside legal counsel, the Company shall not demote or terminate the employment of any indebtedness for borrowed moneyemployee who is a Rollover Holder absent Parent’s consent, (ii) the renewal or assumereplacement of existing agreements on substantially similar terms and (iii) the hiring of at-will employees to fulfill open positions disclosed to Parent prior to the date hereof), guarantee (B) grant or endorseprovide any rights to severance or termination payments or benefits to any director, officer or otherwise as an accommodation become responsible foremployee of the Company or any Company Subsidiary, (C) increase the obligations of compensation, bonus or pension, welfare or other benefits of, pay any personbonus to, or make any loansnew equity awards to any director, advances officer or capital contributions to employee of the Company or any Company Subsidiary or any other person (other than a subsidiary of the Company), in each case, other than (i) annual salary increases in the ordinary course of business consistent with past practicebusiness, pursuant not to letters exceed 4% for any employee who is not a Rollover Holder and commensurate increases in other compensation and benefits based on salary and (ii) equity awards permitted by Section 5.01(i)), (D) establish, adopt, amend or terminate in a manner adverse to the Company any Company Employee Plan or amend the terms of credit any outstanding award under any Stock Incentive Plan in a manner adverse to the Company, (E) accelerate the vesting or otherwise;
(x) except payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Employee Plan or Company Employee Agreement, to the extent not already required under in any such plan (it being understood that the vesting of all equity awards shall be accelerated in full in connection with the Merger), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Employee Benefit Plan or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by applicable lawGAAP, or (AG) increase the compensation or fringe benefits of forgive any of its loans to directors, officers or employees of the Company or any Company Subsidiary;
(i) issue or grant any Company Option or other equity award to any person under any Stock Incentive Plan, except in the ordinary course of business and consistent with past practice;
(j) make any changes with respect to employees who are not directors any credit practice, method of financial accounting, or officersfinancial accounting policies or procedures, including changes affecting the reported consolidated assets, liabilities or results of operations of the Company and the Company Subsidiaries, except as required by GAAP;
(k) pay, discharge or satisfy any material debt, other than the payment, discharge or satisfaction of such debt as they become due in the ordinary course of business and consistent with past practice;
(l) enter into, amend, modify or consent to the termination of any Material Contract (or any Contract that would be such a Material Contract if such Contract had been entered into prior to the date hereof) (except, in each case, as otherwise permitted by this Section 5.01), or waive or consent to the termination of the Company’s or any Company Subsidiary’s rights thereunder, except in each case in the ordinary course of business;
(B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (Cm) enter into any employmentContract between the Company or any Company Subsidiary, consulting or severance agreement or arrangement with on the one hand, and any of its present their respective Affiliates, directors or former directorsexecutive officers, officers or on the other employeeshand, except for offers of employment other than (i) reasonable expense reimbursement to Company Personnel in the ordinary course of business and consistent with past practice with employees who are not directors and (ii) as permitted by Section 5.01(h) or officersSection 5.01(i);
(n) terminate or cancel, (D) establishlet lapse, adopt, enter into or amend or modify in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonusrespect, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than renewals in the ordinary course of business, any material insurance policies maintained by it which are not promptly replaced by a comparable amount of insurance coverage;
(o) commence or settle any material Action;
(p) engage in the conduct of any new line of business material to the Company and the Company Subsidiaries, taken as a whole;
(q) make, revoke or change any material Tax election (except as required by applicable lawLaw), (A) make materially amend any Tax election Return or change waive any method statute of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return limitations with respect to any Taxmaterial Tax claim or assessment, (D) change any annual Tax accounting period, (E) enter into any material closing agreement relating with respect to any material Tax or (F) Taxes, surrender any right to claim a Tax refund;
(xiii) material refund of Taxes, settle or compromise finally resolve any litigationmaterial controversy with respect to Taxes, or materially change any method of Tax accounting, or fail to duly and timely file all Tax Returns and other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive material documents required to be filed with any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than taxing authority in the ordinary course of business consistent accordance with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixr) agree publicly announce an intention or enter into any binding agreement to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Sources: Merger Agreement (Idg-Accel China Growth Fund Ii L P)
Conduct of Business Pending the Merger. Section 5.1 SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) Between . Each of the Company and the Stockholder covenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent agree in writing (which consent writing, the Company shall, and the Stockholder shall not cause the Company to, conduct its business and shall cause the businesses of its subsidiaries to be unreasonably withheldconducted in all material respects in the ordinary course of business; and the Company shall, delayed or conditioned)and the Stockholder shall cause the Company to, (A) use all reasonable commercial efforts to preserve substantially intact the business organization of the Company and its subsidiaries shall be conducted in its ordinary course taken as a whole, to keep available the services of business the present key officers, employees and consultants of the Company shall use and its reasonable best efforts subsidiaries taken as a whole and to preserve substantially intact its business organization, and material business relationships, (B) the present relationships of the Company shall perform and its obligations under 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 contemplated by this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shall, and the Stockholder shall cause the Company not to, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its the Certificate of Incorporation or By-Laws of the Company or any similar governing instrumentsof its subsidiaries;
(iib) issue, deliverissue (except for the issuance of shares upon the exercise of any outstanding stock options), sell, pledge, dispose of or encumber encumber, or authorize the issuance (except for the issuance of shares upon the exercise of any outstanding stock options), sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests interest (including, without limitation, any phantom interest) in the Company or any voting securities of its subsidiaries.
