Conduct of the Business Pending the Closing. (a) From the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”), except (i) as set forth in Section 6.01 of the Disclosure Letter, (ii) as required by applicable Law, (iii) as expressly contemplated by this Agreement or the other Transaction Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (v) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, (A) conduct their business in the Ordinary Course of Business, in all material respects, and (B) use commercially reasonable efforts to (1) preserve substantially intact their business organization and assets in all material respects; (2) preserve their current relationships with customers, suppliers, and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially the same condition as they exist as of the date of this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b). (b) During the Interim Period, except (v) as set forth in Section 6.01 of the Disclosure Letter; (w) as required by applicable Law; (x) as expressly contemplated by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (z) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall not and shall cause its Subsidiaries not to: (i) transfer, grant, issue, sell, authorize, encumber or dispose of any Equity Interests of the Company or any of its Subsidiaries or any options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom stock or other similar right with respect to, the Company or any of its Subsidiaries; (ii) effect any recapitalization, or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Equity Interests of the Company or any of its Subsidiaries, or make any other similar change in the capitalization of the Company or any of its Subsidiaries; (iii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company or any of its Subsidiaries, or effect any of the foregoing; (iv) amend the Organizational Documents of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise); (v) make any material change in any method of accounting or accounting practice of the Company or any of its Subsidiaries, except as required by changes in GAAP; (vi) make any material loans or material advances or capital contributions to, or investments in, any Person (other than the Company and its Subsidiaries), or forgive any Indebtedness for borrowed money, except for advances to employees or officers of the Company or any of its Subsidiaries for expenses incurred in the Ordinary Course of Business; (vii) merge or consolidate with or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint venture, strategic alliance, or similar Contract; (viii) amend, waive, modify or consent to the termination of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Business; (ix) make any capital expenditures or commitments therefor that, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000; (x) sell, transfer, lease, sublease, mortgage, pledge or otherwise encumber or dispose of any of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business; (xi) amend, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Business; (xii) enter into any Contract materially limiting in any way the ability of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business; (xiii) commence any Proceeding, other than (A) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature; (xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company); (xv) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed money; (xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter; (xvii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts; (xviii) make (except in the Ordinary Course of Business), change or revoke any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law; (xix) settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries; (xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business; (xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of Business; or (xxii) resolve, commit, enter into any Contract, or otherwise become obligated, to do anything prohibited by this Section 6.01(b). (c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiaries. (d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto. (e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 1 contract
Sources: Stock Purchase Agreement (Huntington Ingalls Industries, Inc.)
Conduct of the Business Pending the Closing. (a) From Prior to the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”)Closing, except (iw) as set forth in Section 6.01 of the Disclosure Letteron Schedule 6.2(a), (iix) as required by applicable Law, (iiiy) as otherwise expressly contemplated by this Agreement or any of the other Transaction Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (v) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, (A) conduct their business in the Ordinary Course of Business, in all material respects, and (B) use commercially reasonable efforts to (1) preserve substantially intact their business organization and assets in all material respects; (2) preserve their current relationships with customers, suppliers, and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially the same condition as they exist as of the date of this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b).
(b) During the Interim Period, except (v) as set forth in Section 6.01 of the Disclosure Letter; (w) as required by applicable Law; (x) as expressly contemplated by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (z) with the prior written consent of Buyer (which such consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed), Seller shall cause the Company, WS Holdings and its Subsidiaries to, and the Company shall:
(i) conduct the Business in the Ordinary Course of Business (for the avoidance of doubt, a slow down or halt in the pace of new franchise sales during the pendency of the Transaction shall be deemed to be operating in the Ordinary Course of Business); and
(ii) use its commercially reasonable efforts to (A) preserve the present business operations, organization and goodwill of the Company, (B) keep available the services of its and its Affiliates’ officers, employees and representatives engaged in the Business, and (C) preserve the present relationships with the customers of (including its franchisees), the Company shall suppliers of and any other Persons that have material business relations with the Company.
(b) Other than (w) as set forth on Schedule 6.2(b), (x) as required by applicable Law, (y) as otherwise expressly contemplated by this Agreement or any of the Transaction Documents, or (z) with the prior written consent of Buyer (such consent not and to be unreasonably withheld, conditioned or delayed), Seller shall cause the Company and WS Holdings and its Subsidiaries not to, and the Company shall not:
(i) transfer, grant, issue, sell, authorizepurchase, encumber redeem, pledge or dispose of encumber, retire or grant any Equity Interests equity interests of the Company or any of its Subsidiaries or grant any options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of(including upon conversion, exchange or any stock appreciationexercise of convertible, phantom stock derivative or other similar right with respect to, securities) equity interests of the Company or any of its SubsidiariesCompany;
(ii) effect any recapitalization, or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, amend the terms of any of the Equity Interests Company’s capital stock or issue or authorize the issuance of the Company any other securities in respect of, in lieu of, or any in substitution for, shares of its Subsidiaries, or make any other similar change in the capitalization of the Company or any of its Subsidiariescapital stock;
(iii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company Company, declare or pay any dividends or distributions on or in respect of any of its Subsidiariesequity interests or redeem, repurchase or effect acquire any of the foregoingits equity interests;
(iv) amend the Organizational Documents certificate of formation, limited liability company agreement or other organizational documents of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise)Company;
(v) make other than as required by applicable Law or by the terms of any material such Seller Benefit Plan or similar Contract in effect on the date hereof and set forth on Schedule 4.13(a), (A) increase or accelerate the vesting or payment of the compensation or benefits payable or available to any Business Employee, other than annual salary and wage rate increases for 2018 in the Ordinary Course of Business not in excess of 4% per person, or (B) adopt, establish, amend or terminate any Seller Benefit Plan, or any agreement, plan, policy or arrangement that would constitute a Seller Benefit Plan if it were in existence on the date hereof, in each case, other than the renewal of group health or welfare plans made in the Ordinary Course of Business and applicable Law that do not materially increase the costs to the Company under such plans;
(vi) terminate (other than for cause), promote or change the title of any Business Employee (retroactively or otherwise) with an annual compensation of $100,000, other than the promotion or hiring of replacement employees in any method the Ordinary Course of accounting or accounting practice Business and to the extent that compensation expense of the Company would remain within the budgets of the Company following the hiring or promotion of such Persons;
(vii) enter (or commit to enter) into, amend, terminate or extend any collective bargaining or similar agreement, union Contracts or other Contracts with any labor union, works council, or associate representing any Business Employee (or enter into negotiations to do any of the foregoing);
(viii) enter into any commitment for capital expenditures of the Company to be made following the Closing in excess of $100,000 individually or $250,000 in the aggregate;
(ix) permit the Company to acquire (whether by merger or consolidation with, purchase of a substantial portion of or by any other manner) any properties, assets or businesses in excess of $100,000 individually or $250,000 in the aggregate, or sell, assign, license (other than pursuant to a Franchise Agreement), transfer, convey, otherwise dispose of or encumber or pledge any material properties or assets of the Company, including by entering into any Contract or commitment for the purchase, lease, sublease, license, sublicense, occupancy or other direct or indirect transfer of any real property;
(x) permit the Company to (i) change its Subsidiariespresent accounting methods or principles, except as required by changes GAAP; (ii) accelerate or delay the collection of accounts receivable, defer payment of accounts payable or otherwise alter or amend any working capital procedures and practices; or (iii) engage in GAAP;
(vi) make any material loans or material advances or capital contributions topromotional sales, discount activity, or investments indeferred revenue activity, any Person (other than the Company and its Subsidiaries), or forgive any Indebtedness for borrowed money, except for advances to employees or officers of the Company or any of its Subsidiaries for expenses incurred in the Ordinary Course case of Business;
clause (viiii) merge or consolidate with or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint venture, strategic alliance, or similar Contract;
and (viiiiii) amend, waive, modify or consent to the termination of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Business;
(ix) make any capital expenditures or commitments therefor that, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(x) sell, transfer, lease, sublease, mortgage, pledge or otherwise encumber or dispose of any of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in a manner outside the Ordinary Course of Business;
(xi) amendpermit the Company to incur any Indebtedness in excess of $250,000 in the aggregate;
(xii) permit the Company to settle, extendcompromise, renewassign, terminate release, waive or abandon any pending or threatened Legal Proceeding except any settlements which provide only for the payment of monetary damages, which amounts would paid in full prior to the Closing;
(xiii) permit the Company to commence any Legal Proceeding;
(xiv) permit the Company to enter into any lease Contract with a Related Person other than Franchise Agreements that will be terminated as of real Closing;
(xv) permit the Company to abandon, modify, waive, terminate, fail to renew, or personal property allow to lapse or permit any renewals thereof involving a term of more other change to any License;
(xvi) other than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Business;
(xii) , terminate or amend any Company Contract or waive, release or assign any material rights, benefits or claims thereunder or enter into any a Contract materially limiting that would be deemed a Company Contract if in any way effect on the ability of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business;
(xiii) commence any Proceeding, other than (A) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries date hereof (other than with respect to a dividend Contracts entered into or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company);
(xv) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed money;
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals necessary in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter;
(xvii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) offer or sell any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); franchise in contravention of applicable Law or (B) offer or sell any franchise outside the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate ContractsUnited States;
(xviii) make (except in the Ordinary Course of Business), change or revoke any material Tax electionchange to the terms of the Company’s policies or procedures with respect to its relationships with any of its franchisees, change including any material accounting period change to the terms of policies relating to franchisee rent, royalty or advertising funds or any new material accounting method for Tax purposesprogram or plan, file or any material amended modification to any existing program or plan providing any franchisee incentives or franchisee economic assistance;
(xix) permit the Company to make an election to be treated as a corporation under the Code;
(xx) file or cause to be filed any Tax Return with respect to the Company other than in accordance with past practice or as required by applicable Law, amend any Tax Return, enter into any closing agreement, settlement, or compromise of make or change any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law;
(xix) settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Businesselection;
(xxi) abandon or permit the lapse Company to enter into or agree to enter into any merger or consolidation with any corporation or other entity, or acquire the securities or debt of any material Intellectual Property rights other Person or make any other material intangible asset used loans or advances to any Person or investments in the operation of the business of any Person;
(xxii) permit the Company to adopt any plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization or file a petition in bankruptcy under any provisions of its Subsidiaries except in federal or state bankruptcy Law or consent to the Ordinary Course filing of Businessany bankruptcy petition against it under any similar Law; or
(xxiixxiii) resolve, commit, enter into any Contract, or otherwise become obligated, agree to do anything prohibited by this Section 6.01(b)any of the foregoing or take any action or omission that would result in any of the foregoing.
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiaries.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing anything contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Sellercontrary, the Company shall be permitted to maintain through the Closing Date the cash management systems of the Company, maintain the cash management procedures as currently conducted by the Company, and its Subsidiaries shall exercise, periodically settle intercompany balances consistent with past practices (including through dividends and capital contributions and all such intercompany balances shall be settled at the terms and conditions of Closing in accordance with their terms). Notwithstanding the restrictions set forth in Section 6.2(b)(iii) or elsewhere in this Agreement, complete control the Company is allowed to dividend all Cash and supervision over their respective businesses and operationsCash Equivalents of the Company to Seller on or prior to Closing; provided that any such dividends (including any dividends anticipated to be made following delivery of the Estimated Closing Statement) are taken into consideration in the calculation of Estimated Cash.
Appears in 1 contract
Sources: Unit Purchase Agreement (Choice Hotels International Inc /De)
Conduct of the Business Pending the Closing. (a) From Prior to the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”)Closing, except (i) as set forth in Section 6.01 of the Disclosure Letteron Schedule 7.2, (ii) as required by applicable Law, (iii) as expressly contemplated by otherwise set forth in this Agreement or the other Transaction Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (v) with the prior written consent of Buyer Parent (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, :
(Ai) conduct their business the respective businesses of the Company and its Subsidiaries only in the Ordinary Course of Business, in all material respects, and ; and
(Bii) use its commercially reasonable efforts to (1) preserve substantially intact their the present business operations, organization and assets in all material respects; (2) preserve their current relationships with customers, suppliers, and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially the same condition as they exist as goodwill of the date of this Agreement, ordinary wear Company and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b)Subsidiaries.
(b) During the Interim Period, except Except (vi) as set forth in Section 6.01 of the Disclosure Letter; on Schedule 7.2, (wii) as required by applicable Law; , (xiii) as expressly otherwise contemplated by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (ziv) with the prior written consent of Buyer Parent (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall not not, and shall cause not permit its Subsidiaries not to:
(i) transferdeclare, grantset aside, issue, sell, authorize, encumber make or dispose pay any dividend or other distribution in respect of any Equity Interests of the equity interests in the Company or any of its Subsidiaries or any optionsrepurchase, warrants, convertible securities calls or other rights to purchase redeem or otherwise acquire Equity Interests of, or any stock appreciation, phantom stock outstanding units of membership interest or other similar right with respect toownership interests in, the Company or any of its Subsidiaries;
(ii) effect issue or sell any recapitalizationequity interest or other securities of the Company or any of its Subsidiaries or grant options, warrants, calls or otherwise reclassify, combine, split, subdivide or redeem, or other rights to purchase or otherwise acquire, directly acquire equity interests or indirectly, any of the Equity Interests other securities of the Company or any of its Subsidiaries;
(iii) effect any recapitalization, reclassification or make any other similar like change in the capitalization of the Company or any of its Subsidiaries;
(iiiiv) adopt a plan amend the certificate of complete formation or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization LLC Agreement or other reorganization with respect to comparable organizational documents of the Company or any of its Subsidiaries, or effect the terms of any of the foregoing;
(iv) amend the Organizational Documents of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise)equity security;
(v) make other than as required by Law, (A) increase the annual level of compensation of any material change in any method of accounting or accounting practice executive officer of the Company or any of its Subsidiaries, except as required by changes (B) other than in GAAP;
the Ordinary Course of Business, grant any bonus, benefit or other direct or indirect compensation to any executive officer, (viC) make materially increase the coverage or benefits available under any material loans (or material advances create any new) severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or capital contributions other incentive compensation, insurance, pension or other employee benefit plan or arrangement made to, or investments in, any Person (other than the Company and its Subsidiaries)for, or forgive with any Indebtedness for borrowed money, except for advances to employees or of the executive officers of the Company or any of its Subsidiaries for expenses incurred in the Ordinary Course of Business;
or otherwise modify or amend or terminate any such plan or arrangement or (viiD) merge or consolidate with or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint ventureemployment, strategic alliancedeferred compensation, severance, consulting, non-competition or similar Contract;
agreement (viiior amend any such agreement) amend, waive, modify to which the Company or consent to the termination any of any Material Contract its Subsidiaries is a party or Insurance Policy, or amend, waive, modify or consent to the termination involving an executive officer of the Company’s Company or any of its Subsidiaries’ rights thereunder, or enter into any Contractexcept, in each case other than case, as required by applicable Law from time to time in effect or by the Ordinary Course terms of Businessany Company Benefit Plans;
(ixvi) make acquire in one or more transactions any capital expenditures material properties or commitments therefor that, individually or assets with a value greater than $5,000,000 in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(x) or sell, assign, license, transfer, leaseconvey, sublease, mortgage, pledge lease or otherwise encumber or dispose of in one or more transactions any of the material properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business;
(xi) amend, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Business;
(xii) enter into any Contract materially limiting in any way the ability of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other a value greater than the entry into teaming and exclusivity agreements $5,000,000 in the Ordinary Course of Businessaggregate;
(xiiivii) commence cancel or compromise any Proceeding, other than (A) in the Ordinary Course material debt or claim of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and or its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xivviii) declare, issuemake an election to be treated as a corporation for U.S. federal income tax purposes, make any other material Tax election, change its method of Tax accounting or pay settle any dividend claim for material Taxes;
(ix) enter into or agree to enter into any merger or consolidation with any corporation or other distribution of assets in respect entity, or acquire the securities of any Equity Interests other Person; or
(x) grant or permit any Liens (except Permitted Exceptions) on any assets of the Company or any of its Subsidiaries (Subsidiary other than pursuant to any refinancing or similar transaction with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company)existing Indebtedness;
(xvxi) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate materially amend or issue any debt securities waive, terminate or assume, guarantee or endorseextend, or otherwise become responsible forexercise any material option or give any material consent under, the obligations of any Person, except Real Property Lease other than in the Ordinary Course of Business or under the Company Credit Agreement; providedany Material Contract referred to in Sections 5.12(a)(i), that in no event shall the Company or any of its Subsidiaries(ii), (vi), (vii) and (viii) hereof, except as provided in Section 6.01(cfor the modification of the Contract described on Schedule 5.12(a)(vi)(a), make any optional repayment of any indebtedness for borrowed money;
(xvixii) incur or assume any indebtedness or make any loan to any Person, except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as for any of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals following made in the Ordinary Course of Business); (D) enter into any collective bargaining : drawdowns under existing financing arrangements, dealer loans or similar agreement; or (E) materially increasethe extension of credit evidenced by accounts receivable, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof purchase money security interests and set forth in Section 6.1(b)(xv) of the Disclosure Letteraccounts payable;
(xviixiii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts;
(xviii) make (except in the Ordinary Course of Business), change or revoke any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law;
(xix) settle or offer to settle GAAP, revalue in any pending or threatened Proceeding involving the Company or material respect any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct assets of the Company or any of its Subsidiaries and which does not include Subsidiary, including any material findings write-off of notes or admission or wrongdoing by the Company or any of its Subsidiariesaccounts receivable;
(xxxiv) accelerate the collection other than as required by GAAP, make any change in any method of accounts receivable accounting or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Businessaccounting practice;
(xxixv) abandon or permit the lapse of fail to pay when due any material Intellectual Property rights or obligation;
(xvi) enter into any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of BusinessMaterial Contract; or
(xxiixvii) resolve, commit, enter into any Contract, or otherwise become obligated, agree to do anything prohibited by this Section 6.01(b7.2(b).
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiaries.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 1 contract
Conduct of the Business Pending the Closing. (a) From the date hereof through until the earlier of the Closing or Date and the termination of this Agreement (the “Interim Period”)Agreement, except (iA) as set forth in Section 6.01 of the Disclosure Letteron Schedule 5.1, (iiB) as required by applicable Law, (iiiC) as expressly otherwise contemplated by this Agreement or the other Transaction Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures Documents or (vD) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and each Seller (1) shall cause its Subsidiaries tothe Acquired Companies to use their Best Efforts to conduct the Business, (A) conduct their business in all material respects, in the Ordinary Course of Business, in all material respects, and (B) use commercially reasonable efforts to (1) preserve substantially intact their business organization and assets in all material respects; (2) preserve their current relationships with customersshall not, suppliers, and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially the same condition as they exist as of the date of this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b).
(b) During the Interim Period, except (v) as set forth in Section 6.01 of the Disclosure Letter; (w) as required by applicable Law; (x) as expressly contemplated by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (z) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall not and shall cause its Subsidiaries not toeach Acquired Company to not:
(ia) transfer, grant, issue, sell, authorize, sell encumber or dispose of any Equity Interests equity interests of the any Acquired Company or any of its Subsidiaries or any grant options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, equity securities of or any stock appreciation, phantom stock or other similar right with respect toto any Acquired Company, provided that the Company foregoing restrictions shall not apply to any securities of a joint venture formed on or any of its Subsidiariesafter the date hereof;
(iib) effect any recapitalization, or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Equity Interests of the Company reclassification or any of its Subsidiaries, or make any other similar change in the capitalization of the Company or any of its SubsidiariesAcquired Company;
(iiic) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization dissolution or other reorganization with respect to the Company or any of its Subsidiaries, or effect any of the foregoingAcquired Company;
(ivd) except as required by applicable Law, amend the Organizational Documents of the any Acquired Company or any of its Subsidiaries (whether by merger, consolidation or otherwise);
(ve) make any material change in any method of accounting or accounting practice of the Company or any of its SubsidiariesAcquired Company, except as required by concurrent changes in GAAP, as agreed to by its independent public accountants, or as required by applicable Law;
(vif) make permit any material loans Acquired Company to acquire by merging or material advances or capital contributions toconsolidating with, or investments inpurchasing substantially all the assets of, any Person (other than the Company and its Subsidiaries), or forgive any Indebtedness for borrowed money, except for advances to employees or officers of the Company or any of its Subsidiaries for expenses incurred in the Ordinary Course of Business;
(vii) merge or consolidate with or acquire any corporation, partnership, limited liability company, association or other business organization or division thereof or any material amount thereof, provided that the foregoing restrictions shall not apply to the formation of assets, or enter into any a joint venture, strategic allianceor the transfer of assets to a joint venture (whether now or hereafter existing), or similar Contractwith any protégé firm for which an Acquired Company is a mentor under the Small Business Administration’s Mentor-Protégé program;
(viii) amend, waive, modify or consent to the termination of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Business;
(ix) make any capital expenditures or commitments therefor that, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(xg) sell, transfer, lease, sublease, mortgage, pledge or otherwise encumber or dispose of any of the material properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business;
(xi) amend, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single caseAcquired Companies, except in the Ordinary Course of BusinessBusiness or as described in the exception set forth in clause (f) above;
(xiih) enter into any Contract materially limiting in any way the ability of the Company or any of its Subsidiaries Acquired Companies to conduct business or compete with any Person in any particular geographic location or any line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business;
(xiiii) commence subject to Section 11.12, implement any Proceedingplant closing or layoff of employees of the Acquired Companies that would be reasonably expected to implicate the WARN Act (or any similar state, local or foreign Law) with respect to the Acquired Companies;
(j) make any loan or enter into any transaction with any of its officers, directors, partners or Affiliates other (i) than arms length transactions consistent with past practice, (ii) cash dividends or (iii) pursuant to Material Contracts listed on Schedule 3.13;
(k) terminate or modify in any material and adverse respect any Material Contract, or any government license, permit or other authorization, other than than, in each case, (Ai) in the Ordinary Course of Business; , (Bii) Proceedings seeking injunctive relief in order as required by applicable Law, or (iii) as required by the terms of any Contract to prevent or mitigate potential harm which an Acquired Company is a party (to the Company and its Subsidiaries; extent such Contract is set forth on the Disclosure Schedule or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive is entered into in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than accordance with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Companythis Agreement);
(xvl) incur enter into any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorsenew, or otherwise become responsible foramend any existing, Material Contracts (including, without limitation, any real property lease agreements, other than project or client-paid offices or permanent offices where the obligations of any Personannual base rent is less than $1,000,000, and collective bargaining agreements), except (i) any of the foregoing in the Ordinary Course of Business or under the Company Credit Agreement; provided, that and consistent in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed money;
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereofall material respects with past practice, (Aii) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) commitments relating to capital expenditures consistent with the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes budget provided to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries Buyer prior to the date hereof and hereof), (iii) as required by applicable Law, or (iv) as required by the terms of any Contract to which an Acquired Company is a party (to the extent such Contract is set forth in Section 6.1(b)(xv) of on the Disclosure LetterSchedule or is entered into in accordance with this Agreement);
(xviim) enter into establish or amend any Contract pension, retirement, profit sharing or transaction with Seller stock bonus plan or any Affiliate thereof, or any Related Party Multiemployer Plan covering the employees of the Company Acquired Companies;
(excluding n) increase the Company and its Subsidiaries)compensation, incentive arrangements or other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses benefits of any Affiliate officers or employees of Seller the Acquired Companies, except for annual increases made in the Ordinary Course of Business pursuant to the Affiliate Contractsconsistent with past practice;
(xviiio) make discharge or hire any Person as an officer of an Acquired Company or to serve in any executive capacity with the Acquired Companies, other than, in each case, (except i) in the Ordinary Course of Business)Business and on terms and conditions consistent in all material respects with past practice, change or revoke any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except ii) as required by applicable Law;
, or (xixiii) settle or offer as required by the terms of any Contract to settle any pending or threatened Proceeding involving the which an Acquired Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior is a party (to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations extent such Contract is set forth on the conduct of the Company Disclosure Schedule or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, is entered into in each case, in a manner not in the Ordinary Course of Business;
(xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of Businessaccordance with this Agreement); or
(xxiip) resolve, commit, enter into any Contract, or otherwise become obligated, Contract to do anything prohibited by this Section 6.01(b).
(c) Notwithstanding 5.1; provided, however, that, the foregoing provisions of this Section 6.01notwithstanding, Sellers and/or the Company and its Subsidiaries Acquired Companies may, at or prior to the Closing, use all or any portion of available cash or cash equivalents of to, prior to the Company and its Subsidiaries to Closing, (iA) repay any outstanding indebtedness under Indebtedness of the Company Credit Agreement; Acquired Companies or (iiB) declare and pay cash dividends with respect to the Equity Interests capital stock of the Company and its SubsidiariesAcquired Companies.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 1 contract
Conduct of the Business Pending the Closing. (a) From Prior to the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”)Closing, except (i) as set forth in Section 6.01 of the Disclosure Letteron Schedule 7.2(a), (ii) as required by applicable Law, (iii) as expressly otherwise contemplated by this Agreement in connection with, or in furtherance of, the other Transaction Documentsconsummation of the transactions contemplated hereby (including, without limitation, the amendment, replacement or termination of the Credit Facilities), or (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (v) with the prior written consent of Buyer Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, (A) each Company Subsidiary to conduct their business respective businesses in the Ordinary Course of Business. Without limiting the foregoing, in all material respectsfrom the date hereof until the earlier of the termination of this Agreement or the Closing Date, and (B) the Company shall use commercially reasonable efforts to, and shall take commercially reasonable efforts to cause its Subsidiaries to: (1) maintain and preserve substantially intact their the present business operations, organization and assets in all material respectsof the PEP Companies; and (2) preserve their current relationships with customers, suppliers, maintain insurance coverage in such amounts and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties of such kinds reasonably comparable to that in substantially the same condition as they exist as of effect on the date of this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b)hereof.
(b) During Prior to the Interim PeriodClosing, except (vi) as set forth in Section 6.01 of the Disclosure Letter; on Schedule 7.2(b), (wii) as required by applicable Law; , (xiii) as expressly otherwise contemplated by this Agreement in connection with, or in furtherance of, the other Transaction Documents; consummation of the transactions contemplated hereby (y) subject including, without limitation, the amendment, replacement or termination of the Credit Facilities and the PEP Companies’ efforts to Section 6.01(dreduce the amount of Closing Cash in anticipation of Closing), as a result of the COVID-19 Measures; or (ziv) with the prior written consent of Buyer Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall not not, and shall cause its Subsidiaries each Company Subsidiary not to:
(iA) transfer, grant, issue, sell, authorize, encumber sell or dispose of or otherwise subject to any Equity Interests Lien (other than Permitted Liens) any shares of the capital stock or other securities of any PEP Company or any of its Subsidiaries or any grant options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom shares of the capital stock or other similar right with respect to, the Company or securities of any of its SubsidiariesPEP Company;
(iiB) effect any recapitalization, reclassification or otherwise reclassify, combine, split, subdivide like change in the capitalization of any PEP Company;
(C) amend the certificate of incorporation or redeem, by-laws or purchase or otherwise acquire, directly or indirectly, similar governance documents of any PEP Company;
(D) knowingly subject any of the Equity Interests Real Property or assets (whether tangible or intangible) of any PEP Company to any Lien, except for Permitted Liens and Liens that will be released at or in connection with the Closing (including those related to Company Indebtedness);
(E) other than in the Ordinary Course of Business, and except with respect to matters addressed in subsection (G) below, acquire any material properties or assets or sell, assign, license, transfer, convey, lease or otherwise dispose of any of the Real Property or assets of any PEP Company (except for the purpose of disposing of obsolete or worthless assets or to the extent such assets are replaced with like assets of equivalent value);
(F) other than in the Ordinary Course of Business, cancel or compromise any material debt or claim or waive or release any material right of its Subsidiariesany PEP Company;
(G) enter into any commitment for capital expenditures of any PEP Company in excess of $500,000 for any individual project or $1,000,000 in the aggregate, other than (i) as contemplated by the PEP Companies’ current budget, as provided to Purchaser on April 30, 2015 or (ii) related to Material Contracts with customers;
(H) other than in the Ordinary Course of Business, enter into, modify or terminate any labor or collective bargaining agreement of any PEP Company or, through negotiations or otherwise, make any commitment or incur any liability to any labor organizations;
(I) declare, set aside, make, or pay any dividend or other distribution, payable in cash, stock, property, or otherwise, or make any other similar change in payment on or with respect to any of its capital stock, except for (A) dividends by any PEP Company to the capitalization Company and (B) any cash dividend or other cash distribution to the stockholders of the Company or any of its Subsidiariesprior to the Closing Date;
(iiiJ) acquire any corporation, partnership, limited liability company, or other business organization or any material amount of assets, or enter into any joint venture, strategic alliance, exclusive dealing, noncompetition or similar contract or arrangement;
(K) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company or any of its Subsidiaries, or effect any of the foregoing;
(iv) amend the Organizational Documents of the Company or any PEP Company;
(L) incur any indebtedness for borrowed money or issue any debt securities or enter into a guarantee with respect to the indebtedness any Person, or make any loans (other than (v) Company Indebtedness that will be paid off on or prior to Closing, (w) Ordinary Course of its Subsidiaries Business borrowings under any Company Indebtedness, (whether by mergerx) performance bonds, consolidation surety bonds, letters of credit or otherwisesimilar instruments entered into in the Ordinary Course of Business, (y) intercompany indebtedness between the PEP Companies, and (z) advances for travel and other normal business expenses to officers and employees of the PEP Companies in the Ordinary Course of Business);
(vM) make any material change increase in any method manner the rate or terms of accounting compensation payable or accounting practice of to become payable or the benefits (including equity or equity based grants) provided to, grant any severance or termination pay to, establish, adopt, enter into, or amend any indemnification arrangement with, or pay any bonus to its directors, officers or employees, or establish, adopt, enter into or amend any Company or Benefit Plan, other than as may be required by any of its SubsidiariesGovernmental Body, except as required by changes in GAAP;
the terms of any Company Benefit Plan (vi) make including the SERP), to comply with any material loans or material advances or capital contributions toapplicable Laws, Company Transaction Expenses to be paid at Closing, or investments in, any Person (other than the Company and its Subsidiaries), or forgive any Indebtedness for borrowed money, except for advances to employees or officers of the Company or any of its Subsidiaries for expenses incurred in the Ordinary Course of Business;
(vii) merge or consolidate with or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint venture, strategic alliance, or similar Contract;
(viiiN) amend, waive, cancel or modify or consent to the termination of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than except for amendments, cancellations and renewals in the Ordinary Course of Business;
(ix) make any capital expenditures or commitments therefor that, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(x) sell, transfer, lease, sublease, mortgage, pledge or otherwise encumber or dispose of any of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business;
(xi) amend, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving agreement that would constitute a term of more than one year or rental obligation exceeding $200,000 per year in any single caseMaterial Contract, except in the Ordinary Course of Business;
(xiiO) enter into any Contract materially limiting in any way the ability of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business;
(xiii) commence any Proceeding, other than (A) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company);
(xv) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed money;
(xvi) except as otherwise required by this Agreement, applicable Law, change an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter;
(xvii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts;
(xviii) make (except in the Ordinary Course of Business), change or revoke any material Tax electionaccounting period, change any material accounting period method, make, change or rescind any material accounting method for tax election, which election, change, or rescission is required to be attached in writing to any Tax purposesReturn or otherwise separately filed with any Taxing Authority, file any material amended Tax Return, enter into any closing agreementagreement related to Taxes, settlement, or compromise of settle any material Tax claim Claim or assessmentassessment relating to the PEP Companies, or consent surrender any right to any extension or waiver claim a refund of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by LawTaxes;
(xixP) settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business;
(xxi) abandon or permit the lapse of any right relating to any material Company Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of BusinessProperty; or
(xxiiQ) resolvepermit the Assumed Indebtedness (other than Net Tax Liabilities), commitincluding those items set forth on Schedule 7.2(Q), enter into any Contract, or otherwise become obligated, to exceed $5,000,000;
(R) agree to do anything prohibited by this Section 6.01(b)7.2.
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiaries.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 1 contract
Sources: Stock Purchase Agreement (Nn Inc)
Conduct of the Business Pending the Closing. (a) From Prior to the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”)Closing, except (iw) as set forth in Section 6.01 of the Disclosure Letteron Schedule 6.2(a), (iix) as required by applicable Law, (iiiy) as expressly otherwise specifically contemplated by this Agreement Agreement, any of the Seller Documents or the other Transaction Company Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (vz) with the prior written consent of Buyer (which provided, that Buyer shall respond (i.e., consent shall not be unreasonably withheld, delayed or conditionedwithhold its consent) as soon as reasonably practicable but in no event later than five (5) Business Days of any receipt of any written request therefor delivered to Buyer in accordance with Section 8.9), the Company shall, and shall cause its Subsidiaries to, :
(Ai) conduct their business the respective businesses of the Company and the Subsidiaries in the Ordinary Course of Business, including making capital expenditures in all material respectsamounts and in a timely manner consistent with past practices;
(ii) use its commercially reasonable efforts to (A) preserve the present business operations, organization and goodwill of the Company and its Subsidiaries, and (B) use commercially reasonable efforts to (1) preserve substantially intact their business organization and assets in all material respects; (2) preserve their current the present relationships with customers, suppliers, the customers and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially the same condition as they exist as suppliers of the date Company and its Subsidiaries; and
(iii) in the event that, to the Knowledge of this Agreementthe Company, ordinary wear the Company or its Subsidiaries is or becomes in violation of any anti-corruption or anti-money laundering Laws, or any European Union and tear excepted; providedU.S. export control Laws or custom Laws, that no action in each case, applicable by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) Subsidiaries, the Company shall be deemed promptly cause such violation to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b)remedied.
(b) During the Interim Period, except Other than (v) as set forth in Section 6.01 of the Disclosure Letter; on Schedule 6.2(b), (w) as required by applicable Law; , (x) as expressly otherwise specifically contemplated by this Agreement Agreement, any of the Seller Documents or the other Transaction Company Documents; , (y) subject to Section 6.01(d)in the Ordinary Course of Business, as a result of the COVID-19 Measures; or (z) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed, in the case of Section 6.2(b)(vi)) (provided, that Buyer shall respond (i.e., consent or withhold its consent) as soon as reasonably practicable but in no event later than five (5) Business Days of any receipt of any written request therefor delivered to Buyer in accordance with Section 8.9), the Company shall not not, and shall cause not permit its Subsidiaries not to:
(i) transfer, grant, issue, sell, authorizepurchase, encumber redeem, retire or dispose of grant any Equity Interests equity interests of the Company or any of its Subsidiaries or grant any options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom stock or other similar right with respect to, equity interests of the Company or any of its Subsidiaries;
(ii) effect any recapitalization, or otherwise reclassify, combine, split, subdivide or redeemamend the terms of any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of, or purchase in substitution for, shares of its capital stock;
(iii) amend in any material respect the certificate of incorporation, bylaws or otherwise acquire, directly or indirectly, any of the Equity Interests comparable organizational documents of the Company or any of its Subsidiaries, Subsidiaries or make amend in any material respect or enter into (other similar change in the capitalization than with respect to new hires permitted hereunder) any indemnification agreement or arrangement with any present or former director or officer of the Company or any of its Subsidiaries;
(iiiiv) adopt a plan except as specifically required under applicable Law or the terms of complete any existing CBA or partial liquidationCompany Benefit Plan in effect on the date of this Agreement, dissolutionmaterially increase the amount of any bonus, merger, consolidation, restructuring, recapitalization salary or other reorganization compensation to any officer or director, grant any unusual or extraordinary bonus, benefit or other direct or indirect compensation to any employee, independent contractor or director, or enter into any employment, deferred compensation, severance, consulting, non-competition, indemnification or similar agreement (or amend any such agreement) with respect to any member of the Global Lead Team or any director-level employee; provided, however, that for the avoidance of doubt, the Company or any of its Subsidiaries, or effect any of the foregoing;
(iv) amend the Organizational Documents of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise);
(v) shall be able to make any material change in any method of accounting or accounting practice of the Company or any of its Subsidiaries, except as required by changes in GAAP;
(vi) make any material loans or material advances or capital contributions to, or investments in, any Person (other than the Company annual bonus payments and its Subsidiaries), or forgive any Indebtedness for borrowed money, except for advances to employees or officers of the Company or any of its Subsidiaries for expenses incurred annual salary increases in the Ordinary Course of Business;
(v) (x) adopt or create any new Company Benefit Plan or increase the coverage, payments to or benefits under any existing Company Benefit Plan, except as specifically required under applicable Law or the terms of any existing CBA or Company Benefit Plan in effect on the date of this Agreement; or (y) terminate the employment of any salaried employee exercising management responsibilities for the Company or any of its Subsidiaries having annual salary in excess of $200,000 (except if for cause);
(vi) adopt, enter into or materially modify or amend any CBA;
(vii) merge or consolidate with or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint venture, strategic alliance, commitment for capital expenditures of the Company or similar Contractany of its Subsidiaries that will not be complete prior to the Closing in excess of the aggregate amount set forth in the budget of the Company and its Subsidiaries for such portion of the applicable fiscal year;
(viii) amendwithout duplication of subsection (vii), waiveacquire any material properties (by lease, modify purchase or consent to the termination of any Material Contract otherwise) or Insurance Policyassets or sell, or amendassign, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Business;
(ix) make any capital expenditures or commitments therefor that, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(x) selllicense, transfer, leaseconvey, sublease, mortgage, pledge lease or otherwise encumber or dispose of any of the material properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not Subsidiaries with a value in excess of $1,000,0001,000,000 individually, individually or $5,000,000 in the aggregate; provided, however, that the Company may sell, transfer and for sales convey the UK Land in an “as is, where is” transaction in which the Company has no future obligations or transfers of inventory in liabilities relating to the Ordinary Course of BusinessUK Land;
(xiix) amend, extend, renew, terminate change its present accounting methods or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year principles in any single casematerial respect, except in the Ordinary Course of Businessas required by GAAP;
(xiix) enter into any Contract materially limiting in any way the ability of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business;
(xiii) commence any Proceeding, other than (A) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company);
(xv) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed money;
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereofitems listed on Schedule 4.8, (Av) materially increase any severance or termination pay or grant any retention bonus make, revoke or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter;
(xvii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts;
(xviii) make (except in the Ordinary Course of Business), change or revoke any material Tax election, (w) settle or compromise any Tax claim or Liability, (x) change any material method of accounting or annual accounting period or material accounting method for Tax purposes, (y) file or surrender any material amended Tax Return, enter into any closing agreement, settlement, claim for a refund of an amount of Taxes or compromise (z) waive or extend the statute of limitations in respect of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business);
(xi) incur any Indebtedness in excess of $5,000,000; provided, in each casethat, for the avoidance of doubt, borrowings under the Credit Facilities shall not require the consent of Buyer;
(xii) create or permit the creation of any Lien, except Permitted Exceptions or such other Liens as required may arise in the Ordinary Course of Business or by operation of applicable Law;
(xixxiii) permit the Company to settle or offer to settle compromise any pending or threatened Legal Proceeding involving or claim or pay, discharge or satisfy or agree to pay, discharge or satisfy any Liability in connection with any pending or threatened Legal Proceeding that would be a Liability of the Company or any of its Subsidiariesafter the Closing, other than any settlement solely for monetary relief to be paid in full the settlement, compromise, payment, discharge or satisfaction of Legal Proceedings and Liabilities (A) covered by existing insurance policies or indemnities, (B) involving no consideration other than (i) the payment of cash prior to Closing, or (ii) the payment of cash following Closing of in an amount not more than to exceed $1,000,000 individually 200,000;
(xiv) cancel any material debts owed to, or waive any material claims or rights of, the Company and that does not involve any equitable relief its Subsidiaries;
(xv) permit the Company’s insurance policies listed on Schedule 4.20 or limitations on comparable insurance coverage applicable to the conduct of Company to lapse;
(xvi) permit the Company or any of its Subsidiaries and which does not include to enter into or agree to enter into any material findings merger or admission consolidation with any corporation or wrongdoing by other entity, or acquire the securities of any other Person, except, in each case for transactions between the Company or and/or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business;
(xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of Business; or
(xxiixvii) resolve, commit, enter into any Contractterminate, or otherwise become obligatedmaterially modify or amend, to do anything prohibited by this Section 6.01(b)any Company Contract.