(including but not limited to stock appreciation rightsc) sell, phantom stock pledge, dispose of or similar instruments), encumber any assets of the Company or any of its subsidiaries (except for (Ai) sales of assets in the issuance ordinary course of Common Shares upon the exercise business and in a manner consistent with past practice and (ii) dispositions of Options obsolete or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Planworthless assets);
(iiii) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a wholly owned subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or otherwise, with respect to reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, 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, including the Stock Options, except for with respect to Stock Options, to the extent the Company may be otherwise contractually required, or enter into any dividend or distribution by a subsidiary agreement to do any of the Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), ) any business or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
division; (viii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), except in each case, other than case in the ordinary course of business consistent with past practice, pursuant or make any loans or advances; (iii) enter into or amend any contract or agreement other than in the ordinary course of business; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $100,000 for the Company and its subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement to letters effect any of credit or otherwisethe matters prohibited by this Section 4.1(e);
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Ai) increase the compensation payable or fringe benefits of any of to become payable to its directorsexecutive officers, officers directors or employees (except in the ordinary course of business consistent with respect to employees who are not directors or officers), past practice; (Bii) grant any additional severance or termination pay not provided for under to, or enter into any Employee Benefit Plannew employment or severance agreements with, any director, executive officer or current employee of the Company or its subsidiaries; (Ciii) enter into any employment, consulting employment or severance agreement or arrangement with any new employees of the Company or its present subsidiaries except in the ordinary course of business consistent with past practice; or (iv) establish, adopt, enter into or amend any collective bargaining, profit sharing, thrift, restricted stock, pension, retirement, deferred compensation or severance plan, trust, fund or policy for the benefit of current or former directors, officers or employees of the Company or any of its subsidiaries, except, in each case, as may be required by law;
(g) except as required under generally accepted accounting principles, take any action to change in any material respect the accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable) of the Company or any subsidiary (except in the case of subsidiaries to conform to the Company's policies and procedures);
(h) make any tax election inconsistent with past practice or settle or compromise any federal, state, local or foreign tax liability or agree to an extension of a statute of limitations, in each case which would be material to the Company and its subsidiaries taken as a whole;
(i) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) material to the Company and its subsidiaries taken as a whole, other employeesthan the payment, except for offers of employment discharge or satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into or amend reserved against in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth the financial statements contained in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate SEC Reports filed prior to conform to changes in statutory the date of this Agreement or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixj) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.1 (a) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreementabove.
Appears in 1 contract
Sources: Merger Agreement (Registry Inc)
Conduct of Business Pending the Merger. Section 5.1 SECTION 4.1: Conduct of Business of by the Company Pending the Merger.
(a) Between . 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 or the Effective Time, unless Parent shall otherwise agree in writing, the Company shall conduct its business only in, and 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 as contemplated by this Agreement; and the Company shall use all reasonable commercial efforts to preserve substantially intact the business organization of the Company, to keep available the services of the present officers, employees and consultants of the Company and to preserve the present relationships of the Company with customers, suppliers and other persons with which the Company has significant business relations. By way of example and not limitation, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to Company shall not, during the period from the date of this Agreement, as set forth in Section 5.1 Agreement and continuing until the earlier of the Company Disclosure Scheduletermination of this Agreement or the Effective Time, as required by law directly or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheldindirectly do, delayed or conditioned)propose to do, (A) the business any of the Company and its subsidiaries shall be conducted in its ordinary course following without the prior written consent of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its subsidiaries shallParent:
(ia) amend or otherwise change its the Certificate of Incorporation or By-Laws or any similar governing instrumentsof the Company as amended and restated to date;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of interest) in the Company or any of its subsidiaries affiliates (except for the issuance of shares of Company Common Stock issuable pursuant to Stock Options which are outstanding on the date hereof or pursuant to the exercise of outstanding Warrants).