(c) Notwithstanding anything contained in this Agreement to the foregoing provisions of this Section 6.01contrary, the Company and its Subsidiaries mayshall be permitted to maintain through the Closing Date the cash management systems of the Company and its Subsidiaries, maintain the cash management procedures as currently conducted by the Company and its Subsidiaries, and periodically settle intercompany balances consistent with past practices (including through dividends and capital contributions and all such intercompany balances shall be settled at or prior the Closing in accordance with their terms). The Company and its Subsidiaries are allowed to the Closing, use dividend all or any portion of cash or cash equivalents Cash and Cash Equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect Seller immediately prior to the Equity Interests of the Company and its SubsidiariesAdjustment Time.
(d) If Seller or Between the Company determines to take any action or refrain from taking any action in accordance date hereof and the Closing Date, all Tax Returns shall be prepared and all Taxes shall be paid consistent with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doingpast practices and on a timely basis, to the extent reasonably practicable and permitted by such past practices comply with applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 1 contract
Sources: Stock Purchase Agreement (Kraton Performance Polymers, Inc.)
Conduct of the Business Pending the Closing. (a) From Prior to the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”)Closing, except (i1) as set forth in Section 6.01 of the Disclosure Letter, on Schedule 8.2(a); (ii2) as required by applicable Law, Law or by Order of the Bankruptcy Court; (iii3) as otherwise expressly contemplated by this Agreement or the other Transaction Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures Agreement; or (v4) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned)Purchaser Representative, the Company shall, and shall cause each of its Subsidiaries to, :
(Ai) conduct their business the Business only in the Ordinary Course of Business; provided, however, that the Company may not take any of the actions set forth in Section 8.2(b) without the prior written consent of Purchaser Representative or as required by applicable Law or by Order of the Bankruptcy Court, regardless of whether such action is in the Ordinary Course of Business, except as set forth on Schedule 8.2(b);
(ii) observe and comply in all material respectsrespects with all requirements under applicable Laws, including the Exchange Act and continue to satisfy all reporting obligations under the Exchange Act; and
(iii) use its commercially reasonable efforts to preserve the present (A) business operations, organization and goodwill of the Business, and (B) use commercially reasonable efforts to relationships with employees, customers and suppliers of the Company and its Subsidiaries.
(b) Except (1) preserve substantially intact their business organization and assets as set forth on Schedule 8.2(b)(1) (solely with respect to the column labeled “Already Committed/Approved to Spend”), Schedule 8.2(b)(2) or Schedule 8.2(b)(3) (solely in all material respectsthe Ordinary Course of Business and, to the extent an amount is set forth on any applicable portion of such Schedule with respect to any item, up to such amount); (2) preserve their current relationships with customers, suppliers, and other persons with which they have significant business relations; and as required by applicable Law (3) keep and maintain their assets and properties in substantially the same condition as they exist as of the date of this Agreement, ordinary wear and tear excepted; provided, that no action by any Law or Order of the Bankruptcy Court that permits but does not require the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) make a payment shall not be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(brequired to be paid).
; (b) During the Interim Period, except (v3) as set forth in Section 6.01 of the Disclosure Letter; (w) as required by applicable Law; (x) as otherwise expressly contemplated by this Agreement or the (other Transaction Documents; (y) subject to than in Section 6.01(d8.2(a), as a result of the COVID-19 Measures); or (z4) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned)Purchaser Representative, the Company shall not not, and shall cause not permit its Subsidiaries not to:
(i1) transfermake any individual payment or expenditure or series of related payments or expenditures, grantincluding pursuant to a Contract pursuant to which the total amount required to be paid by the Company or one or more of its Subsidiaries on one or more dates, issueor incur any Liability or Indebtedness under any existing Contract of the Company or any of its Subsidiaries in an amount in excess of One Hundred Thousand Dollars ($100,000), sellprovided that the Company shall not be permitted to make any payment even if less than the amount set forth above if such payment is of the type that is set forth on Schedule 8.2(b)(1)(capital expenditure schedule) or 8.2(b)(2)(employee hires) (other than payment of normal salary on the regularly scheduled payroll dates in the Ordinary Course of Business) or (2) make any new agreement or enter into any new Contract requiring any payment or expenditure or incur any Liability or Indebtedness on behalf of the Company or any of its Subsidiaries in an amount in excess of Twenty-Five Thousand Dollars ($25,000), authorize, encumber provided that the Company shall not enter into any new Contract with respect to a capital expenditure or dispose hiring of any Equity Interests employee regardless of the amount of such Contract or agreement;
(ii) (A) increase the annual level of compensation of any Employee, (B) grant any unusual or extraordinary additional compensation to any Employee, (C) increase the coverage or benefits available under any Employee Benefit Plan, (D) enter into any employment, deferred compensation, severance or similar agreement (or amend any such agreement) to which the Company or any of its Subsidiaries is a party with an Employee of the Company or any of its Subsidiaries whether express or implied; (E) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Employee Benefit Plan, to the extent not already provided in any such Employee Benefit Plan, (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Employee Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries or (H) hire any optionsnew Employee;
(iii) acquire any material properties or assets or sell, warrantsassign, convertible securities calls or other rights to purchase license, transfer, convey, lease or otherwise acquire Equity Interests of, dispose of any material assets (except pursuant to an existing Contract in the Ordinary Course of Business);
(iv) cancel or compromise any stock appreciation, phantom stock material debt or other similar claim or waive or release any material right with respect to, of the Company or any of its Subsidiaries;
(iiv) effect enter into, modify or terminate any recapitalizationlabor or collective bargaining agreement;
(vi) repurchase, or otherwise reclassify, combine, split, subdivide or redeem, or purchase redeem or otherwise acquire, directly or indirectlygrant any rights or enter into any Contracts or commitments to repurchase, redeem or acquire, any outstanding shares of capital stock or other securities of, or other ownership interests in, the Company or any of its Subsidiaries, or declare, set aside, make or pay any dividend or other distribution with respect to its capital stock or other securities or ownership interests;
(vii) issue or sell any shares of capital stock or other securities of the Equity Interests Company or any of its Subsidiaries or grant options, warrants, calls or other rights to purchase shares of capital stock or other securities of the Company or any of its Subsidiaries, except as expressly contemplated herein or make in the Plan;
(viii) amend the certificate of incorporation or bylaws or comparable organizational document of the Company or any other similar of its Subsidiaries, except as expressly contemplated herein or in the Plan;
(ix) effect any recapitalization, reclassification or like change in the capitalization of the Company or any of its Subsidiaries;
(iiix) adopt a plan of complete enter into or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization agree to enter into any merger or consolidation with any corporation or other reorganization with respect to entity or invest in, make a loan, advance other than in the Company Ordinary Course of Business or any of its Subsidiariescapital contribution to, or effect otherwise acquire the securities of any of the foregoingother Person;
(ivxi) amend fail to use commercially reasonable efforts to maintain present insurance policies or other comparable insurance benefiting the Organizational Documents assets of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise)and the conduct of their respective Businesses;
(vxii) (A) make, change or rescind any material election relating to Taxes, (B) settle or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, (C) make any material change in any method of accounting or accounting practice of the Company or to any of its Subsidiariesmethods of accounting for Tax purposes from those employed in the preparation of its most recent Tax Returns, except as required by changes in GAAP;
(viD) make enter into any material loans agreement to share or material advances or capital contributions to, or investments in, pay any Taxes of another Person (other than the Company and its Subsidiaries)to customers, clients, or forgive any Indebtedness for borrowed money, except for advances to employees or officers of the Company or any of its Subsidiaries for expenses incurred vendors in the Ordinary Course of Business), or (E) agree to an extension or waiver of the statute of limitations applicable to the assessment or collection of any material Taxes (other than pursuant to an extension of time to file a Tax return obtained in the Ordinary Course of Business);
(viixiii) merge create, incur or consolidate with or acquire subject any corporationof its assets to any Lien, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint venture, strategic alliance, or similar Contractexcept for Permitted Exceptions;
(viiixiv) except as set forth on Schedule 8.2(b)(xiv), enter into, amend, supplement, waive, modify modify, terminate, or consent to the termination of cancel (A) any Material Contract or Insurance Policyin any material respect, or amend, waive, modify or consent to the termination of the Company’s or (B) any of its Subsidiaries’ rights thereunder, or enter into any Contract that is not a Material Contract, in each case other than in the Ordinary Course of Business;
(ix) make any capital expenditures or commitments therefor that, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(x) sell, transfer, lease, sublease, mortgage, pledge or otherwise encumber or dispose of any of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business;
(xi) amend, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Business;
(xii) enter into any Contract materially limiting in any way the ability of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business;
(xiii) commence any Proceeding, other than (A) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company);
(xv) incur designate any Indebtedness executory contract or unexpired lease for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed moneyrejection;
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase make any severance or termination pay or grant any retention bonus or material change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or of its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) methods of the Disclosure Letteraccounting;
(xvii) enter into permit any Contract material Intellectual Property that is subject to a registration or transaction with Seller an application for registration (unless the Company has made a reasonable determination that such Intellectual Property has no value or any Affiliate thereofhas nominal value) to lapse, be abandoned or canceled, expire or terminate, or fail to make any Related Party payments with respect thereto when due; provided, however, that neither the expiration of a patent on its scheduled expiration date nor the abandonment of an application for registration of a trademark in connection with a third party opposition proceeding, which the applicant, in its reasonable business judgment, has determined it would be unlikely to prevail, shall be deemed a breach of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contractsforegoing;
(xviii) make (except in the Ordinary Course of Business)enter into, change create, incur or revoke assume any material Tax electionobligations, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of in any material Tax claim or assessment, or consent to case with any extension or waiver Affiliates of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law;Company; or
(xix) settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business;
(xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of Business; or
(xxii) resolve, commit, enter into any Contract, arrangement or otherwise become obligatedunderstanding, or agree, in writing or otherwise, to do anything prohibited by take any of the actions described in this Section 6.01(b).
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all 8.2 or any portion action that would make any of cash the representations or cash equivalents warranties of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiaries.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly untrue or indirectly, the right to control incorrect in any material respect or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, prevent the Company and its Subsidiaries shall exercise, consistent with from performing or cause the terms and conditions of this Agreement, complete control and supervision over Company not to perform their respective businesses and operationscovenants hereunder or under the Transaction documents to which it is a party.
Appears in 1 contract
Conduct of the Business Pending the Closing. (a) From the date hereof through the earlier of Prior to the Closing or the earlier termination of this Agreement (the “Interim Period”)Agreement, except (i) as set forth in Section 6.01 of the Disclosure Letter, (ii) as required by applicable Law, (iiiii) as otherwise expressly contemplated provided by this Agreement or the other Transaction Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (viii) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries the Company Group to, (A) use commercially reasonable efforts to conduct their the business of the Company Group only in the Ordinary Course of Business; provided that actions or inactions that a reasonably prudent operator of a business in similar circumstance in the industries in which the Company Group operates would take or omit to take in response to the occurrence of any Public Emergency shall, in all material respectseach case, and (B) use commercially reasonable efforts be considered to (1) preserve substantially intact their business organization and assets have been taken in all material respects; (2) preserve their current relationships with customers, suppliers, and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially the same condition as they exist as Ordinary Course of the date of this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach Business for purposes of this Section 6.01(a) unless 7.2 (subject to, in the case of this proviso, reasonable notice to and consultation with Buyer in advance of taking such action would constitute a breach of Section 6.01(bactions or refraining from taking such actions to the extent reasonably practicable).
(b) During Prior to the Interim PeriodClosing or earlier termination of this Agreement, except (v) as set forth in Section 6.01 of the Disclosure Letter; (wi) as required by applicable Law; , (xii) as otherwise expressly contemplated provided by this Agreement or the other Transaction Documents; Agreement, (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (ziii) with the prior written consent of Buyer (which consent consent, other than in respect of clause (v) below, shall not be unreasonably withheld, delayed or conditioned)) or (iv) as set forth in Schedule 7.2(b) of the Company Disclosure Schedules, the Company shall not and shall cause its Subsidiaries the Company Group not to:
(i) transfermortgage, grantpledge or subject to any Lien any material assets, issue, sell, authorize, encumber or dispose of any Equity Interests of the Company or any of its Subsidiaries or any options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom stock or other similar right with respect to, the Company or any of its Subsidiariesexcept Permitted Liens;
(ii) effect incur or guarantee any recapitalization, or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any Debt of the Equity Interests type set forth in (1) clause (a) of the definition thereof, other than borrowings under any existing revolving credit facility in the Ordinary Course of Business, (2) clause (b) of the definition thereof, (3) clause (c) of the definition thereof, other than capital or finance leases in the Ordinary Course of Business and substantially consistent with the capital expenditure plan set forth in Schedule 7.2(b)(xiv) of the Company or any of its SubsidiariesDisclosure Schedules, or make any other similar change in the capitalization (4) clause (f) of the Company or any of its Subsidiariesdefinition thereof;
(iii) sell, assign or transfer any material assets, other than sales or transfers of aged or obsolete equipment in the Ordinary Course of Business (it being understood that transfers of Intellectual Property are addressed in clause (iv) below);
(iv) sell, license, abandon or otherwise dispose of any material Intellectual Property, other than (A) non-exclusive licenses granted to customers, suppliers and other partners in the Ordinary Course of Business or (B) with respect to abandonments, cancellations or lapses of immaterial or obsolete Intellectual Property in the Ordinary Course of Business;
(v) acquire any Person, or acquire any material assets constituting an operating business or line of business;
(vi) amend its Organizational Documents;
(vii) (A) issue, sell, pledge or transfer any of its equity securities or warrants, options or other rights to acquire its equity securities, (B) purchase, redeem, cancel or otherwise acquire any of its equity securities or (C) split, combine, consolidate, subdivide, reduce, reclassify or redesignate any of its equity securities;
(viii) declare, pay or set aside dividends or distributions (other than (A) cash dividends or cash distributions made prior to the Measurement Time, in each case that do not materially impair the operation of the business of the Company Group in the Ordinary Course of Business or (B) dividends or distributions solely among members of the Company Group made in the Ordinary Course of Business);
(ix) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, reclassification, recapitalization or other reorganization with reorganization;
(x) (A) amend or modify any Material Contract in a manner that is adverse in any material respect to the Company Group, (B) voluntarily terminate any Material Contract or permit any of its Subsidiaries, or effect any Material Contract to expire (except automatic expirations that occur by the operation of the foregoing;
terms of any such Material Contract or terminations or expirations that are not adverse in any material respect to the Company Group) or (ivC) amend the Organizational Documents enter into or renew any Material Contract, except (1) entry into or renewal of any Material Contract of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise);
(v) make any material change type described in any method of accounting or accounting practice of the Company or any of its Subsidiaries, except as required by changes in GAAP;
(vi) make any material loans or material advances or capital contributions to, or investments in, any Person (other than the Company and its SubsidiariesSection 5.13(a)(i), Section 5.13(a)(ii), Section 5.13(a)(iii), Section 5.13(a)(xv) or forgive any Indebtedness for borrowed money, except for advances to employees or officers of the Company or any of its Subsidiaries for expenses incurred Section5.13(a)(xxiv) in the Ordinary Course of Business;
Business and (vii2) merge or consolidate with or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint venture, strategic alliance, or similar Contract;
(viii) amend, waive, modify or consent to the termination renewal of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than Real Property Lease in the Ordinary Course of Business;
Business and on arm’s-length terms, in each case of clauses (ix1) make and (2), so long as such Material Contract is not referenced in any capital expenditures or commitments therefor that, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(x) sell, transfer, lease, sublease, mortgage, pledge or otherwise encumber or dispose other sub-section of any of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of BusinessSection 5.13(a);
(xi) amendmake any capital investment in, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving loan or advance (other than advances for reimbursable Ordinary Course of Business expenses or advances of expenses to directors and employees pursuant to the Organizational Documents of a term member of more Company Group or existing indemnification agreements) to, any other Person (other than one year or rental obligation exceeding $200,000 per year in any single case, except in member of the Company Group) outside the Ordinary Course of Business;
(xii) enter into any Contract materially limiting in any way the ability of the Company or transaction with any of its Subsidiaries to conduct business directors or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in executive officers outside the Ordinary Course of BusinessBusiness except as otherwise permitted by Section 7.2(b)(xiii);
(xiii) commence except as required by the terms of any Proceedingexisting Collective Bargaining Agreement or Company Benefit Plan as in effect on the date of this Agreement or amended in compliance with this Agreement (or any plan, policy, agreement, Contract, program, practice or arrangement that would be considered a Company Benefit Plan or Collective Bargaining Agreement if it were in existence on the date of this Agreement that is established in compliance with this Agreement), (A) grant any loan to, increase the compensation or benefits of, or grant or pay any bonus, cash incentive, profit-sharing, equity or equity based award (including synthetic equity) or similar payment to any Company Service Provider; (B) grant or pay (or otherwise increase) any severance, change in control, retention, termination or similar compensation or benefits to any Company Service Provider; (C) amend, adopt, establish, agree to establish, enter into or terminate any material Company Benefit Plan (or any plan, policy, agreement, Contract, program, practice or arrangement that would be considered a material Company Benefit Plan if it were in existence on the date of this Agreement), other than (A1) in the Ordinary Course immaterial amendments that do not materially increase liabilities under such Company Benefit Plan and (2) renewals of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings Benefit Plans that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company);
(xv) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except health and welfare benefit plans in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment do not increase costs of any indebtedness for borrowed money;
(xvi) except as otherwise required such plan by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other more than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business)15%; (D) enter into take any collective bargaining action to accelerate the vesting, funding or similar agreementpayment of any compensation or benefit under any Company Benefit Plan or Collective Bargaining Agreement; or (E) materially increasehire, promote or announce or promise a material increase in, the compensation or benefits payable to terminate any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter;
(xvii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party employee of the Company Group (excluding the Company and its Subsidiariesother than a termination for cause), other than (A) any transactions contemplated by except for the Material Contracts (provided that such Contracts have been made available to Buyer); hiring, promotion or (B) the reimbursement termination of expenses of any Affiliate of Seller employees in the Ordinary Course of Business (including to fill vacancies) where such action does not relate to an employee whose annual base salary is (or would be) $250,000 or above; (F) engage or terminate any individual independent contractor, other than (1) the engagement of an individual independent contractor on an at-will basis or pursuant to an independent contractor agreement that is terminable at will or upon no more than 30 days’ notice with no liability (other than any liability for compensation or fees owed for services rendered prior to the Affiliate Contractsdate of such termination), (2) the termination of an individual independent contractor for cause or due to a material breach under the applicable independent contractor agreement or (3) where such action does not relate to individual independent contractors whose annual fees are (or would be) $250,000 or above individually; (G) implement any “plant closing,” “mass layoff” or similar action that triggers notice obligations under the WARN Act; (H) take any action that could result in a complete withdrawal (as defined in Section 4203 of ERISA) or partial withdrawal (as defined in Section 4205 of ERISA) by the Company Group or any of its ERISA Affiliates from any Multiemployer Plan; or (I) enter into, amend or terminate any Collective Bargaining Agreement (or any Contract that would be considered a Collective Bargaining Agreement if it were in existence on the date of this Agreement) or otherwise recognize or certify a Union as the bargaining representative for any employees of the Company Group; provided that the Company Group may renegotiate any Collective Bargaining Agreement in effect on the date of this Agreement that is scheduled to expire in accordance with its terms within the three-month period following the date of this Agreement in the Ordinary Course of Business on terms substantially identical to such Collective Bargaining Agreement (provided that any increases in compensation and benefits for employee subject to such Collective Bargaining Agreement do not exceed a maximum cumulative total of 3% per annum);
(xiv) make any capital expenditures (or incur any obligations or liabilities in respect thereof) (A) in 2025 in excess of 120% of the applicable line item of the capital expenditure plan set forth in Schedule 7.2(b)(xiv) of the Company Disclosure Schedules or (B) in 2026 in excess of 1.5% of forecasted 2026 revenues plus capital expenditures set forth in such plan not expended in 2025;
(xv) form any subsidiary or enter into any joint venture, partnership, limited liability corporation or similar arrangement;
(xvi) enter into any new line of business or abandon or discontinue an existing line of business;
(xvii) change any of its cash management or accounting practices or methods, except as may be required in order to comply with changes in GAAP or applicable Law;
(xviii) make (except in the Ordinary Course of Business)A) make, change or revoke any material Tax election, election with respect to Taxes; (B) adopt or change (or request any Governmental Body to change) any material aspect of any method of accounting period or material accounting method for Tax purposes; (C) enter into any “closing agreement” as described in Section 7121 of the Code (or any similar provision of state, local or non-U.S. Law) with any Governmental Body; (D) settle, compromise or surrender any material Tax claim, audit or assessment for an amount in excess of reserves therefor on the financial statements of the Company and the Company Subsidiaries; (E) file any material amended Tax Return, enter into ; (F) affirmatively surrender any closing agreement, settlement, or compromise of any right to claim a material Tax claim refund; or assessment, or (G) consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained assessment; in the Ordinary Course case of Businessclauses (A) and (B), in each case, except as required by Lawa change in applicable Law or as updated or modified to take into account changes in applicable Law pursuant to the OBBBA;
(xix) settle acquire any ownership interest in any real property, or offer to settle sell or dispose of any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its SubsidiariesOwned Real Property;
(xx) accelerate the collection settle, compromise, withdraw from or initiate any Legal Proceeding (A) for an amount in excess of accounts receivable $1,000,000 individually, or delay the payment of accounts payable, in each case, in a manner not $5,000,000 in the Ordinary Course aggregate, or (B) involving the imposition on any member of Businessthe Company Group of any non-monetary relief or the making by any member of the Company Group of any admissions of liability or responsibility;
(xxi) abandon except as set forth in Schedule 7.2(b)(xxi) (and in each such case, on arm’s length terms), assign, sublease, transfer or permit otherwise grant another Person the lapse right to occupy any Material Real Property Lease other than any Dark Lease; or
(xxii) otherwise agree or enter into an agreement or otherwise commit to do any of the foregoing.
(c) Notwithstanding anything to the contrary contained herein, during the period from the date hereof until the Closing, each member of the Company Group shall be permitted to utilize any material Intellectual Property rights and all available Cash, in each case in such amounts as the applicable member of the Company Group shall deem necessary, appropriate or desirable in its sole discretion, to (A) at any time pay Company Transaction Expenses; (B) at any time repay outstanding Debt; and (C) declare, pay or set aside cash dividends or other material intangible asset used cash distributions to Seller, in the case of clauses (A), (B) and (C), so long as such amounts are paid prior to the Measurement Time, are not included in Closing Cash and do not materially impair the operation of the business of the Company or of its Subsidiaries except Group in the Ordinary Course of Business; or
(xxii) resolve, commit, enter into any Contract, or otherwise become obligated, to do anything prohibited by this Section 6.01(b).
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiaries.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 1 contract
Conduct of the Business Pending the Closing. (a) From the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”), except (i) Except as set forth otherwise expressly provided in Section 6.01 of the Disclosure Letter, (ii) as required by applicable Law, (iii) as expressly contemplated by this Agreement or the other Transaction Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (v) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned)Purchaser, the Company Member shall, and shall cause the Company to:
(i) conduct the businesses of the Company only in the Ordinary Course of Business;
(ii) use its Subsidiaries to, commercial reasonable efforts to (A) conduct preserve its present business operations, organization (including, without limitation, management and the sales force) and goodwill of the Company and (B) preserve its present relationship with Persons having business dealings with the Company (including, without limitation, customers and suppliers);
(iii) maintain (A) all of the assets and in the ordinary course of business properties of the Company in their business current condition, ordinary wear and tear excepted and (B) insurance upon all of the properties and assets of the Company in such amounts and of such kinds comparable to that in effect on the date of this Agreement;
(iv) (A) maintain the books, accounts and records of the Company in the Ordinary Course of Business, (B) continue to collect accounts receivable and pay accounts payable utilizing normal procedures and without discounting or accelerating payment of such accounts, and (C) comply with all contractual and other obligations applicable to the operation of the Company; and
(v) comply in all material respects, and respects with all applicable Laws; and
(Bvi) use commercially reasonable efforts to (1) preserve substantially intact their business organization and assets in all material respects; (2) preserve their current relationships with customers, suppliers, and other persons with not take any action which they have significant business relations; and (3) keep and maintain their assets and properties in substantially would adversely affect the same condition as they exist as ability of the date of parties to consummate the transactions contemplated by this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b).
(b) During the Interim Period, except (v) Except as set forth otherwise expressly provided in Section 6.01 of the Disclosure Letter; (w) as required by applicable Law; (x) as expressly contemplated by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (z) with the prior written consent of Buyer (which consent Purchaser, the Member shall not, and shall not be unreasonably withheld, delayed or conditioned), permit the Company shall not and shall cause its Subsidiaries not to:
(i) transfer, grant, issue, sell, authorize, encumber sell or dispose of any Equity Interests membership interest or other securities of the Company or any of its Subsidiaries or any grant options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom stock membership interests or other similar right with respect to, securities of the Company or any of its SubsidiariesCompany;
(ii) effect any recapitalization, reclassification, stock split or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Equity Interests of the Company or any of its Subsidiaries, or make any other similar like change in the capitalization of the Company or any of its SubsidiariesCompany;
(iii) adopt a plan amend the certificate of complete formation or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company or any of its Subsidiaries, or effect any operating agreement of the foregoingCompany;
(iv) amend (A) materially increase the Organizational Documents annual level of compensation of any employee of the Company, (B) increase the annual level of compensation payable or to become payable by the Company to any of their respective executive officers, (C) grant any unusual or extraordinary bonus, benefit or other direct or indirect compensation to any employee, director or consultant, (D) increase the coverage or benefits available under any (or create any new) severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan or arrangement made to, for, or with any of the directors, officers, employees, agents or representatives of the Company or otherwise modify or amend or terminate any such plan or arrangement or (E) enter into any employment, deferred compensation, severance, consulting, non-competition or similar agreement (or amend any such agreement) to which the Company is a party or involving a director, officer or employee of its Subsidiaries (whether by mergerthe Company in his or her capacity as a director, consolidation officer or otherwise)employee of the Company;
(v) make incur or assume any material change in any method of accounting or accounting practice of the Company or any of its Subsidiaries, except as required by changes in GAAPIndebtedness;
(vi) make subject to any material loans Lien or material advances or capital contributions to, or investments in, any Person (other than the Company and its Subsidiaries), or forgive any Indebtedness for borrowed moneyotherwise encumber or, except for advances Permitted Exceptions, permit, allow or suffer to employees or officers of the Company or any of its Subsidiaries for expenses incurred in the Ordinary Course of Business;
(vii) merge or consolidate with or acquire any corporationbe encumbered, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint venture, strategic alliance, or similar Contract;
(viii) amend, waive, modify or consent to the termination of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Business;
(ix) make any capital expenditures or commitments therefor that, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(x) sell, transfer, lease, sublease, mortgage, pledge or otherwise encumber or dispose of any of the properties or assets (whether tangible or intangible) of the Company;
(vii) acquire any material properties or assets or sell, assign, license, transfer, convey, lease or otherwise dispose of any of the material properties or assets of the Company;
(viii) enter into or agree to enter into any merger or consolidation with, any corporation or other entity, and not engage in any new business or invest in, make a loan, advance or capital contribution to, or otherwise acquire the securities of any other Person;
(ix) cancel or compromise any debt or claim or waive or release any material right of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business;
(xi) amend, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Business;
(xiix) enter into any Contract materially limiting in any way the ability commitment for capital expenditures of the Company in excess of $10,000 in the aggregate;
(xi) enter into, modify or terminate any labor or collective bargaining agreement of the Company or, through negotiation or otherwise, make any commitment or incur any liability to any labor organization with respect to the Company;
(xii) introduce any material change with respect to the operation of the Company, including any material change in the types, nature, composition or quality of its Subsidiaries to conduct business products or compete with any Person in any particular geographic location or line of businessservices, or, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business, make any change in product specifications or prices or terms of distributions of such products;
(xiii) commence any Proceeding, other than (A) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than with respect to a dividend or distribution from any Subsidiary of permit the Company to the Company enter into any transaction or any other Subsidiary of the Company);
(xv) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed money;
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend modify or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter;
(xvii) enter into renew any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated which by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts;
(xviii) make (except in the Ordinary Course of Business), change or revoke any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law;
(xix) settle or offer to settle any pending or threatened Proceeding involving the Company or any reason of its Subsidiariessize, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief nature or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner otherwise is not in the Ordinary Course of Business;
(xxixiv) abandon or permit the lapse except for transfers of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except cash pursuant to normal cash management practices in the Ordinary Course of Business; or, permit the Company to make any investments in or loans to, or pay any fees or expenses to, or enter into or modify any Contract with any Affiliate of the Company, or any director, officer or employee of the Company;
(xxiixv) resolvemake a change in its accounting or Tax reporting principles, commitmethods or policies;
(xvi) make, change or rescind any election relating to Taxes or settle or compromise any claim or proceeding relating to Taxes;
(xvii) file any amended Tax Return, settle any Tax claim or assessment or consent to any extension or waiver of the period of limitation on any Tax claim or assessment;
(xviii) enter into any Contract, understanding or otherwise become obligatedcommitment that restrains, restricts, limits or impedes the ability of the Company to compete with or conduct any business or line of business in any geographic area;
(xix) terminate, amend, restate, supplement or waive any rights under any Material Contract, Intellectual Property License or Permit; and
(xx) agree to do anything prohibited by this Section 6.01(b).
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at 7.2 or prior to the Closing, use all or anything which would make any portion of cash or cash equivalents of the Company representations and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests warranties of the Company and its Subsidiaries.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained Member in this Agreement is intended to give Buyer, directly or indirectly, the right to control Shareholder Documents untrue or direct Seller’s, the Company’s or incorrect in any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operationsmaterial respect.
Appears in 1 contract
Conduct of the Business Pending the Closing. (a) From During the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”), except (i) as set forth in Section 6.01 of the Disclosure Letteron Schedule 6.1(a), (ii) as required by applicable LawLaw or Contract, (iii) as expressly otherwise explicitly contemplated or required by this Agreement (including any actions taken in furtherance of the Restructuring, the Refinancing or the other Transaction Documents, acquisition of the Arizona Property) or (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (v) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, (A) conduct their business in the Ordinary Course of Business, in all material respects, and (B) use commercially reasonable efforts to (1) preserve substantially intact their business organization and assets in all material respects; (2) preserve their current relationships with customers, suppliers, and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially the same condition as they exist as of the date of this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b).
(b) During the Interim Period, except (v) as set forth in Section 6.01 of the Disclosure Letter; (w) as required by applicable Law; (x) as expressly contemplated by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (z) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall not (and shall cause its each of the Company Subsidiaries to) and the Sellers shall cause the Sterling Company, the Company and each of the Company Subsidiaries to: (A) conduct their respective businesses in the ordinary course of business consistent with past practice and (B) use commercially reasonable efforts to (1) preserve intact in all material respects the present business organizations of the members of the Company Group and (2) preserve in all material respects their present relationships with their material customers and suppliers; provided, that, for the avoidance of doubt, neither the Sellers nor the Company shall be obligated to cause any member of the Company Group or the Sterling Company to take, and shall not tobe deemed to be in breach of the foregoing for failing to cause the Company Group (other than the Company) or the Sterling Company to take, any action that would not be permitted by Section 6.1(b).
(b) During the Interim Period, except (i) as set forth on Schedule 6.1(b), (ii) as required by applicable Law or Contract, (iii) as otherwise explicitly contemplated or required by this Agreement (including any actions taken in furtherance of the Restructuring, the Refinancing or the acquisition of the Arizona Property) or (iv) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Sellers shall not cause or permit:
(i) transferother than as part of the Restructuring (including the repurchase of the Series A Preferred Units (as defined in the Company LLC Agreement)), grantthe repurchase, issueredemption or other acquisition of, sellor entrance into any Contracts or commitments to repurchase, authorizeredeem or otherwise acquire, encumber any outstanding beneficial interests in or dispose other securities of, or other ownership interests in, the Company Group or the Sterling Company;
(ii) other than as part of the Restructuring, the issuance or sale of any Equity Interests beneficial interests in or other equity interests of the Company Group or any the Sterling Company or the grant of its Subsidiaries or any options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom shares of the capital stock or other similar right with respect to, the Company or any of its Subsidiaries;
(ii) effect any recapitalization, or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Equity Interests equity interests of the Company Group or any of its Subsidiaries, or make any other similar change in the capitalization of the Company or any of its SubsidiariesSterling Company;
(iii) adopt other than as part of the Restructuring, any splits, combinations, subdivisions or reclassifications of any shares of the beneficial interests, capital stock or other equity interests of any member of the Company Group or the Sterling Company;
(iv) other than (1) as part of the Restructuring, (2) the transfer of the two ▇▇▇▇▇ Fargo accounts referred to in Schedule 4.21 outside of the Company Group and (3) the distribution or dividend of the note receivable from IO Singapore DCaaS Pte. Ltd., the authorization or payment of any dividends or the making of any distribution with respect to the outstanding beneficial interests, shares of capital stock or other equity interests of the members of the Company Group and the Sterling Company (whether in cash, assets, stock or other securities of the Company Group or the Sterling Company), except for (A) dividends and distributions made by the Company’ Subsidiaries to the Company or a Subsidiary of the Company; and (B) cash dividends or distributions paid or made by the Company or the Sterling Company at any time prior to the Closing;
(v) other than as part of the Restructuring, the adoption of a plan or agreement of complete or partial liquidation, liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company or any of its Subsidiaries, or effect any of the foregoing;
(iv) amend the Organizational Documents of the Company Group or any of its Subsidiaries (whether by merger, consolidation or otherwise);
(v) make any material change in any method of accounting or accounting practice of the Company or any of its Subsidiaries, except as required by changes in GAAPSterling Company;
(vi) make except as required by applicable Law, as required by any Benefit Plan, or in the ordinary course of business consistent with past practice, (A) any increase in any material loans respect of the level of compensation or material advances benefits payable or capital contributions to, provided (or investments in, to become payable or provided) to any Person (other than the Company and its Subsidiaries), or forgive any Indebtedness for borrowed money, except for advances to employees or officers employee of the Company or any of its Subsidiaries Group (except for expenses incurred increases in salaries, wages, commissions and bonuses in the Ordinary Course ordinary course of Businessbusiness) or (B) the establishment, entrance into, adoption, material amendment or termination of any Company Benefit Plan;
(vii) merge the making of any loan, advance or consolidate capital contribution to or investment in any Person by the members of the Company Group or the Sterling Company (other than (A) loans, advances or capital contributions to or investments in a Subsidiary of the Company or in the Company from the Sterling Company, (B) transactions in the ordinary course of business consistent with past practice to provide advances or acquire financing to customers in connection with the sale of products and services and/or the leasing of any corporationCompany Real Property by the Company Group, partnershipincluding tenant improvement obligations, limited liability company, other and (C) advances to employees for business organization or division thereof or any material amount expenses in the ordinary course of assets, or enter into any joint venture, strategic alliance, or similar Contractbusiness consistent with past practice);
(viii) amendthe settlement or compromise of any Legal Proceeding that (A) requires payment to or by any member of the Company Group in excess of $1,000,000 individually, waive(B) imposes material restrictions on the business of the Company Group, modify or consent (C) involves relief other than money damages which could be materially adverse to the business of the Company Group;
(ix) other than as part of the Refinancing, the material modification or amendment, termination or waiver of any material rights under any Material Contract (other than in the ordinary course of business or Insurance Policy, or amend, waive, modify or consent for terminations that occurs due to the termination expiration of the Company’s terms of such Material Contract) or any of its Subsidiaries’ rights thereunder, or enter the entrance into any Contract, new Contract that would be a Material Contract if entered into prior to the date hereof (in each case other than in the Ordinary Course ordinary course of Businessbusiness consistent with past practice in a manner that is not materially adverse to Company or the Company Subsidiaries);
(ixx) make other than as part of the Restructuring, the entrance into or modification of any capital expenditures Contract with any Affiliate of the Company (other than a member of the Company Group and other than as otherwise permitted by Section 6.1(b)(vii)), in each case by the Sterling Company or commitments therefor any member of the Company Group; except for commercial customer Contracts entered into with any such Affiliates on an arms’ length basis in the ordinary course of business consistent with past practice in a manner that is not materially adverse to Company or the Company Subsidiaries;
(xi) the making or the change of any Tax election, the filing of any amendment to any Tax Return, the settlement or compromise of any Tax Liability, the agreement to any extension or waiver of the statute of limitations with respect to the assessment or determination of Taxes, the entrance into any closing agreement with respect to Taxes, or the taking of any action to surrender any right to claim a material Tax refund, in each case by the Sterling Company or any member of the Company Group;
(xii) except as may be required by Law or GAAP, the making of any material change in the financial or Tax accounting methods, principles or practices of the Company (or change in an annual accounting period);
(xiii) the incurrence, redemption, prepayment, defeasance, cancelation, assumption, guarantee or, in any material respect, the modification of any Indebtedness, in each case by the Sterling Company or any member of the Company Group, other than, prior to the Closing, with respect to (A) any intercompany Indebtedness among members of the Company Group, (B) incurrence of Indebtedness under the Credit Agreement or the Interim Financing Agreement, (C) letters of credit, bankers’ acceptances and similar facilities issued and maintained by the Company Group in the ordinary course of business and reimbursement obligations in respect thereof, (D) any Indebtedness that will be discharged prior to the Closing, (E) prepayments of Indebtedness in the ordinary course of business, (F) the incurrence of Indebtedness as consideration for the repurchase of the Series A Preferred Units (as defined in the Company LLC Agreement) or (G) if the Closing has not occurred on or prior to January 10, 2018, the incurrence of the Interim Financing and payoff of Indebtedness under the Credit Agreement as part of the Refinancing.