(c) sell, pledge, dispose of or encumber any assets of the Company (except for (Ai) sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the issuance transfer of Common Shares upon the exercise inventory in satisfaction of Options or in connection with other stockpre-based awards outstanding as existing obligations of the date Company or sales of this Agreement, immaterial assets not in each case, excess of $5,000 in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Planaggregate);
(iii1) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect of any of its capital stock,
(2) split, with respect to combine or reclassify any of its capital stock (except or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for any dividend or distribution by a subsidiary shares of the Company to the Company or another wholly owned subsidiary of the Company);its capital stock, or
(iv3) reclassifypurchase, combine, split, subdivide, redeem, purchase redeem or otherwise acquire any of its outstanding securities, including, without limitation, shares of capital stock Company Common Stock or any option, warrant or right, directly or indirectly, to acquire shares of the Company (Common Stock, except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options outstanding options or the lapse of restrictions warrants in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesaccordance with their terms;
(v1) make any acquisition of acquire (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose (including the creation of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contractssubsidiary);
(vii2) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personperson or, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than except in the ordinary course of business consistent with past practice, pursuant to letters of credit make any loans or otherwiseadvances;
(x3) except enter into or amend any material contract or agreement which changes the current relationship with a vendor or supplier ;
(4) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $ 20,000; or
(5) enter into or amend any contract, agreement, commitment or arrangement to effect any of the extent required under any Employee Benefit Plan or as required matters prohibited by applicable law, this Section 4.1(e);
(Af) increase the compensation payable or fringe benefits of any of to become payable to its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors employees, or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting employment or severance agreement with any director, officer 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, termination, severance or other plan, agreement, trust, fund, policy or arrangement with for the benefit of any of its present current or former directors, officers or other employees, except for offers 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 employment 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), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into or amend reserved against in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth the financial statements contained in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory Financial Statements or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xviij) materially change any of its business policies;
(xviii) have operating expenses other than non cash charges in excess of $100,000 per month excluding the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businessescosts related to the transactions contemplated by this Agreement; or
(xixk) take, or agree to take take, any action which would make any of the actions described representations or warranties of the Company contained in Section 5.1(a)(i) through Section 5.1(a)(xviii)this Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
(b) Between SECTION 4.2: Conduct of Business by Parent Pending the Merger. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, Parent covenants and agrees that, unless the Company will timely file all reports required shall otherwise agree in writing, Parent shall conduct its business, and cause the businesses of its subsidiaries to be filed under all United States securities laws conducted, in the ordinary course, other than actions taken by Parent or its subsidiaries in contemplation of the Merger, and regulations shall not directly or indirectly do, or propose to do, any of the following without the prior written consent of the Company:
(a) amend or otherwise change Parent's Certificate of Incorporation or By-Laws;
(b) 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 subsidiary of Parent may declare and by the American Stock Exchange.pay a dividend to its parent; or
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly take or indirectly, agree in writing or otherwise to take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in which would make any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger representations or the other transactions contemplated by warranties of Parent contained in this AgreementAgreement untrue or incorrect or prevent Parent from performing or cause Parent not to perform its covenants hereunder.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) Between The Company covenants and agrees that, except as contemplated by this Agreement, between the date of this Agreement and the Effective Time, except as unless the Buyer shall otherwise contemplated by this Agreementagree in writing, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 Business of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted only in its the Company, and the Company shall not take any action except in, the usual, regular and ordinary course of business and the Company will generally conduct its business in substantially the same way as heretofore conducted, and without limiting the foregoing, the Company will continue to operate in the same geographic markets serving the same market segments. The Company shall use its reasonable best efforts to preserve substantially intact the business organization of the Company, to keep available the present services of the officers, employees and consultants of the Company and to preserve the current relationships and goodwill of the Company with customers, suppliers and other persons with which the Company has business relationships. Without limiting the generality of the foregoing, the Company shall:
(i) maintain in full force and effect all contracts of insurance and indemnity specified in any Schedule hereto;
(ii) repair and maintain all of its tangible properties and assets in accordance with its usual and ordinary repair and maintenance standards;
(iii) continue to apply in full the same rigorous credit review process used by the Company prior to the Closing in determining the extent to which it will extend credit to customers or potential customers in the ordinary course of business;
(iv) notify the Buyer of any material emergency or other material change in the operation of its business organizationor properties and of any governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated).