(xiv) (A) the sale, lease, licensing, mortgage or the taking of any other action that would subject to a Lien (other than Permitted Liens) or the disposal of any material personal property, equipment or assets of the Company Group with a value or purchase price in the aggregate for such properties, assets or rights in excess of $2,500,000, other than (1) the execution of easements, covenants, rights of way, restrictions and other similar instruments that, individually or in the aggregate, deviate from would not reasonably be expected to materially impair the annual capital expenditures budget for existing use and operation of the property or asset affected by the applicable instrument, (2) pursuant to Contracts in force on the date of this Agreement, (3) dispositions of obsolete or immaterial assets in the ordinary course of business, (4) transfers among the Company and its Subsidiaries made available Group, (5) the transfer of the two ▇▇▇▇▇ Fargo accounts referred to Buyer by more than $3,000,000;
in Schedule 4.21 outside of the Company Group or (x6) sell, transferthe distribution or dividend of the note receivable from IO Singapore DCaaS Pte. Ltd. or (B) the sale, lease, subleaselicensing, mortgage, pledge mortgage or otherwise encumber or dispose the taking of any other action that would subject to a Lien (other than Permitted Liens) of the properties or assets any real property of the Company Group (including Company Real Property); in each case, other than (1) the execution of easements, covenants, rights of way, restrictions and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000other similar instruments that, individually or in the aggregate, would not reasonably be expected to materially impair the existing or planned use and for sales operation of the property or transfers asset affected by the applicable instrument, (2) in connection with the incurrence of inventory any Indebtedness permitted to be incurred by the Company pursuant to Section 6.1(b)(xiii), and (3) the execution of leases and licenses in the Ordinary Course ordinary course of Business;
business consistent with past practices and (xi4) amendpursuant to Contracts in force on the date of this Agreement, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single each case, except in the Ordinary Course of Business;
(xii) enter into any Contract materially limiting in any way the ability of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business;
(xiii) commence any Proceeding, other than (Ax) sales, leases, licenses and dispositions (including of modules, data center space, or any products or services offered in the Business as of the date hereof) in the Ordinary Course ordinary course of Business; business and (By) Proceedings seeking injunctive relief any Liens that may be imposed in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or Business (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests as of the Company or any date hereof) that is done in the ordinary course of its Subsidiaries (other than with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company)business;
(xv) incur the making of any Indebtedness acquisitions, in each case by the Sterling Company or any member of the Company Group, of (including by merger, consolidation or acquisition of stock or assets or any other business combination) (A) any Person or business including by acquiring the equity interests of such Person or a material portion of the assets of such Person or (B) any real property, in each case, for borrowed money consideration in excess of $500,000 in 1,000,000 individually, other than the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed moneyArizona Property;
(xvi) except as otherwise required the making of any capital expenditures, in each case by this Agreement, applicable Law, an existing Employee Benefit Plan the Sterling Company or an existing Contract pursuant to its terms in effect as any member of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employeesCompany Group, except in connection with general, (a) the ordinary course merit based increases of business, (b) for capital expenditures required pursuant to any customer Contract or (c) substantially in accordance with the capital expenditure budget attached hereto as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure LetterSchedule 7;
(xvii) enter into allow any Contract material Company Registered Intellectual Property to become abandoned, expire or transaction with Seller or any Affiliate thereofotherwise lapse, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts;
(xviii) make (except in the Ordinary Course of Business), change or revoke allow any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law;
(xix) settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing Confidential Information owned by the Company or any of its Subsidiaries;
Company Subsidiary to become public, other than (xxa) accelerate the collection of accounts receivable in accordance with their terms or delay the payment of accounts payable, in each case, in a manner not (b) in the Ordinary Course ordinary course of Business;
(xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of Businessbusiness; or
(xxiixviii) resolve, commit, enter into the agreement or commitment to take any Contract, or otherwise become obligated, to do anything of the foregoing actions prohibited by this Section 6.01(b6.1(b).
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company Buyer acknowledges and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to agrees that: (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiaries.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to shall give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s operations of the Company Group or any of its Subsidiaries’ businesses. Prior the Sterling Company prior to the Closing, Seller(ii) prior to the Closing, the Company Group and its Subsidiaries the Sterling Company shall each exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses operations and operations(iii) notwithstanding anything to the contrary set forth in this Agreement, no consent of Buyer shall be required with respect to any matter set forth in this Section 6.1 or elsewhere in this Agreement to the extent the requirement of such consent would violate any Law.
Appears in 1 contract
Conduct of the Business Pending the Closing. (a) From Prior to the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”)Closing, except (i) as set forth in Section 6.01 of the Disclosure Letteron Schedule 7.2(a), (ii) as required by applicable Law, (iii) as otherwise expressly contemplated by this Agreement or the other Transaction Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (v) with the prior written consent of Buyer Parent (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, :
(Ai) conduct their business the respective businesses of the Company and its Subsidiaries only in the Ordinary Course of Business, in all material respects, and ; and
(Bii) use its commercially reasonable efforts to (1A) preserve substantially intact their the present business operations, organization and assets in all material respects; goodwill of the Company and its Subsidiaries, (2B) preserve their current the present relationships with customerscustomers and suppliers of the Company and its Subsidiaries, suppliers, (C) maintain insurance coverage on such terms and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in such amounts substantially the same condition as they exist as of maintained on the date of this Agreement, ordinary wear Agreement and tear excepted; provided, that no action by (D) keep available the services of the current officers and key employees of the Company or any of and its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b)Subsidiaries.
(b) During the Interim Period, except Except (vi) as set forth in Section 6.01 of the Disclosure Letter; on Schedule 7.2(b), (wii) as required by applicable Law; , (xiii) as otherwise expressly contemplated by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (ziv) with the prior written consent of Buyer Parent (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall not not, and shall cause not permit its Subsidiaries not to:
(i) transferdeclare, grantset aside, issue, sell, authorize, encumber make or dispose pay any dividend or other distribution in respect of any Equity Interests the capital stock of the Company or repurchase, redeem or otherwise acquire, or grant any rights or enter into any Contracts or commitments to repurchase, redeem or acquire, any outstanding shares of its Subsidiaries or any options, warrants, convertible securities calls the capital stock or other rights to purchase or otherwise acquire Equity Interests securities of, or any stock appreciation, phantom stock or other similar right with respect toownership interests in, the Company or any of its Subsidiaries;
(ii) effect issue or sell any recapitalizationshares of capital stock or other securities of the Company or any of its Subsidiaries (except for any issuance made pursuant to the exercise of any Option) or grant options, warrants, calls or otherwise reclassify, combine, split, subdivide or redeem, or other rights to purchase or otherwise acquire, directly or indirectly, any acquire shares of the Equity Interests capital stock or other securities of the Company or any of its Subsidiaries;
(iii) effect any recapitalization, reclassification or make any other similar like change in the capitalization of the Company or any of its Subsidiaries;
(iiiiv) adopt a plan amend the certificate of complete incorporation or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization bylaws or other reorganization with respect to comparable organizational documents of the Company or any of its Subsidiaries, or effect any of the foregoing;
(ivv) amend except as set forth in Schedule 7.2(b), (A) increase the Organizational Documents annual level of compensation of any director, officer, employee or consultant of the Company or any of its Subsidiaries (whether by mergerexcept increases in salaries and wages of non-officer employees and consultants in the Ordinary Course of Business), consolidation (B) grant any bonus, equity or otherwise);
equity-based compensation, severance, benefit or other direct or indirect compensation to any director, executive officer, employee or consultant, (vC) make increase the coverage or benefits available under any material change (or create any new) severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other Company Benefit Plan or otherwise modify or amend or terminate any such Company Benefit Plan, (D) enter into any employment, deferred compensation, severance, consulting, non-competition or similar agreement (or amend any such agreement) to which the Company or any of its Subsidiaries is a party or involving any employee, consultant or director of the Company or any of its Subsidiaries that would be a Company Benefit Plan if it were in existence as of the date of this Agreement, or (E) hire or terminate any method of accounting executive officer or accounting practice vice president of the Company or any of its Subsidiaries, except except, in each case, as required as of the date of this Agreement by changes in GAAPthe terms of any Company Benefit Plans;
(vi) make acquire any material loans properties or assets or sell, assign, license, transfer, convey, lease or otherwise dispose of any of the material advances properties or capital contributions to, or investments in, any Person (other than the Company and its Subsidiaries), or forgive any Indebtedness for borrowed money, except for advances to employees or officers assets of the Company or any of its Subsidiaries for expenses incurred (except sales and non-exclusive licenses of products and sales in the Ordinary Course of BusinessBusiness or the disposal of obsolete or worthless assets);
(vii) merge make any loan, advance or consolidate with capital contribution to or acquire investment in any corporationPerson (other than (A) loans, partnership, limited liability company, other advances or capital contributions to or investments in a Subsidiary of the Company and (B) routine advances to employees for business organization or division thereof or expenses in the Ordinary Course of Business in an amount not exceeding $25,000 to any material amount of assets, or enter into any joint venture, strategic alliance, or similar Contractindividual employee);
(viii) amend, waive, modify or consent to the termination of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Business;
(ix) make , cancel or compromise any capital expenditures material debt or commitments therefor that, individually claim or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(x) sell, transfer, lease, sublease, mortgage, pledge waive or otherwise encumber or dispose of release any of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business;
(xi) amend, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Business;
(xii) enter into any Contract materially limiting in any way the ability material right of the Company or any of its Subsidiaries or permit any such right to conduct business lapse;
(ix) initiate, compromise or compete settle (A) any Legal Proceeding (other than in connection with any Person in any particular geographic location or line the enforcement of businessthe Company's rights under this Agreement), other than non-material Legal Proceedings, or (B) any material claim under any insurance policy for the entry benefit of the Company or any of its Subsidiaries;
(x) enter into, modify or terminate any labor or collective bargaining agreement or, through negotiations or otherwise, make any commitment or incur any Liability to any labor organizations;
(xi) enter into teaming or agree to enter into any merger or consolidation with any corporation or other entity, or acquire the securities or any division, business or all or substantially all of the assets of any other Person;
(xii) enter into or modify any Contract with any Stockholder or any Affiliate of any Stockholder;
(xiii) except to the extent required by Law, make, change or rescind any election relating to Taxes, change any method of Tax accounting, file any amended Tax Return, or settle or compromise any claim, investigation, audit or controversy relating to an amount of Taxes, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of Taxes, enter into any closing agreement with respect to any Tax or surrender any right to claim a Tax refund;
(xiv) except to the extent required by Law or GAAP, make any material change to any of its methods of accounting or methods of reporting revenue and exclusivity agreements expenses or accounting practices;
(xv) grant any licenses under any Intellectual Property of the Company and its Subsidiaries (other than non-exclusive licenses granted in the Ordinary Course of Business);
(xiiixvi) commence enter into any Proceedingjoint venture, general or limited partnership agreement, limited liability company agreement or other than similar agreement or any material joint development agreement;
(xvii) enter into any new Contract that would be a Material Contract if entered into on or prior to the date hereof or, except as required by their terms, terminate or amend, or modify any Material Contract or any such new Contract;
(xviii) incur (A) any Indebtedness (other than borrowings in the Ordinary Course of Business; Business under the Company's existing revolving credit facility) or (B) Proceedings seeking injunctive relief in order to prevent any Lien (other than Permitted Exceptions) on any asset or mitigate potential harm to the Company and its Subsidiaries; properties (whether tangible or (Cintangible) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than purchase money security interests in connection with respect to a dividend or distribution from any Subsidiary the acquisition of the Company to the Company or any other Subsidiary of the Company);
(xv) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except equipment in the Ordinary Course of Business Business);
(xix) amend, extend, renew or under the Company Credit Agreement; providedpermit to lapse existing insurance policies or enter into new insurance policies, that except in no event shall either case on such terms and for such amounts as is consistent with past practice;
(xx) enter into any Contract with any Person which provides such Person rights or entitlements in connection with a change of control of the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed money;
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter;
(xvii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts;
(xviii) make (except in the Ordinary Course of Business), change or revoke any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law;
(xix) settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business;or
(xxi) abandon agree or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of Business; or
(xxii) resolve, commit, enter into any Contract, or otherwise become obligated, commit to do anything prohibited by this Section 6.01(b7.2(b).
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiaries.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 1 contract
Conduct of the Business Pending the Closing. (a) From Prior to the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”)Closing, except (iw) as set forth in Section 6.01 of the Disclosure Letteron Schedule 6.1, (iix) as required by applicable Law, (iiiy) as expressly otherwise contemplated by this Agreement or the other Transaction Documents, (iv) subject to Section 6.01(d), as a result terms of the COVID-19 Measures or (v) with the prior written consent of Buyer (which consent shall not be unreasonably withheldASA Transactions, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, (A) conduct their business in the Ordinary Course of Business, in all material respects, and (B) use commercially reasonable efforts to (1) preserve substantially intact their business organization and assets in all material respects; (2) preserve their current relationships with customers, suppliers, and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially the same condition as they exist as of the date of this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b).
(b) During the Interim Period, except (v) as set forth in Section 6.01 of the Disclosure Letter; (w) as required by applicable Law; (x) as expressly contemplated by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (z) with the prior written consent of Buyer Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company shall not shall, and shall cause its Subsidiaries each of the Acquired Companies to use their respective reasonable efforts to (i) conduct the Business only in the Ordinary Course of Business, (ii) preserve the present business operations of the Business, (iii) preserve the present relationships with customers, suppliers and key employees of the Business and (iv) maintain or cause to be maintained in full force and effect all material insurance policies in effect as of the date of this Agreement (or comparable replacement coverage) with respect to the properties, assets or business of the Business.
(b) Prior to the Closing, except (w) as set forth on Schedule 6.1, (x) as required by applicable Law, (y) as otherwise contemplated by this Agreement or the terms of the ASA Transactions, or (z) with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), with respect to the Acquired Companies and the Business, the Company shall not, and shall cause each of the Acquired Companies not to:
(i) transfer, grant, issue, sell, authorize, encumber or dispose of (or authorize the issuance, sale or disposition of), any Equity Interests shares of the Company capital stock, ownership interests or any of its Subsidiaries voting securities, or any options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom stock or other similar right with respect to, the Company or any of its Subsidiaries;
(ii) effect any recapitalization, or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Equity Interests of the Company or any of its Subsidiaries, or make any other similar change in the capitalization of the Company or any of its Subsidiaries;
(iii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company or any of its Subsidiaries, or effect any of the foregoing;
(iv) amend the Organizational Documents of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise);
(v) make any material change in any method of accounting or accounting practice of the Company or any of its Subsidiaries, except as required by changes in GAAP;
(vi) make any material loans or material advances or capital contributions to, or investments in, any Person (other than the Company and its Subsidiaries), or forgive any Indebtedness for borrowed money, except for advances to employees or officers of the Company or any of its Subsidiaries for expenses incurred in the Ordinary Course of Business;
(vii) merge or consolidate with or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint venture, strategic alliance, or similar Contract;
(viii) amend, waive, modify or consent to the termination of any Material Contract or Insurance Policy, or amend, waive, modify or consent kind to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Business;
(ix) make any capital expenditures or commitments therefor that, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(x) sell, transfer, lease, sublease, mortgage, pledge or otherwise encumber or dispose of any of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business;
(xi) amend, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Business;
(xii) enter into any Contract materially limiting in any way the ability of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business;
(xiii) commence any Proceeding, other than (A) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company);
(xv) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed money;
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter;
(xvii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts;
(xviii) make (except in the Ordinary Course of Business), change or revoke any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law;
(xix) settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business;
(xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of Business; acquire or
(xxii) resolve, commit, enter into any Contract, or otherwise become obligated, to do anything prohibited by this Section 6.01(b).
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiaries.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 1 contract
Sources: Merger Agreement
Conduct of the Business Pending the Closing. (a) From the date hereof through the earlier of Prior to the Closing or the earlier termination of this Agreement (the “Interim Period”)Agreement, except except: (i) as set forth in Section 6.01 of the Disclosure Letter, (ii) as required by applicable Law, ; (iiiii) as expressly otherwise contemplated by this Agreement or the other Transaction Documents, Agreement; (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (viii) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned); or (iv) as set forth on Schedule 6.2, the Company shall, and shall cause its the Subsidiaries to, (A) conduct their business the respective businesses of the Company and the Subsidiaries only in the Ordinary Course of Business, in all material respects, and (B) use commercially reasonable efforts to (1) preserve substantially intact their business organization and assets in all material respects; (2) preserve their current relationships with customers, suppliers, and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially the same condition as they exist as of the date of this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b).