(b) By way of amplification and material business relationshipsnot limitation of clause (a) above, (B) the Company shall perform its obligations under not between the date of this AgreementAgreement and the Effective Time, and (C) without limiting the foregoingdirectly or indirectly do, neither the Company nor or publicly announce an intention to do, any of the following without the prior written consent of Buyer through one of its subsidiaries shall:authorized representatives (which representatives shall be each of its Chief Executive Officer, President and Chief Financial Officer):
(i) amend or otherwise change its Certificate of Incorporation Organizational Documents or By-Laws laws or any similar governing instrumentsequivalent organizational documents;
(ii) issue, deliver, sell, pledge, dispose of, grant, encumber, or authorize the issuance, delivery, sale, pledge, disposition, grant or encumbrance of, any Equity Interests of or encumber any shares of capital stock, ownership interests or voting securitiesthe Company, or any options, warrants, convertible securities or other rights of any kind to acquire any such Equity Interests, or receive any shares of capital stock, any other ownership interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments)interest, of the Company Company, or enter into any agreement with respect to any of its subsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or foregoing, other than in connection with other stock-based awards outstanding as the Stock Warrant Agreement and upon exercise of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)Options;
(iii) declare, set aside, make or pay any distribution (by way of dividend or other distribution, payable in cash, stock, property or otherwise, ) with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company)Equity Interests;
(iv) reclassify, combine, split, subdividecombine or reclassify any of its Equity Interests or issue or authorize or propose the issuance of any other securities in respect of, redeem, purchase or otherwise acquire any shares in lieu of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariessubstitution for its Equity Interests;
(v) make repurchase, redeem or otherwise acquire any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all Equity Interests of the assets)Company, or make any investment in securities convertible into or exercisable for any interest in, any corporation, partnership or other business organization or division thereofof the Equity Interests of the Company;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) enter into any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course new line of business or pursuant to existing Contractsmaterially expand the business currently conducted by the Company;
(vii) acquire or agree to acquire, by merging or consolidating with, or by purchasing an equity interest in or a portion of the assets of, or by any other than in the ordinary course of manner, any business consistent with past practiceor any corporation, enter into partnership, other business organization or amend in any division thereof or any material respect any Contractamount of assets;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, increase the aggregate amounts owed under the Company's existing credit facilities or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any personindividual, corporation or other entity, or make any loans, advances loan or capital contributions to any other person advance;
(other than a subsidiary of the Companyix) lower or otherwise alter its credit card fraud review process (as more fully described in Exhibit 6.01), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;; ------------
(x) except to authorize any capital expenditures of more than $25,000 in the extent required under any Employee Benefit Plan or as required aggregate (other than expenditure listed on Schedule 6.01(b)(x) and previously approved by applicable law, Buyer);
(xi) (A) (x) adopt, amend, renew or terminate any plan or any agreement, arrangement, plan or policy between the Company and one or more of its current or former directors, officers or employees, or (y) increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan or agreement as in effect as of its directorsthe date hereof (including, officers without limitation, the granting of stock options, stock appreciation rights, restricted stock, restricted stock units or employees performance units or shares); or (B) enter into, modify or renew any employment, severance or other agreement with any director, officer or 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, termination, severance, retention or other plan, agreement, trust, fund, policy or arrangement providing for any benefit to any director, officer or employee;
(xii) pay any bonus or any compensation other than base compensation, except in for payments of bonuses and other incentive compensation to sales personnel pursuant to and consistent with the ordinary course of business written sales incentive plan which has been provided to and approved by Buyer;
(xiii) take any action with respect to employees who are not directors accounting methods, principles or officers)practices, other than changes required by applicable law or GAAP or regulatory accounting as concurred in by the Company's independent accountants;
(Bxiv) grant make any severance tax election or termination pay not provided for under settle or compromise any Employee Benefit Planfederal, state, local or foreign tax liability; (Cxv) enter into pay, discharge or satisfy any employmentclaim, consulting liability or severance agreement obligation, other than the payment, discharge or arrangement with any of its present or former directorssatisfaction, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 5.01. Conduct of Business of by the Company Pending the Merger.
(a) Between The Company agrees that, between the date of this Agreement and the earlier of the Effective TimeTime and the termination of this Agreement pursuant to Article VIII, except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 5.01 of the Company Disclosure ScheduleSchedule or as expressly contemplated by any other provision of this Agreement, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheldwithheld or delayed):
(i) the Company shall, delayed or conditioned)and shall cause each Company Subsidiary to, (A) use its reasonable best efforts to conduct the business of the Company and its subsidiaries shall be conducted the Company Subsidiaries, in its all respects material to the Company and the Company Subsidiaries, taken as a whole, in the ordinary course of business and in a manner consistent with past practice; and
(ii) the Company shall, and shall cause each Company Subsidiary to, use its reasonable best efforts to preserve substantially intact its the business organization, and material business relationships, (B) organization of the Company shall perform its obligations under and the Company Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Company Subsidiaries and to preserve the current relationships of the Company and the Company Subsidiaries with customers, suppliers and other persons with which the Company or any Company Subsidiary has significant business relations.
(b) By way of amplification and not limitation of Section 5.01(a), except as contemplated by any other provision of this Agreement, and (C) without limiting Agreement or as set forth in Section 5.01 of the foregoingCompany Disclosure Schedule, neither the Company nor any Company Subsidiary shall, between the date of its subsidiaries shall:this Agreement and the earlier of the Effective Time and the termination of this Agreement pursuant to Article VIII, 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):
(i) amend or otherwise change its Certificate of Incorporation or By-Laws laws or any similar governing instrumentsequivalent organizational documents;
(ii) issue, deliver, sell, pledge, dispose of of, grant or encumber encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (A) any shares of any class of capital stock, ownership interests stock of the Company or voting securitiesany Company Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of such capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instrumentsinterest), of the Company or any of its subsidiaries Company Subsidiary (except for (A) the issuance of up to a maximum of 6,715,239 shares of Company Class A Common Shares upon Stock issuable pursuant to employee stock options or up to a maximum of 23,625,885 shares of Company Class A Common Stock issuable pursuant to the exercise of Options or in connection with other stock-based awards outstanding as terms of the Company Convertible Subordinated Notes outstanding on the date of this Agreementhereof, in each case, the ordinary course of business and in a manner consistent with past practice in accordance with the terms of any the Company Stock Option Plan, Plans or such notes as in effect as of the date hereof) or (B) issuances any assets of the Company or any Company Subsidiary, except in accordance the ordinary course of business and in a manner consistent with the Rights Plan)past practice;
(iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (stock, except for dividends by any dividend direct or distribution by a subsidiary of the indirect wholly owned Company Subsidiary to the Company or another wholly owned subsidiary of the Company)any other Company Subsidiary;
(iv) reclassify, combine, split, subdivide, subdivide or redeem, or purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options acquire, directly or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan)indirectly, or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiariesits capital stock;
(vA) make any acquisition of acquire (whether including, without limitation, by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), assets or make any investment in any interest in, other business combination) any corporation, partnership or partnership, other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose any material amount of any assets, other than sales or dispositions ; (B) except for borrowings under existing credit facilities in the ordinary course of business or pursuant to existing Contracts;
(vii) other than and in the ordinary course of business a manner consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, 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 loansloans or advances, advances or capital contributions to grant any other person security interest in any of its assets; (other than a subsidiary of the Company), in each case, C) enter into any contract or agreement other than in the ordinary course of business and in a manner consistent with past practice that, if in effect on the date hereof, would qualify as a Company Material 49 Contract; (D) make, authorize or make any commitment with respect to any capital expenditure, except for capital expenditures that, in the aggregate for each quarter, do not exceed 125% of the budgeted amounts set forth in the Company's capital expenditure budget attached as Section 5.01(b)(v) of the Company Disclosure Schedule; or (E) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 5.01(b)(v);
(vi) make any investment in any entity (other than a subsidiary) in excess of $25 million;
(vii) 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 in a manner consistent with past practice or as required by applicable Law in salaries or wages of employees of the Company or any Company Subsidiary who are not directors or officers of the Company, or grant any severance or termination pay to (other than pursuant to existing contractual obligations disclosed in Section 3.10(a) of the Company Disclosure Schedule or in the ordinary course of business and in a manner consistent with past practice), or enter into any employment or severance agreement with any director, officer or other employee of the Company or of any Company Subsidiary, or, except as required by Law, 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 director, officer or employee; provided that the Company and Parent hereby agree that, notwithstanding the foregoing, award grants may be made to employees of the Company and the Company Subsidiaries pursuant to the ChipPAC, Inc. Employee Retention Plan and the ChipPAC, Inc. Special Bonus Plan as contemplated in Section 6.05(c);
(A) exercise its discretion with respect to or otherwise voluntarily accelerate the vesting of any Company Stock Award as a result of the Merger, any other change of control of the Company (as defined in the Company Stock Option Plans) or otherwise; or (B) exercise its discretion with respect to or otherwise amend, modify or supplement the Purchase Plan;
(ix) make any change in any material method of accounting, method of accounting principles or practice, except for such change required by reason of a concurrent change in GAAP or compliance with the applicable requirements of the rules and regulations promulgated by the SEC;
(x) make any tax election inconsistent with past custom and practice or settle or compromise any material United States federal, state, local or non-United States income tax liability inconsistent with any accrual or reserve therefor on the consolidated balance sheet of the Company and the consolidated Company Subsidiaries as of September 30, 2003; 50
(xi) 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 the ordinary course of business and in a manner consistent with past practice, pursuant to letters of credit liabilities reflected or otherwisereserved against in the consolidated balance sheet of the Company and the consolidated Company Subsidiaries as at September 30, 2003 or subsequently incurred in the ordinary course of business and in a manner consistent with past practice;
(xxii) except amend, modify or consent to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits termination of any Material Company Contract, or amend, waive, modify or consent to the termination of its directors, officers the Company's or employees any Company Subsidiary's material rights thereunder;