(b) During Prior to the Interim PeriodClosing or earlier termination of this Agreement, except except: (v) as set forth in Section 6.01 of the Disclosure Letter; (wi) as required by applicable Law; (xii) as expressly otherwise contemplated by this Agreement or the other Transaction DocumentsAgreement; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (ziii) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned); or (iv) as set forth on Schedule 6.2, the Company shall not not, and shall cause its the Subsidiaries not to:
(i) transfer, grant, issue, sell, authorize, encumber sell or dispose of any Equity Interests shares of capital stock or other securities of the Company or any of its the Subsidiaries or any grant options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom shares of the capital stock or other similar right with respect to, securities of the Company or any of its the Subsidiaries, except for the exercise of Options or, in the Ordinary Course of Business, the grant of options under the Option Plan;
(ii) effect any recapitalization, reclassification or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Equity Interests of the Company or any of its Subsidiaries, or make any other similar like change in the capitalization of the Company or any of its Subsidiariesthe Subsidiaries or pay any dividends;
(iii) adopt a plan amend the Certificate of complete or partial liquidationIncorporation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company or any of its SubsidiariesBylaws, or effect comparable organizational documents of any of the foregoingSubsidiaries;
(iv) amend other than in the Organizational Documents Ordinary Course of Business or as required by Law or Contract, (A) increase the annual level of compensation of any director or employee of the Company or any of its Subsidiaries the Subsidiaries, (whether by mergerB) grant any unusual or extraordinary bonus or other direct or indirect compensation to any director or employee, consolidation (C) materially increase the coverage or otherwise)benefits available under any Company Benefit Plan or (D) enter into any employment, deferred compensation, severance, consulting, non-competition or similar agreement;
(v) make subject any material change in any method of accounting the properties or accounting practice assets (whether tangible or intangible) of the Company or any of its Subsidiariesthe Subsidiaries to any material Lien, except as required by changes in GAAPfor Permitted Exceptions;
(vi) make acquire any material loans properties or assets or sell, assign, license, transfer, convey, lease or otherwise dispose of any of the material advances properties or capital contributions to, or investments in, any Person (other than assets of the Company and its the Subsidiaries), or forgive any Indebtedness taken as a whole, (except pursuant to an existing Contract for borrowed money, except for advances to employees or officers of the Company or any of its Subsidiaries for expenses incurred fair consideration in the Ordinary Course of BusinessBusiness or for the purpose of disposing of obsolete or worthless assets);
(vii) merge or consolidate with or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint venture, strategic alliance, or similar Contract;
(viii) amend, waive, modify or consent to the termination of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Business, cancel or compromise any material debt or claim owing to the Company;
(viii) enter into any commitment for capital expenditures of the Company and the Subsidiaries in excess of $100,000 for any individual commitment and $500,000 for all commitments in the aggregate;
(ix) make any capital expenditures or commitments therefor that, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more other than $3,000,000;
(x) sell, transfer, lease, sublease, mortgage, pledge or otherwise encumber or dispose of any of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business;
(xi) amend, extendenter into, renew, modify or terminate any labor or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Business;
(xii) enter into any Contract materially limiting in any way the ability collective bargaining agreement of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of BusinessSubsidiaries;
(xiiix) commence any Proceeding, other than (A) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of permit the Company or any of its the Subsidiaries to enter into or agree to enter into any merger or consolidation with any Person (other than with respect to a dividend or distribution from merger of any wholly-owned Subsidiary of the Company to into the Company or any other Subsidiary one of the Company’s Subsidiaries);
(xvxi) incur make or rescind any Indebtedness for borrowed money in excess material election relating to Taxes, settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to a material amount of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorseTaxes, or otherwise become responsible for, the obligations of make any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or material change to any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment methods of any indebtedness accounting for borrowed money;
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals Tax purposes from those employed in the Ordinary Course preparation of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter;
(xvii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts;
(xviii) make (except in the Ordinary Course of Business), change or revoke any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended most recent Tax Return, enter into any closing agreement, settlement, or compromise of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law;
(xix) settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business;
(xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of Business; or
(xxiixii) resolve, commit, enter into any Contract, or otherwise become obligated, agree to do anything prohibited by this Section 6.01(b6.2(a).
(c) Notwithstanding the foregoing provisions of this Section 6.01foregoing, during the period from the date hereof until the Effective Time, the Company and its the Subsidiaries may, at or prior shall be permitted to the Closing, use utilize any and all or any portion of cash or cash equivalents of the Company and its Subsidiaries to available Cash (i) repay any outstanding indebtedness under the to pay Company Credit AgreementTransaction Expenses; or and (ii) declare and pay cash dividends with respect to repay outstanding Debt (including amounts owing under the Equity Interests of the Company and its SubsidiariesManagement Agreement).
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 1 contract
Conduct of the Business Pending the Closing. (a) From During the date hereof through the earlier of the Pre-Closing or the termination of this Agreement (the “Interim Period”), except (i) as set forth otherwise expressly provided in Section 6.01 of the Disclosure Letter, (ii) as required by applicable Law, (iii) as expressly or contemplated by this Agreement or with the other Transaction Documentsconsent of Parent, (iv) subject to Section 6.01(d), as a result each of the COVID-19 Measures or (v) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, shall (Ai) conduct their business operate its Business in the Ordinary Course of Business, in all material respects, Business and (Bii) use commercially reasonable efforts to (1) preserve substantially intact their its current business organization organization, keep available the services of its current officers and assets in all material respects; (2) key employees and preserve their current its relationships with material customers, suppliers, licensors, licensees and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially distributors. Without limiting the same condition as they exist as generality of the date of this Agreementforegoing, ordinary wear and tear excepted; provided, that no action by during the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b).
(b) During the Interim Pre-Closing Period, except (v) as set forth in Section 6.01 of the Disclosure Letter; (w) as required by applicable Law; (x) as expressly contemplated by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (z) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall not not, and shall cause its Subsidiaries not to, without the prior written consent of Parent:
(a) (i) transfer, grant, issue, sell, authorizepledge, encumber or dispose of any Equity Interests shares of capital stock or other securities of, or other ownership interests in, the Company or any of its Subsidiaries or any Subsidiaries; (ii) grant options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests shares of the capital stock or other securities of, or any stock appreciation, phantom stock or other similar right with respect toownership interests in, the Company or any of its Subsidiaries, other than as a result of the settlement of Restricted Stock Units or the exercise of Options, in each case, in accordance with their terms as in effect on the date hereof; or (iii) accelerate the vesting of any Options, Restricted Stock or Restricted Stock Units except as contemplated pursuant to Sections 1.7(a), 1.7(b) or 1.7(c);
(iii) effect any recapitalization, or otherwise reclassifyreclassification, combine, stock split, subdivide combination or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Equity Interests of the Company or any of its Subsidiaries, or make any other similar like change in the capitalization of the Company or any of its Subsidiaries;
(iii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company or any of its Subsidiaries, or effect any of the foregoing;
(iv) amend the Organizational Documents terms of any outstanding securities or the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise);
(v) make any material change in any method of accounting or accounting practice underlying agreements related thereto of the Company or any of its Subsidiaries; (ii) declare, except as required by changes set aside or pay any dividend or other distribution payable in GAAP;
cash, stock or other property whether or not in respect of its capital stock; or (viiii) make redeem, purchase or otherwise acquire directly or indirectly any material loans or material advances or of the capital contributions to, or investments in, any Person (other than the Company and its Subsidiaries), or forgive any Indebtedness for borrowed money, except for advances to employees or officers stock of the Company or any of its Subsidiaries for expenses incurred in the Ordinary Course of BusinessSubsidiaries;
(viic) merge except as set forth in Sections 1.3 and 1.4, amend the Articles of Incorporation or consolidate with or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount Bylaws of assets, or enter into any joint venture, strategic alliance, the Company or similar Contract;
(viii) amend, waive, modify or consent to the termination organizational documents of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, by operation of law or enter into any Contract, in each case other than in the Ordinary Course of Businessotherwise;
(ixd) make spend or commit to any new capital expenditures or commitments therefor that(other than capital expenditures already reserved pursuant to the budget for the current fiscal year) in excess of $50,000, whether individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(xe) sell(i) grant or announce any increase in the salary, transferseverance or other direct or indirect compensation or benefits payable or to become payable to any Service Provider (except as required by Law or under any existing Employee Plan as in effect on the date hereof); (ii) except as set forth in Section 4.3(e)(ii) of the Disclosure Letter, leasegrant any bonus, sublease, mortgage, pledge benefit or otherwise encumber other direct or dispose of indirect compensation to any Service Provider not required by any of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business;
(xi) amend, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Business;
(xii) enter into any Contract materially limiting in any way the ability of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business;
(xiii) commence any Proceeding, other than (A) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company);
(xv) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed money;
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms Plans as in effect as of on the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (Biii) hire loan or terminate (advance any money or other than terminations for cause and replacement of individuals terminated for cause) the employment of property to any employee whose annual base salary exceeds $250,000 Service Provider or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan Related Person (except changes to group healthcare or welfare benefits advancement of expenses as required by any of the existing Employee Plans as in connection with annual renewals effect on the date hereof in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (Eiv) materially increaseexcept as required by Law, amend, terminate, modify, extend, or announce materially increase the benefits provided under, any Employee Plan or promise a material increase inenter into, the compensation grant, or benefits payable to adopt any current or former directors, managers, officers, individual service providers or any other employees, except arrangement that would be an Employee Plan if in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to effect on the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letterhereof;
(xviif) enter into subject any Contract or transaction with Seller or of its assets to any Affiliate thereofLien, or any Related Party of the Company except Permitted Exceptions;
(excluding the Company and its Subsidiaries), other than (Ag) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller except in the Ordinary Course of Business pursuant to the Affiliate Contractsconsistent with past practice, sell, assign, license, lease or transfer any of its assets or property;
(xviiih) waive any rights of material value;
(i) amend, modify or change any of its accounting policies, practices or procedures, except as required by GAAP;
(j) (i) amend, modify, make, change or rescind any material Tax election; (ii) enter into any Tax sharing, Tax indemnity or closing agreement pursuant to Section 7121 of the Code (or any similar provision of Law); (iii) settle or compromise any Tax Claim, notice, audit report or assessment; (iv) file any amended income or other material Tax Returns; (v) amend, modify or make any change to (except or make a request to change) its Tax accounting or reporting principles, periods, methods or practices; (vi) surrender any right to claim a refund of Taxes; (vii) file any income or other material Tax Return other than one prepared in the Ordinary Course of Business), change ; or revoke any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of any material Tax claim or assessment, or (viii) consent to any extension or waiver of the limitation period applicable to any income or other material Tax claim Return, Tax Claim or assessment assessment;
(k) acquire (by merger, consolidation or other combination, or acquisition of stock or assets or otherwise) any interest in any Person;
(l) delay or postpone any payment of any accounts payable or other payables or expenses, or accelerate the collection of accounts receivable or cash collections of any type other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law;
(xixm) settle amend, modify, elect not to renew or offer terminate any Material Contract or enter into any Contract that if entered into prior to settle the date hereof would have been a Material Contract;
(n) amend, modify or make any pending or threatened Proceeding involving changes in the Company Company’s or any of its Subsidiaries’ standardized or other sales terms and conditions, other than except in the Ordinary Course of Business;
(o) (i) incur, create or assume Indebtedness or amend, modify or make any settlement solely for monetary relief to be paid in full prior changes to the Closing terms of not more than $1,000,000 any Indebtedness, whether individually and or in the aggregate (it being understood that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include may satisfy any material findings outstanding Indebtedness prior to Closing); (ii) guarantee any such Indebtedness or admission obligation of another Person; or wrongdoing by (iii) issue or sell any debt securities or rights to acquire any debt securities of the Company or any of its Subsidiaries;
(xxp) accelerate settle or compromise any pending or threatened Legal Proceeding or any claim, except for settlements or compromises in an amount less than $10,000, whether individually or in the collection aggregate (and with respect to any demand for fair value under the MBCA, subject to the limitations set forth in Section 4.14), for which the Company its Subsidiaries receives a full release;
(q) amend, modify, terminate or make any changes to coverage levels of accounts receivable or delay any insurance policy set forth in Section 2.18 of the payment of accounts payableDisclosure Letter;
(r) sell, in each casemodify, in a manner not amend, license (other than non-exclusive licenses granted to customers in the Ordinary Course of BusinessBusiness pursuant to sales of Products not otherwise restricted by this Section 4.3) or otherwise transfer any rights under or to the Owned Intellectual Property, or terminate, default or otherwise fail to maintain any license to any material Licensed Intellectual Property;
(xxis) abandon enter into any commitment or transaction which would constitute a breach of the representations, warranties or agreements contained in this Agreement, or take any action or fail to take an action or, to the extent within the Company’s control, permit the lapse of to occur any material Intellectual Property rights event that, individually or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except aggregate, could reasonably be expected to result in the Ordinary Course of Businessa Material Adverse Effect; or
(xxiit) resolve, agree or commit, enter into any Contract, whether in writing or otherwise become obligatedotherwise, to do anything prohibited by this Section 6.01(b).
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiariesforegoing.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 1 contract
Conduct of the Business Pending the Closing. (a) From the date hereof through the earlier of (x) the date this Agreement is terminated pursuant to Section 4.2 or (y) the Closing or the termination of this Agreement (the “Interim Period”)Date, except (iI) as set forth in Section 6.01 of the Disclosure Letteron Schedule 8.2, (iiII) as required by applicable Law, (iiiIII) as expressly otherwise contemplated by this Agreement or the other Transaction Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (vIV) with the prior written consent of Buyer Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, :
(Ai) conduct their the business of the Company only in the Ordinary Course of Business, Business and in material compliance with all material respects, and Laws; and
(Bii) use its commercially reasonable efforts to (1A) maintain the value of the Company’s business as a going concern, (B) preserve substantially intact their the present business operations, organization (including officers and assets in all material respects; employees) and goodwill of the Company, and (2C) preserve their current the present relationships with customers, suppliers, and other persons Persons having business dealings with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially the same condition as they exist as of the date of this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b(including customers and suppliers).
(b) During the Interim Period, except Except (vI) as set forth in Section 6.01 of the Disclosure Letter; on Schedule 8.2, (wII) as required by applicable Law; , (xIII) as expressly otherwise contemplated by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (zIV) with the prior written consent of Buyer Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall not and shall cause its Subsidiaries not tonot:
(i) declare, set aside, make or pay any dividend or other distribution in respect of the capital stock of the Company or repurchase, redeem or otherwise acquire any outstanding shares of the capital stock or other securities of, or other ownership interests in, the Company
(ii) transfer, grant, issue, sell, authorize, encumber sell or dispose of any Equity Interests shares of capital stock or other securities of the Company or any of its Subsidiaries or any grant options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom shares of the capital stock or other similar right with respect to, securities of the Company or any of its SubsidiariesCompany;
(iiiii) effect any recapitalization, reclassification or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Equity Interests of the Company or any of its Subsidiaries, or make any other similar like change in the capitalization of the Company or any of its Subsidiaries;
(iii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company or any of its Subsidiaries, or effect any of the foregoingCompany;
(iv) amend the Organizational Documents certificate of incorporation or by-laws or comparable organizational documents of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise)Company;
(v) make sell, lease or otherwise dispose of any material change in any method of accounting or accounting practice assets of the Company (except for sales or any other dispositions of its Subsidiaries, except as required by changes advertising or inventory in GAAPthe Ordinary Course of Business);
(vi) make license any material loans or material advances or capital contributions to, or investments in, any Person (other than the Company and its Subsidiaries), or forgive any Indebtedness for borrowed money, except for advances to employees or officers Intellectual Property of the Company to or any of its Subsidiaries for expenses incurred from third parties to the extent not in the Ordinary Course of Business;
(vii) merge (A) materially increase the salary or consolidate wages of any employee of the Company, (B) grant any unusual, special or extraordinary bonus to any employee of the Company, (C) materially increase the coverage or benefits available under any Company Benefit Plan as applied to Company employees or accelerate the time of payment or vesting, or lapsing of restrictions with respect to, or acquire fund or otherwise secure the payment of, any corporation, partnership, limited liability company, other business organization compensation or division thereof benefits under any Company Benefit Plan (or any material amount compensation or benefit plan or arrangement that would be a Company Benefit Plan if in effect on the date hereof) as applied to Company employees or (D) permit any employee of assets, or enter into the Company to participate in any joint venture, strategic alliance, or similar Contractnew arrangement that would be a Company Benefit Plan if in effect on the date hereof;
(viii) amend, waive, modify or consent to the termination of change any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s accounting policies or practices;
(ix) waive any provision of its Subsidiaries’ rights thereunderany confidentiality or employee invention assignment agreement to which it is a party;
(x) terminate or materially amend or modify any privacy policy governing the acquisition, sharing, use or enter into security from unauthorized disclosure of PII that is possessed or otherwise subject to the control of the Company;
(xi) accelerate accounts receivable (including by the offering of discounts for payment), delay payment on accounts payable or take other actions out of the Ordinary Course of Business the intent or primary effect of which is to increase any Contractamounts payable to Seller under Section 3.3 hereof;
(xii) mortgage, pledge or otherwise subject to any Lien, any property or assets of the Company other than (A) conditional sales or similar security interests granted in each case connection with the lease or purchase or equipment or supplies in the Ordinary Course of Business and (B) Permitted Exceptions;
(xiii) other than in the Ordinary Course of Business;
(ix) make any capital expenditures or commitments therefor that, individually or in the aggregateterminate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(x) sell, transfer, lease, sublease, mortgage, pledge or otherwise encumber or dispose of any of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business;
(xi) amend, extendrestate, renew, terminate supplement or enter into waive any lease of real or personal property or rights under any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Business;
(xii) enter into any Contract materially limiting in any way the ability of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business;
(xiii) commence any Proceeding, other than (A) in the Ordinary Course of Business; material Contract, Real Property Lease, Personal Property Lease or Intellectual Property license or (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in naturematerial Permit;
(xiv) declare, issue, make or pay enter into any dividend or other distribution of assets in respect of any Equity Interests commitment for capital expenditures of the Company or any of its Subsidiaries (other than inconsistent with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company)’s 2012 capital expenditure budget set forth on Schedule 8.2;
(xv) incur enter into or agree to enter into any Indebtedness for borrowed money in excess of $500,000 in the aggregate merger or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of consolidation with any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed money;or
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus make or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter;
(xvii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts;
(xviii) make (except in the Ordinary Course of Business), change or revoke any material Tax election, adopt or change any material Tax accounting period or material accounting method for Tax purposesmethod, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of settle any material Tax claim or assessment, surrender any right to claim a material refund of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business)assessment, in each case, except as required by Law;
(xix) settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior case relating to the Closing Company, if such election, change, filing, settlement, surrender or consent would have the effect of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on materially increasing the conduct Tax liability of the Company or for any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by taxable period ending after the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business;
(xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of BusinessClosing Date; or
(xxiixvii) resolve, commit, enter into any Contract, or otherwise become obligated, Contracts that would impose obligations to do anything prohibited by any of the actions referred to in this Section 6.01(b).
(c) Notwithstanding the foregoing provisions of this Section 6.01, 8.2. Purchaser shall respond with reasonable promptness to any and all requests by the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of for consent(s) for the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiaries.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained specified in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operationsSection 8.2.
Appears in 1 contract
Conduct of the Business Pending the Closing. (a) From Prior to the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”)Closing, except (i) as set forth in Section 6.01 of the Disclosure Letteron Schedule 9.2, (ii) as required by applicable Law, (iii) as expressly otherwise contemplated by this Agreement or the other Transaction Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (v) with the prior written consent of Buyer Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and the LLC shall cause its Subsidiaries to, each:
(Ai) conduct their business the respective businesses of the Company and the LLC only in the Ordinary Course of BusinessBusiness and not make or institute any material changes in its method of purchase, in all material respectssale, and management, accounting or operation;
(Bii) use its commercially reasonable efforts to (1A) maintain and preserve the present business operations, organization and goodwill of the Company and the LLC respectively, (B) preserve substantially intact their business organization and assets in all material respects; (2) preserve their current the present relationships with customers, suppliers, suppliers and other persons others having business relations with which they have significant business relations; the Company and the LLC respectively and (3C) to keep and maintain their assets and properties in substantially available to the same condition as they exist as Company the employees of the date of this Agreement, ordinary wear Company; and
(iii) pay all Taxes before such Taxes become delinquent unless contested in good faith by appropriate proceedings and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect notice is provided to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b)Purchaser.