(xiii) commence any Action (except in the ordinary course of business with respect to employees who are not directors against third parties) or officers), settle any Action (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officersbusiness, (D) establish, adopt, enter into or amend in it being understood that any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of settlement involving the payment by the Company Disclosure Schedule;
(xi) make or any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other Company Subsidiary of more than $500,000 is not in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008business);
(xiv) waive permit any right item of value material Company Owned Intellectual Property to lapse or to be abandoned, dedicated or disclaimed, by failing to perform or make any applicable filings, recordings or other similar actions or filings, or by failing to pay all required fees and taxes required or advisable to maintain and protect its interest in each and every item of Company Owned Intellectual Property, except where the Company or any subsidiary failure to make such filings and payments results from the exercise of the Companyreasonable business judgment;
(xv) adopt a plan of liquidation sell, assign or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization license any of the Company or any subsidiary Owned Intellectual Property, except for licensing of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than Owned Intellectual Property in the ordinary course of business consistent with past practice;
(xvi) fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder; or
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practiceannounce an intention, enter into any lease (as lessor formal or lessee); sell, abandon informal agreement or otherwise make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree a commitment to take do any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii)foregoing.
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 1 contract
Sources: Agreement and Plan of Merger and Reorganization (St Assembly Test Services LTD)
Conduct of Business Pending the Merger. Section 5.1 SECTION 4.01. Conduct of Business of by the Company Pending the Merger.
(a) Between . 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 or the Effective Time, unless Beta shall otherwise agree in writing, and except as otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 4.01 of the Company Disclosure Schedule, as required by law or unless Parent the Company shall otherwise consent in writing (which consent conduct its business and shall cause the businesses of its subsidiaries to be conducted only in, and the Company and its subsidiaries shall not be unreasonably withheldtake any action except in, delayed or conditioned), (A) the ordinary course of business and in a manner consistent with past practice; and the Company shall use 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 shall be conducted in its ordinary course and to preserve the present relationships of business and the Company shall use and its reasonable best efforts to preserve substantially intact its business organizationsubsidiaries with customers, suppliers and material business relationships, (B) other persons with which the Company shall perform or any of its obligations under subsidiaries has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, and (C) without limiting the foregoing, 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 the Effective Time, and except as set forth in Section 4.01 of the Company Disclosure Schedule, directly or indirectly do, or propose to do, any of the following without the prior written consent of Beta, which will not be unreasonably withheld or delayed:
(ia) amend or otherwise change its Certificate the Company's Restated Articles of Incorporation or By-Laws or any similar governing instrumentsLaws;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests 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 under the Company Stock Option Plans, which options are outstanding on the date hereof, or pursuant to the Company Stock Purchase Plan as in effect on the date hereof);
(c) sell, pledge, dispose of or encumber any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), assets of the Company or any of its subsidiaries (except for (Ai) sales of assets in the issuance ordinary course of Common Shares upon 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 $20,000,000 in the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Planaggregate);
(iiii) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property except that a wholly-owned subsidiary of the Company may declare and pay a dividend to its parent, except in no case may the aggregate of such intercompany cross-border dividends exceed $10,000,000, and except that the Company may declare and pay prior to the Effective Time quarterly cash dividends of $0.27 per share consistent with past practice, (ii) split, combine or otherwise, with respect to reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, (iii) except for as required by the terms of any dividend or distribution by a subsidiary security as in effect on the date hereof and set forth in Section 4.01(d) of the Company Disclosure Schedule, amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary to amend the terms or change the period of exercisability of, 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 any such securities, or propose to do any of the foregoing, or (iv) settle, pay or discharge any claim, suit or other action brought or threatened against the Company with respect to or another wholly owned subsidiary arising out of a shareholder equity interest in the Company);
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth those listed on Section 3.8 4.01(e) of the Company Disclosure Schedule;
; (ixii) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, except for borrowings and reborrowing under the Company's existing credit facilities or other borrowings not in excess of $15,000,000 plus the amount, if any, used under such credit facilities as required to fund the Company's Rabbi Trust in the aggregate or issue any debt securities or assume, guarantee (other than guarantees of the Company's subsidiaries entered into in the ordinary course of business) or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loansloans or advances, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than except in the ordinary course of business consistent with past practice; or (iii) authorize any capital expenditures or purchases of fixed assets which are, pursuant in the aggregate, in excess of $500,000,000 over the next 12 month period; or (iv) enter into or materially amend any contract, agreement, commitment or arrangement to letters effect any of credit or otherwisethe matters prohibited by this Section 4.01(e);