(b) During the Interim Period, except Except (vi) as set forth in Section 6.01 of the Disclosure Letter; on Schedule 9.2, (wii) as required by applicable Law; , (xiii) as expressly otherwise contemplated by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (ziv) with the prior written consent of Buyer Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), each of the Company and the LLC shall not not, and the Selling Holders shall cause its Subsidiaries the Company and the LLC not to:
(i) declare, set aside, make or pay any dividend or other distribution in respect of the capital stock of the Company or the LLC, as applicable, or repurchase, redeem or otherwise acquire any outstanding shares of the capital stock or other securities of, or other ownership interests in, the Company or the LLC;
(ii) transfer, grant, issue, sell, authorize, encumber sell or dispose of any Equity Interests shares of capital stock or other securities of the Company or any of its Subsidiaries the LLC or any grant options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom shares of the capital stock or other similar right with respect to, securities of the Company or any of its Subsidiariesthe LLC;
(iiiii) effect any recapitalization, reclassification or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Equity Interests of the Company or any of its Subsidiaries, or make any other similar like change in the capitalization of the Company or any of its Subsidiaries;
(iii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company or any of its Subsidiaries, or effect any of the foregoingLLC;
(iv) amend the Organizational Documents organizational documents of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise)the LLC;
(vA) make increase the compensation of any material change in any method of accounting director or accounting practice employee of the Company or any of its Subsidiariesthe LLC, except for increases at such times and in such amounts as are consistent with the past practices of the Company or the LLC, as the case may be; (B) grant any bonus, benefit or other direct or indirect compensation to any director or employee of the Company or the LLC except in the Ordinary Course of Business consistent with past practice, (C) increase the coverage or benefits available under any (or create any new) severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan or arrangement made to, for, or with any current or former director or employee of the Company or the LLC or otherwise modify or amend or terminate any such plan or arrangement or (D) enter into any employment, deferred compensation, severance, consulting, non-competition or similar agreement (or amend any such agreement) to which the Company or the LLC is a party or involving a director or employee of the Company or the LLC, except, in each case, as required by changes applicable Law from time to time in GAAPeffect or by the terms of any Company Benefit Plans;
(vi) make subject to any material loans or material advances or capital contributions to, or investments inLien, any Person Company Property or any of the other properties or assets (other than the Company and its Subsidiaries), whether tangible or forgive any Indebtedness for borrowed money, except for advances to employees or officers intangible) of the Company or any of its Subsidiaries the LLC, except for expenses incurred in the Ordinary Course of BusinessPermitted Exceptions;
(vii) merge or consolidate with or acquire any corporation, partnership, limited liability company, other business organization properties or division thereof or any material amount assets outside of assets, or enter into any joint venture, strategic alliance, or similar Contract;
(viii) amend, waive, modify or consent to the termination of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Business;
(ix) make any capital expenditures Business or commitments therefor thatsell, individually or in the aggregateassign, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(x) selllicense, transfer, leaseconvey, sublease, mortgage, pledge lease or otherwise encumber or dispose of any of the properties or assets of the Company and its Subsidiaries, or the LLC (except pursuant to an existing Contract for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business;
(xi) amend, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Business;
(xii) enter into any Contract materially limiting in any way the ability of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business;
(xiii) commence any Proceeding, other than (A) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company);
(xv) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except fair consideration in the Ordinary Course of Business or under for the Company Credit Agreement; provided, that in no event shall the Company purpose of disposing of obsolete or any of its Subsidiaries, except as provided in Section 6.01(cworthless assets), make any optional repayment of any indebtedness for borrowed money;
(xviviii) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); , cancel or compromise any material debt or claim or waive or release any material right of the Company or the LLC;
(Dix) commence or enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by commitment for capital expenditures of the Company or its applicable Subsidiaries prior to the date hereof LLC in excess of fifty thousand dollars ($50,000) for any individual commitment and set forth four hundred thousand dollars ($400,000) for all commitments in Section 6.1(b)(xv) of the Disclosure Letteraggregate;
(xviix) enter into, modify or terminate any labor or collective bargaining agreement of the Company or the LLC or, through negotiations or otherwise, make any commitment or incur any liability to any labor organizations;
(xi) permit the Company or the LLC to enter into or agree to enter into any Contract merger or transaction consolidation with Seller any corporation or any Affiliate thereofother entity, or any Related Party of acquire the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses securities of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contractsother Person;
(xviiixii) make (except other than in the Ordinary Course of Business), change permit the Company or revoke the LLC to enter into or modify any material Tax election, change Contract with any material accounting period Selling Holder or material accounting method for Tax purposes, file any material amended Tax Return, Affiliate of any Selling Holder;
(xiii) enter into any closing agreement, settlement, or compromise other Contract outside of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business)Business or which requires a payment or other obligation in excess of twenty five thousand dollars ($25,000) or amend, in each case, except as required by Lawsupplement or modify any lease for real property;
(xixxiv) make any Tax election or settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include compromise any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business;
(xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of BusinessTax liability; or
(xxiixv) resolve, commit, enter into any Contract, or otherwise become obligated, agree to do anything prohibited by this Section 6.01(b)9.2.
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiaries.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 1 contract
Conduct of the Business Pending the Closing. (a) From the date hereof through the earlier of this Agreement until the Closing or the earlier termination of this Agreement (the “Interim Pre-Closing Period”), except as consented to in writing by Buyer or as expressly set forth in this Agreement, Sellers and the Company shall cause the Company to operate in the Ordinary Course of Business (i) including, without limitation, with respect to the collection of accounts receivable and payments of accounts payable). Without limiting the generality of the foregoing, except as set forth in Section 6.01 of the Disclosure Letter, (ii) on Schedule 8.1 hereto or as required by applicable Law, (iii) as expressly otherwise specifically contemplated by this Agreement or consented to in writing by Buyer:
(i) Sellers and the other Transaction DocumentsCompany shall use commercially reasonable efforts to (a) preserve the business of the Company substantially intact, (ivb) subject to Section 6.01(d), as a result keep available the services of the COVID-19 Measures Employees, (c) to preserve the goodwill of suppliers, providers, plan members and others having business dealings or (v) relations with the prior written consent Company, (d) maintain its books and records consistent with past practices and applicable Law in all material respects, (e) pay all liabilities and obligations of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, (A) conduct their business in the Ordinary Course of Business, in all material respects, and (Bf) use commercially reasonable efforts to (1) preserve substantially intact their business organization maintain reserves and assets in all material respects; (2) preserve their current relationships with customers, suppliers, and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially the same condition as they exist as of the date of this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed statutory net worth sufficient to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b).
(b) During in compliance with all applicable Laws, including the Interim Period, except (v) as set forth in Section 6.01 of the Disclosure Letter; (w) as required by applicable Law; (x) as expressly contemplated by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (z) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall not and shall cause its Subsidiaries not to:
(i) transfer, grant, issue, sell, authorize, encumber or dispose of any Equity Interests of the Company or any of its Subsidiaries or any options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom stock or other similar right with respect to, the Company or any of its SubsidiariesHMO Statute;
(ii) effect any recapitalization, or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquirethe Company shall maintain insurance coverage reasonably appropriate for the conduct of its business and consistent with past practices;
(iii) Sellers and the Company shall not, directly or indirectly, engage in any act or omission that results in a breach of any of the Equity Interests representations, warranties, agreements or covenants made by Sellers or the Company in this Agreement as of the Signing Date or as brought down as of the Closing Date; and
(iv) The Company shall not make a material capital expenditure, distribution or dividend, enter into or amend any Material Contract, enter into any management, administrative services or marketing contract with respect to its business, or enter into or amend a contract with the Sellers or an Affiliate of the Company or any of its Subsidiaries, or make any other similar change in the capitalization of the Company or any of its Subsidiaries;
(iii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company or any of its Subsidiaries, or effect any of the foregoing;
(iv) amend the Organizational Documents of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise);
(v) make any material change in any method of accounting or accounting practice of the Company or any of its Subsidiaries, except as required by changes in GAAP;
(vi) make any material loans or material advances or capital contributions to, or investments in, any Person Sellers (other than the Company and its Subsidiaries), or forgive any Indebtedness for borrowed money, except for advances to employees or officers of the Company or any of its Subsidiaries for expenses incurred in the Ordinary Course of Business;
(vii) merge or consolidate with or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint venture, strategic alliance, or similar Contract;
(viii) amend, waive, modify or consent to the termination of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Business;
(ix) make any capital expenditures or commitments therefor that, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(x) sell, transfer, lease, sublease, mortgage, pledge or otherwise encumber or dispose of any of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business;
(xi) amend, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Business;
(xii) enter into any Contract materially limiting in any way the ability of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business;
(xiii) commence any Proceeding, other than (A) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any cash dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company);
(xv) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided described in Section 6.01(c), make any optional repayment of any indebtedness for borrowed money;
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter;
(xvii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts;
(xviii) make (except in the Ordinary Course of Business), change or revoke any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law;
(xix) settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business;
(xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of Business; or
(xxii) resolve, commit, enter into any Contract, or otherwise become obligated, to do anything prohibited by this Section 6.01(b3.6).
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiaries.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 1 contract
Conduct of the Business Pending the Closing. (a) From During the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”), except (i) as set forth in Section 6.01 of the Disclosure Letteron Schedule 6.1(b), (ii) as required by applicable Law, (iii) as otherwise expressly contemplated required by this Agreement or the other Transaction Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (v) with the prior written consent of Buyer Parent (which consent shall not be unreasonably withheld, delayed or conditioned) (provided, however, that Parent shall be deemed to have consented if Parent does not object in writing within ninety-six (96) hours after a written request for such consent is delivered to Parent by the Company), the Company shall, and shall cause its Subsidiaries to, : (A) conduct its and their business respective businesses in the Ordinary Course ordinary course of Business, business in all material respects, respects and (B) use commercially reasonable efforts to (1) preserve substantially intact in its and their present business organization and assets in all material respects; organizations, (2) preserve in all material respects its and their current present relationships with customers, suppliers, their customers and other persons with which they have significant business relations; suppliers and (3) keep and maintain their assets and properties in substantially available the same condition as they exist as services of the date of this Agreement, ordinary wear and tear exceptedkey personnel; provided, that no action by the Company or shall not be obligated to take any of its Subsidiaries with respect to matter specifically addressed action that would not be permitted by Section 6.01(b6.1(b) shall be deemed if the Company has not received the written consent of Parent to be a breach of this Section 6.01(a) unless take such action would constitute a breach of Section 6.01(b)action.
(b) During the Interim Period, except (vi) as set forth in Section 6.01 of the Disclosure Letter; on Schedule 6.1(b), (wii) as required by applicable Law; , (xiii) as otherwise expressly contemplated required by this Agreement or the other Transaction Documents; (yincluding Section 4.22 with respect to Pre-Closing Engagements) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (ziv) with the prior written consent of Buyer Parent (which consent shall not be unreasonably withheld, delayed or conditioned) (provided, however, that Parent shall be deemed to have consented if Parent does not object in writing within ninety-six (96) hours after a written request for such consent is delivered to Parent by the Company), the Company shall not not, and shall cause not permit its Subsidiaries not to:
(i) transferrepurchase, grantredeem or otherwise acquire, issueor enter into any Contracts or commitments to repurchase, sellredeem or otherwise acquire, authorizeany outstanding shares of the capital stock or other securities of, encumber or other ownership interests in, the Company or any of its Subsidiaries (other than (A) in connection with the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to the exercise, vesting or lapse of forfeiture condition of any Company Options or Company Restricted Stock or (B) repurchases from directors, employees or consultants in connection with the termination of their employment or service and prior to the Reference Time);
(ii) issue or sell or otherwise dispose of any Equity Interests shares of capital stock or other securities of the Company or any of its Subsidiaries (except for any issuance of Company Common Stock made pursuant to the exercise or vesting of any Company Options that are outstanding on the date hereof in accordance with its terms) or grant options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom shares of the capital stock or other similar right with respect to, the Company or any of its Subsidiaries;
(ii) effect any recapitalization, or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Equity Interests securities of the Company or any of its Subsidiaries, or make Subsidiaries (except that the Company may grant equity-based awards under the Company Incentive Plan to any other similar change in the capitalization newly hired employee of the Company or any of its SubsidiariesSubsidiaries under the Company Incentive Plan commensurate with his or her position with the Company or such Subsidiary in the ordinary course of business, which will be treated in accordance with Section 3.1 of this Agreement);
(iii) split, combine, subdivide or reclassify any shares of its capital stock or other equity interests;
(iv) authorize or pay any dividends or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, stock or other securities of the Company or its Subsidiaries), except (A) dividends and distributions made by the Company’s Subsidiaries to the Company or a wholly owned Subsidiary of the Company; and (B) (i) cash dividends or cash distributions paid or made by the Company at any time prior to the Closing and (ii) the payment of the Unpaid Dividend Amount or Unpaid Dividend Payments; provided, that any dividends, distributions or portion of the Unpaid Dividend Amount paid or made by the Company following the Reference Time and prior to the Closing shall be reflected in the Estimated Closing Statement as if made prior to the Reference Time;
(v) adopt a plan or agreement of complete or partial liquidation, liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company or any of its Subsidiaries, or effect any of the foregoing;
(iv) amend the Organizational Documents of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise);
(v) make any material change in any method of accounting or accounting practice of the Company or any of its Subsidiaries, except as required by changes in GAAP;
(vi) make any material loans or material advances or capital contributions to, or investments in, any Person (other than the Company and its Subsidiaries), or forgive any Indebtedness for borrowed money, except for advances to employees or officers of the Company or any of its Subsidiaries for expenses incurred in the Ordinary Course of Business;
(vii) merge or consolidate with or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint venture, strategic alliance, or similar Contract;
(viii) amend, waive, modify or consent to the termination of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Business;
(ix) make any capital expenditures or commitments therefor that, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(x) sell, transfer, lease, sublease, mortgage, pledge or otherwise encumber or dispose of any of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business;
(xi) amend, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Business;
(xii) enter into any Contract materially limiting in any way the ability of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business;
(xiii) commence any Proceeding, other than (A) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than intra-company mergers or a dissolution of immaterial Subsidiaries, provided, that such mergers or dissolutions do not materially increase the Tax liabilities of the Company or its Subsidiaries);
(vi) amend the Company Charter Documents or the certificate of incorporation or bylaws (or comparable organizational documents) of any of the Company’s Subsidiaries;
(vii) except as required by any Company Benefit Plan in effect on the date of this Agreement, (A) increase in any material respect the level of compensation payable or to become payable to any Service Provider (except for annual merit, promotion-based or cost of living increases in salaries or wages for non-executive employees in the ordinary course of business), (B) grant any rights to severance, retention, change in control or termination pay to any Service Provider (except for grants under the terms of the Interactive Data Corporation Service Plan for U.S. employees in the ordinary course of business), (C) establish, enter into, adopt, materially amend or terminate any Company Benefit Plan or any plan, program, agreement or arrangement that would be a Company Benefit Plan if in effect on the date hereof (other than to conduct its annual renewal and reenrollment of its health and welfare plans in the ordinary course of business), (D) hire, engage or promote any employee, consultant or individual independent contractor, other than with respect to any employee, consultant or individual independent contractor who has annual base compensation less than $250,000 in the ordinary course of business, (E) take any action to accelerate the vesting, lapsing of restrictions or payment in respect of any award or benefit provided pursuant to any Company Benefit Plan, (F) except as permitted under Section 6.1(b)(ii), grant any material new award to any Service Provider, under a dividend Company Benefit Plan or distribution from any Subsidiary of the Company to the Company otherwise, (G) fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, or (H) terminate the employment of any employee with annual base compensation of $250,000 or more, other than for cause or due to permanent disability;
(viii) make any loan, advance or capital contribution to or investment in any Person (other than (A) loans, advances or capital contributions to or investments in a Subsidiary of the Company, (B) transactions in the ordinary course of business to provide financing to customers in connection with the sale of products and services by the Company or its Subsidiaries and (C) routine advances to employees for business expenses in the ordinary course of business);
(xvix) incur compromise or settle any Indebtedness for borrowed money in excess of $500,000 in the aggregate Legal Proceeding that (A) requires payment to or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall by the Company or any of its Subsidiaries in excess of $2,500,000 individually or $5,000,000 in the aggregate or (B) imposes material restrictions on the business of the Company and its Subsidiaries, except taken as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed moneya whole;
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (Ax) materially increase modify or amend, terminate or intentionally waive any severance or termination pay or grant material rights under any retention bonus or change in control bonus; (B) hire or terminate Material Contract (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course ordinary course of Business); (Dbusiness) or enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise new Contract that would be a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries Material Contract if entered into prior to the date hereof and set forth (in Section 6.1(b)(xv) each case, other than in the ordinary course of the Disclosure Letterbusiness);
(xviixi) enter into or modify any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than a Subsidiary) (other than (A) any transactions contemplated by Contract entered into in the Material Contracts (provided that such Contracts have been made available to Buyer); ordinary course of business on arms’-length terms or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contractsas otherwise expressly permitted by Section 6.1(b)(vii));
(xviiixii) except to the extent required by Law, make (except in the Ordinary Course of Business), or change or revoke any material Tax election, change file any amendment to any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, settle or compromise of any material Tax claim or assessmentliability, or consent agree to any extension or waiver of the limitation period applicable statute of limitations with respect to the assessment or determination of a material amount of Taxes, enter into any closing agreement with respect to any material amount of Taxes, or take any action to surrender any right to claim a material Tax claim refund;
(xiii) except as may be required by Law or assessment GAAP, make any material change in the financial or tax accounting methods, principles or practices of the Company (or change an annual accounting period);
(xiv) incur, redeem, prepay, defease, cancel, or, in any material respect, modify any Indebtedness, other than (A) Indebtedness incurred in the ordinary course of business of the type covered by clause (iv) of the definition thereof, (B) revolving Indebtedness incurred in the ordinary course of business pursuant to the Credit Agreement, (C) incurrence of Indebtedness that does not exceed $25,000,000 in the aggregate (it being understood that the terms of any such Indebtedness so incurred shall permit prepayment upon the Closing Date and shall permit (without triggering any additional rights of the lenders thereunder or additional obligations of the borrowers thereunder) the consummation of the transactions described herein), (D) letters of credit, bankers’ acceptances and similar facilities issued and maintained by the Company or its Subsidiaries in the ordinary course of business and reimbursement obligations in respect thereof (it being understood that the terms of any such Indebtedness so incurred shall permit prepayment upon the Closing Date and shall permit (without triggering any additional rights of the lenders thereunder or additional obligations of the borrowers thereunder) the consummation of the transactions described herein) or (E) prepayments of Indebtedness in the ordinary course of business;
(xv) sell, lease, license, mortgage, or otherwise subject to any Lien (other than pursuant to extensions Permitted Liens) or dispose of time to file Tax Returns obtained in the Ordinary Course of Business)any assets, in each caseproperties or rights (whether tangible or intangible, except as required by Law;
(xixincluding Intellectual Property) settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries with a value or purchase price in the aggregate for such properties, assets or rights in excess of $5,000,000, other than (A) sales, licenses and dispositions of inventory in the ordinary course of business, (B) pursuant to Contracts in force on the date of this Agreement, (C) dispositions of obsolete assets or immaterial or (D) transfers among the Company and its wholly owned Subsidiaries;
(xvi) make any acquisitions of (including by merger, consolidation or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or equity interests therein or any material assets thereof, other than for consideration not to exceed $2,500,000 individually or $5,000,000 in the aggregate;
(xvii) fail to make commercially reasonable efforts to maintain any material Owned Intellectual Property; or
(xviii) agree in writing, resolve by corporate action or otherwise make a binding commitment to take any of the foregoing actions prohibited by Section 6.1(b).