(xf) except to as set forth in Section 4.01(f) of the extent required under any Employee Benefit Plan or as required by applicable lawCompany Disclosure Schedule, (A) increase the compensation or fringe benefits of any of severance payable or to become payable to its directors, officers or employees, except for increases in salary or wages of employees of the Company or its subsidiaries in accordance with past practices, or grant any severance or termination pay (except to make payments required to be made under obligations existing on the date hereof in accordance with the terms of such obligations) to, or enter into any employment or severance agreement, with any new employee of the Company or any of its subsidiaries, except for an agreement entered into in the ordinary course of business with respect and providing for annual base and bonus compensation not to employees who are not directors exceed $200,000, or officersestablish, adopt, enter into or amend any collective bargaining agreement, Company Employee Plan (within the meaning of Section 2.11 of this Agreement), (B) grant any severance or termination pay not provided for under any Employee Benefit Plantrust, (C) enter into any employmentfund, consulting or severance agreement policy or arrangement with for the benefit of any of its present current or former directors, officers or other employeesemployees or any of their beneficiaries, except, in each case, as may be required by law or as would not result in a material increase in the cost of maintaining such collective bargaining agreement, Company Employee Plan, trust, fund, policy or arrangement.
(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) except as required by a change in GAAP occurring after the date hereof;
(h) make any material tax election inconsistent with past practice or settle or compromise any material United States federal, state, local or non-United States tax liability, except to the extent the amount of any such settlement has been reserved for offers in the financial statements contained in the Company SEC Reports filed prior to the date of employment this Agreement or other settlements not in excess of $10,000,000 in the aggregate;
(i) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $10,000,000 in the aggregate, other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into or amend reserved against in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth the financial statements contained in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate SEC Reports filed prior to conform to changes in statutory the date of this Agreement or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixj) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.01(a) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that wouldabove, or any action which would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation make any of the Merger representations or warranties of the Company contained in this Agreement or the other transactions contemplated by this Stock Option Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder or under the Stock Option Agreement.
Appears in 1 contract
Sources: Merger Agreement (Amp Inc)
Conduct of Business Pending the Merger. Section 5.1 SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) Between . 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 or the Effective Time, except unless Parent shall otherwise agree in writing or as otherwise contemplated by this Agreement, as disclosed the Company shall, and the Stockholder shall cause the Company to, conduct its business only in, and the Company shall not, and the Stockholder shall cause the Company not to, take any action except in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and in a manner consistent with past practice other than actions taken by the Company in contemplation of the Merger; and the Company shall, and the Stockholder shall cause the Company to, use its all reasonable best commercial efforts to preserve substantially intact its the business organizationorganization of the Company, to keep available the services of the present officers, employees and material consultants of the Company and to preserve the present relationships of the Company with customers, suppliers and other persons with which the Company has business relationshipsrelations. By way of amplification and not limitation, (B) except as contemplated by this Agreement, the Company shall perform its obligations under this Agreementnot, and (C) without limiting the foregoing, neither Stockholders shall cause the Company nor not to, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectly do, or propose to do, any of its subsidiaries shallthe following without the prior written consent of Parent:
(ia) amend or otherwise change its the Certificate of Incorporation or By-Laws or any similar governing instrumentsof the Company except pursuant to the Merger Agreement;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interests interest (including, without limitation, any phantom interest) in the Company;
(c) sell, pledge, dispose of or encumber any voting securities assets (including but not limited to stock appreciation rights, phantom stock tangible or similar instruments), intangible) of the Company or any of its subsidiaries (except for (Ai) dispositions of obsolete or worthless assets, (ii) sales of assets not in excess of $25,000 in the issuance aggregate and (iii) sales of Common Shares upon assets in the exercise ordinary course of Options or business and in connection a manner consistent with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan)past practice;
(iiid) (i) declare, set aside, make or pay any dividend or other distribution, payable distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, property (ii) split, combine or otherwise, with respect to reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (except for iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, any dividend of its securities including without limitation, shares of Company Common Stock or distribution by a subsidiary any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock, or propose to do any of the Company to the Company or another wholly owned subsidiary of the Company)foregoing;
(ivi) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation consolidation, or acquisition of stock or substantially all of the assets), or make any investment in any interest in, ) any corporation, partnership or other business organization or division thereof;
; (viii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions except in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings and only under the Company’s existing credit facilities's revolving line of credit, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, money or issue any debt securities or assume, guarantee or endorse, endorse or otherwise as an accommodation become responsible for, the obligations of any personperson or, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than except in the ordinary course of business consistent with past practice, pursuant make any loans or advances; (iii) enter into or amend any material contract or agreement; (iv) authorize any capital expenditures or purchases of fixed assets which are, in the aggregate, in excess of $50,000 for the Company and its subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement to letters effect any of credit or otherwisethe matters prohibited by this Section 4.1(e);
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (Af) increase the compensation payable or fringe benefits of any of to become payable to its directorsofficers, officers increase compensation payable or to become payable to its employees (except other in the ordinary course of business with respect to employees who are not directors business, or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Planto, (C) or enter into any employment, consulting employment or severance agreement with any director, officer or other employee of the Company or 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 with for the benefit of any of its present current or former directors, officers or other employees, except, in each case, as may be required by law;
(g) except for offers as required under a new pronouncement that constitutes generally accepted accounting principles, take any action to change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of employment 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), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice with employees who are not directors of liabilities reflected or officers, (D) establish, adopt, enter into reserved against in the Financial Statements or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than incurred in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xixj) take, or agree in writing or otherwise to take take, any of the actions described in Section 5.1(a)(iSections 4.1 (a) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that wouldabove, or any action which would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation make any of the Merger representations or warranties of the other transactions contemplated by Company contained in this AgreementAgreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 5.1 SECTION 4.01. Conduct of Business of by the Company Pending the Merger.
(a) Between . During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company covenants and agrees that, unless Parent shall otherwise agree in writing or as required or permitted under this Agreement, the Company shall conduct its business and shall cause the business 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; and the Company shall use 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 subsidiary has significant business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, Agreement and except as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 4.01 of the Company Disclosure Schedule, as required by law or unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), (A) the business of the Company and its subsidiaries shall be conducted in its ordinary course of business and the Company shall use its reasonable best efforts to preserve substantially intact its business organization, and material business relationships, (B) the Company shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any subsidiary shall, during the period from the date of its subsidiaries shallthis Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its Certificate the Company's certificate of Incorporation incorporation or By-Laws or any similar governing instrumentsbylaws;
(iib) issue, deliver, sell, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of Company capital stock, ownership interests or voting securitiesstock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of Company capital stock, or any other ownership interests or interest (including, without limitation, any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), interest) of the Company Company, any subsidiary or any of its subsidiaries (affiliates, except for (A) the issuance of Common Shares upon (i) options under the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect Plans to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company purchase up to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any 2,000,000 shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or in order Stock granted to pay taxes in connection with the exercise of Options or the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of the Company’s subsidiaries;
(v) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or otherwise sell or dispose of any assets, other than sales or dispositions employees in the ordinary course of business or pursuant business, which options shall have exercise prices no less than the fair market value at the time of grant and (ii) shares of Company Common Stock issuable to existing Contracts;
(vii) other than participants in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(viii) authorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set forth on Section 3.8 of the Company Disclosure Schedule;
(ix) except for borrowings under the Company’s existing credit facilities, incur or modify in any material respect in an manner adverse to the Company the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment 's employee stock purchase plan in the ordinary course of business and consistent with past practice with employees who are not directors upon issuance of outstanding Stock Options granted under the Company Stock Option Plans;
(c) sell, pledge, dispose of or officers, (D) establish, adopt, enter into encumber any assets or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 inventory of the Company Disclosure Schedule;
or of any subsidiary (xiexcept for (i) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory sales of assets or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than inventory in the ordinary course of business or as required by applicable lawbusiness, (Aii) make any Tax election dispositions of obsolete or change any method worthless assets, and (iii) pledges of accountingassets pursuant to existing agreements, (B) or agreements the Company is permitted to enter into any settlement in connection with the purchase of assets), or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(xvii) materially change any of its business policies;
(xviii) other than in the ordinary course of business consistent with past practice, enter into any lease (as lessor or lessee); sell, abandon or make any other disposition of any of its assets, properties or businesses; grant or suffer any Lien on any of its assets, properties or businesses; or
(xix) agree to take any of the actions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to result in any damage to, individually destruction or in the aggregate, prevent, materially delay or materially impede the consummation loss of any material asset of the Merger Company (whether or the other transactions contemplated not covered by this Agreement.insurance);
Appears in 1 contract
Sources: Agreement and Plan of Reorganization and Merger (E Tek Dynamics Inc)