(c) During the Interim Period, except (i) as set forth on Schedule 6.1(c), (ii) as required by applicable Law, (iii) as otherwise expressly required by this Agreement or (iv) with the prior written consent of the Company (which consent shall not be unreasonably withheld) (provided, however, that the Company shall be deemed to have consented if the Company does not include any material findings or admission or wrongdoing by object in writing within ninety-six (96) hours after a written request for such consent is delivered to the Company by Parent), Parent and Merger Sub shall not, and shall cause their respective Subsidiaries not to:
(i) amend the certificate of incorporation or bylaws of Parent;
(ii) other than in the ordinary course of business and except for shares of Parent Common Stock to be issued or delivered pursuant to the Parent Stock Plans or exercise or settlement of equity-based awards granted pursuant to the Parent Stock Plans, issue or sell or otherwise dispose of any shares of capital stock or other securities of Parent or any of its Subsidiaries or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire share capital or any other ownership interest of Parent of any of its Subsidiaries or grant options, warrants, calls or other rights to purchase shares of the capital stock or other securities of Parent or any of its Subsidiaries;
(xxiii) accelerate the collection split, combine, subdivide or reclassify any shares of accounts receivable its capital stock or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Businessother equity interests;
(xxiiv) abandon (A) authorize or permit pay any dividends or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, stock or other securities of Parent or its Subsidiaries) or otherwise make any payments to stockholders of the lapse Parent in their capacity as such (other than Parent’s regular quarterly dividend not to exceed $0.75 per share per quarter) or (B) redeem, repurchase, acquire or otherwise commence an issuer tender offer or exchange offer for any outstanding shares of capital stock or other equity interests of Parent;
(v) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries;
(vi) acquire, sell or dispose of, or agree to acquire, sell or dispose of, any Person or any equity interests thereof or other business organization or division thereof (whether by merger, amalgamation, consolidation or other business combination, sale of assets, sale of share capital, tender offer or exchange offer or similar transaction) that would reasonably be expected to (A) impose any material Intellectual Property rights delay in the obtaining of, or materially increase the risk of not obtaining, any authorization, consent, order, declaration or approval of the Merger, in connection with, or in compliance with, the HSR Act and other Competition Laws, (B) materially delay or materially adversely affect Parent’s ability to obtain debt financing for the transactions contemplated in this Agreement or any alternative to such financing (including adversely affecting Parent’s ability to satisfy the conditions to such financing or any alternative to such financing) on the date on which the Closing would otherwise occur in accordance with Section 2.2, or (C) otherwise delay, prevent or impede the consummation of the Merger and the other transactions contemplated hereby;
(vii) except as may be required by Law or GAAP, make any material intangible asset used change in the operation financial or tax accounting methods, principles or practices of Parent (or change an annual accounting period);
(viii) take any action that is reasonably likely to (x) prevent, delay or impede in any material respect Parent’s or Merger Sub’s ability to obtain debt financing for the transactions contemplated in this Agreement (including adversely affecting Parent’s or Merger Sub’s ability to satisfy the conditions to such financing) on the date on which the Closing would otherwise occur in accordance with Section 2.2 or (y) otherwise prevent, delay or impede in any material respect the consummation of such financing on the date on which Closing would otherwise occur in accordance with Section 2.2;
(ix) take any action that is reasonably likely to prevent, delay or impede the consummation of the business of Merger or the Company or of its Subsidiaries except in the Ordinary Course of Businessother transactions contemplated by this Agreement; or
(xxiix) resolve, commit, enter into any Contract, resolve by corporate action, commitment or otherwise become obligated, arrangement to do anything prohibited by this Section 6.01(b).
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiariesforegoing.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then Parent and Merger Sub acknowledge and agree that: (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to shall give BuyerParent or Merger Sub, directly or indirectly, the right to control or direct Seller’s, the Company’s operations of the Company or any of its Subsidiaries’ businesses. Prior Subsidiaries prior to the Closing, SellerEffective Time and (ii) prior to the Effective Time, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations. The failure of the Company or any of its Subsidiaries to take any actions prohibits by this Section 6.1 shall not be a breach of this Agreement.
(e) Merger Sub agrees that, during the Interim
Appears in 1 contract
Conduct of the Business Pending the Closing. (a) From Prior to the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”)Effective Time, except (i) as set forth in Section 6.01 of the Disclosure Letteron Schedule 8.2(a), (ii) as required by applicable Law, (iii) as expressly contemplated by this Agreement or (including, for the other Transaction Documentsavoidance of doubt, the Restructuring), (iv) subject as reasonably necessary to Section 6.01(d), as enable the Company to avoid or mitigate a result Data Compromise (provided that the Company shall promptly provide notice to Buyer following any use of the COVID-19 Measures exception set forth in this clause (iv)) or (v) with the prior written consent of Buyer Corp (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, :
(Ai) conduct their business the respective businesses of the Company and its Subsidiaries in all respects in the Ordinary Course ordinary course of Businessbusiness consistent with past practice; and
(ii) subject to the restrictions applicable to the Company as set forth in Section 8.2(b) below, in all material respects, and (B) use its commercially reasonable efforts to (1A) preserve substantially intact their the present business organization operations, organization, assets, rights, properties and assets in all material respects; goodwill of the Company and its Subsidiaries, (2B) preserve their current the present relationships with customers, suppliers, customers and other persons with which they have significant business relations; suppliers of the Company and its Subsidiaries and (3C) keep and maintain their assets and properties in substantially available the same condition as they exist as services of the date of this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b)key personnel.
(b) During Prior to the Interim PeriodEffective Time, except (vi) as set forth in Section 6.01 of the Disclosure Letter; on Schedule 8.2(b), (wii) as required by applicable Law; , (xiii) as expressly contemplated by this Agreement or (including, for the other Transaction Documents; (y) subject to Section 6.01(davoidance of doubt, the Restructuring), (iv) as reasonably necessary to enable the Company to avoid or mitigate a result Data Compromise (provided that the Company shall promptly provide notice to Buyer following any use of the COVID-19 Measures; exception set forth in this clause (iv)) or (zv) with the prior written consent of Buyer Corp (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall not not, and shall cause not permit its Subsidiaries not to:
(i) transfer(A) effect any recapitalization, grantreclassification, restructuring or like change in the capitalization of the Company or any of its Subsidiaries; (B) declare, set aside or pay any dividend or other distribution of any kind with respect to its capital stock or other equity securities other than a dividend or distribution payable entirely in cash, (C) redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other equity securities (other than (x) in connection with the withholding of Class C Units to satisfy Tax obligations with respect to the exercise of any Company Options or (y) repurchases from directors, employees or consultants in connection with the termination of their employment or service), or (D) issue, sell, authorizesplit, combine, reclassify, encumber or dispose of any Equity Interests Units, shares of capital stock or other equity securities of the Company or any of its Subsidiaries (except for any issuance made pursuant to the exercise or vesting of any Company Options outstanding as of the date hereof) or grant options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests ofUnits, or any stock appreciation, phantom shares of the capital stock or other similar right with respect to, equity securities of the Company or any of its Subsidiaries;
(ii) effect any recapitalization, or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any amend the Organizational Documents of the Equity Interests Company or its Subsidiaries;
(iii) except as required by the terms of any Company Benefit Plan as in effect on the date of this Agreement, the terms of this Agreement or any applicable Law, (A) increase the level of compensation payable or to become payable to any Service Provider (except for increases in annual base salaries or wage rate for employees other than executive officers of the Company or any of its SubsidiariesSubsidiaries that are in connection with promotions in the ordinary course of business consistent with past practice and do not exceed (x) 10% for any employee and (y) $100,000 in the aggregate on an annualized basis), or make (B) grant any other similar additional rights to change in control, severance or termination pay to any Service Provider (except for the capitalization payment of cash severance or termination pay in the ordinary course of business for employees other than executive officers of the Company or any of its SubsidiariesSubsidiaries consistent with the cash severance level described on Schedule 8.10(a) (and contingent upon an effective release of claims in favor of the Company), with any such cash severance or termination pay to be satisfied in full prior to the Closing Date so that there are no continuing obligations to be satisfied following the Closing Date), (C) establish, enter into, adopt, modify or amend any Company Benefit Plan or any plan, program, policy, practice, contract, agreement or other arrangement that would be a Company Benefit Plan if in effect on the date of this Agreement (other than (x) to replace or amend any Company Benefit Plan if the cost of providing benefits thereunder is not increased, (y) to conduct its annual renewal and reenrollment of its health and welfare plans in the ordinary course of business) or (z) to approve performance metrics under its annual bonus plans for the current fiscal year of the Company consistent with Schedule 8.2(b)(iii)), (D) grant or pay to any Service Provider or former Service Provider any bonus or other incentive compensation or retention compensation, or (E) terminate, other than for cause or due to permanent disability, or hire, any employee who has an annual base compensation greater than $150,000;
(iiiiv) acquire any Person or any division or business of any Person or any material assets from another Person or sell, assign, transfer, convey or otherwise dispose of any Subsidiary, division or business of the Company or any of its Subsidiaries or incorporate or otherwise create any new Subsidiary or sell, assign, transfer, convey or pledge any material assets;
(v) merge with or into or consolidate with any other Person; adopt a plan of complete or partial liquidation or resolutions providing for or authorizing a liquidation, dissolution, merger, consolidation, restructuring, recapitalization recapitalization, or other reorganization with respect to the Company reorganization; or any of its Subsidiaries, liquidate or effect any of the foregoing;
(iv) amend the Organizational Documents of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise);
(v) make any material change in any method of accounting or accounting practice of the Company or any of its Subsidiaries, except as required by changes in GAAPdissolve;
(vi) make any material loans or material advances loan, advance or capital contributions to, contribution to or investments in, investment in any Person (other than (A) loans, advances or capital contributions to or investments in a Subsidiary of the Company and its Subsidiaries), or forgive any Indebtedness for borrowed money, except for (B) routine advances to employees or officers of the Company or any of its Subsidiaries for travel expenses incurred and/or sales commissions in the Ordinary Course ordinary course of Businessbusiness consistent with past practice) or incur any Indebtedness (other than revolving borrowings in the ordinary course of business pursuant to the Senior Secured Credit Facilities or Intercompany Indebtedness);
(vii) merge compromise, waive or consolidate with settle any claim or acquire Legal Proceeding (other than any corporationTax matters which are exclusively covered by Section 8.2(b)(x)), partnership, limited liability company, other business organization or division thereof or provided that the Company and any material amount of assets, or its Subsidiaries may enter into such compromises or settlements involving solely monetary damages of an amount not in excess of $1,000,000 in the aggregate (with any joint venture, strategic alliance, such settlements being paid prior to 11:59 p.m. (New York time) on the Business Day immediately preceding the Closing or similar Contractotherwise being a Specified Current Liability) following consultation with Buyer;
(viii) amendenter into, waive, materially modify or consent terminate any labor or collective bargaining agreement or, through negotiations or otherwise, make any commitment or incur any material Liability to the termination of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Businesslabor organizations;
(ix) make enter into or modify any capital expenditures or commitments therefor that, individually or in the aggregate, deviate from the annual capital expenditures budget for Contract with any Affiliate of the Company and its Subsidiaries made available to Buyer (other than a Subsidiary), other than as otherwise permitted by more than $3,000,000Section 8.2(b)(iii);
(x) sellmake, transferchange or rescind any election relating to Taxes, leasechange any method of Tax accounting in respect of Taxes, subleasefile any amended Tax Return in respect of Taxes, mortgageor settle or compromise any proceeding, pledge claim, investigation, audit or otherwise encumber or dispose of any of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Businesscontroversy relating to Taxes;
(xi) amendexcept to the extent required by changes in GAAP, extend, renew, terminate make any change to any of its methods of accounting or enter into any lease methods of real reporting revenue and expenses or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Businessaccounting practices;
(xii) enter into any Contract materially limiting in any way the ability of the Company joint venture or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Businesssimilar agreement;
(xiii) commence encumber or grant any Proceeding, Lien (other than Permitted Liens) on any asset, right or property (Awhether tangible or intangible) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than purchase money security interests in connection with the acquisition of equipment in the ordinary course of business consistent with past practice); or
(A) other than in the ordinary course of business consistent with past practice, amend, terminate or waive any rights under any Material Contract in any material respect or enter into any new Contract that would be a Material Contract if entered into prior to the date hereof or (B) enter into any new Contract that contains a dividend or distribution from any Subsidiary change in control provision in favor of the Company other party or parties thereto or would otherwise require a payment to or give rise to any rights to such other party or parties in connection with the Company or any other Subsidiary of the Company)Transactions contemplated hereby;
(xv) incur enter into any Indebtedness for borrowed money in excess new line of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed moneybusiness;
(xvi) except fail to use commercially reasonable efforts to maintain in full force and effect insurance policies providing coverage and amounts of coverage substantially comparable to that provided by the insurance policies as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of on the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries day prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letterthis Agreement;
(xvii) enter into except in the ordinary course of business consistent with past practice, guarantee or otherwise become liable or responsible for any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses Liability of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate ContractsPerson;
(xviii) make (except or incur any capital expenditures requiring payments in excess of $2,500,000 in the Ordinary Course of Businessaggregate (with any such payments being paid prior to 11:59 p.m. (New York time) on the Business Day immediately preceding the Closing or otherwise being a Specified Current Liability), change ; or revoke any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law;
(xix) settle agree, authorize or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business;
(xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of Business; or
(xxii) resolve, commit, enter into any Contract, or otherwise become obligated, commit to do anything prohibited by this Section 6.01(b8.2(b).
. Buyer acknowledges and agrees that: (ca) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiaries.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to shall give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s operations of Company or any of its Subsidiaries’ businesses. Prior Company Subsidiaries prior to the ClosingEffective Time and (b) prior to the Effective Time, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their its and its Subsidiaries’ respective businesses and operations.
Appears in 1 contract
Sources: Transaction Agreement (Vantiv, Inc.)
Conduct of the Business Pending the Closing. (a) From Prior to the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”)Closing, except (i) as set forth in Section 6.01 of the Disclosure Letteron Schedule 7.3(a), (ii) as required by applicable LawLaw (including COVID-19 Measures) or Contract to which the Company or its Subsidiaries is bound, (iii) as expressly otherwise contemplated by this Agreement or any of the other Transaction Company Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (v) with the prior written consent of Buyer Purchaser (which such consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed; provided, that the consent of Purchaser shall be deemed to have been given if Purchaser does not object in writing within five (5) Business Days from the date on which written request for such consent is provided by the Company to Purchaser), the Company shallshall use its commercially reasonable efforts to conduct, and shall cause its Subsidiaries toto conduct, (A) conduct in all material respects, their business respective businesses in the Ordinary Course of Business, in all material respects, and (B) use commercially reasonable efforts to (1) preserve substantially intact their business organization and assets in all material respects; (2) preserve their current relationships with customers, suppliers, and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially the same condition as they exist as of the date of this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b).
(b) During the Interim Period, except Other than (vi) as set forth in Section 6.01 of the Disclosure Letter; on Schedule 7.3(b), (wii) as required by applicable Law; Law (xincluding COVID-19 Measures), (iii) as expressly otherwise contemplated or permitted by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result any of the COVID-19 Measures; Company Documents, or (ziv) with the prior written consent of Buyer Purchaser (which such consent shall not to be unreasonably withheld, delayed conditioned or conditioneddelayed; provided, that the consent of Purchaser shall be deemed to have been given if Purchaser does not object in writing within five (5) Business Days from the date on which written request for such consent is provided by the Company to Purchaser), the Company shall not not, and shall cause not permit its Subsidiaries not to:
(i) transfer, grant, issue, sell, authorize, encumber transfer or dispose issue to any Person (other than the Company or another of its Subsidiaries) any Equity Interests of any of the Company’s Subsidiaries or issue any Equity Interests of the Company or any of its Subsidiaries or any options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom stock or other similar right with respect to, the Company or any of its SubsidiariesCompany;
(ii) effect amend in any recapitalizationmaterial respect the certificate of incorporation, bylaws or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Equity Interests of the Company or any of its Subsidiaries, or make any other similar change in the capitalization comparable organizational documents of the Company or any of its Subsidiaries;
(iii) adopt a plan except (A) pursuant to any Contract or Plan or Benefit Program existing on the date hereof, (B) in the Ordinary Course of complete Business or partial liquidation(C) as would otherwise be included in the calculation of Transaction Expenses, dissolution, merger, consolidation, restructuring, recapitalization materially increase the amount of any bonus or other reorganization with respect salary to any employee of the Company or any of its Subsidiaries, or effect enter into any of employment or severance agreement (other than “at-will” offer letters or employment agreements that may be terminated on thirty (30) days’ or less notice without severance) with any such employee with annual base compensation exceeding $200,000, or materially increase the foregoingbenefits under any material Plan or Benefit Program;
(iv) amend the Organizational Documents enter into any commitment for capital expenditures of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise)to be made following the Closing in excess of the aggregate amount set forth in the budget of the Company and its Subsidiaries for such portion of the applicable fiscal year;
(v) make (A) sell, assign, license, transfer, convey or otherwise dispose of any material change in any method of accounting or accounting practice of the Company material properties or any of its Subsidiaries, except as required by changes in GAAP;
(vi) make any material loans or material advances or capital contributions to, or investments in, any Person assets (other than Intellectual Property) of the Company and its Subsidiaries)Subsidiaries with a value in excess of $500,000 individually or (B) sell, assign, license, transfer, convey or forgive any Indebtedness for borrowed money, except for advances to employees or officers otherwise dispose of the Company or any of its Subsidiaries for expenses incurred in the Ordinary Course of Business;
(vii) merge or consolidate with or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint venture, strategic alliance, or similar Contract;
(viii) amend, waive, modify or consent to the termination of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any ContractCompany Intellectual Property, in each case case, other than in the Ordinary Course of Business;
(ixvi) make change its present accounting methods or principles in any capital expenditures material respect, except as required by GAAP or commitments therefor that, individually or in by the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000Company’s auditors;
(xvii) sell, transfer, lease, sublease, mortgage, pledge or otherwise encumber or dispose of any of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business;
(xi) amend, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Business;
(xii) enter into any Contract materially limiting in any way the ability of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business;
(xiii) commence any Proceeding, other than (A) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company);
(xv) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed money;
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter;
(xvii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts;
(xviii) make (except in the Ordinary Course of Business)make, change or revoke any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, (B) settle or compromise of any material Tax claim or assessmentliability, or consent to any extension or waiver of the limitation period applicable to (C) change any material method of accounting or annual accounting period for Tax purposes, (D) surrender any claim for a refund of a material amount of Taxes or assessment (E) waive or extend the statute of limitations in respect of any amount of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business); or
(viii) enter into or agree to enter into any merger or consolidation with any Person, or acquire the securities of any other Person, except, in each case, except as required by Law;for transactions involving only the Company and/or any of its Subsidiaries.
(xixc) settle Notwithstanding anything contained in this Agreement to the contrary, the Company and its Subsidiaries shall be permitted to (i) operate the business of the Company and its Subsidiaries in the Ordinary Course of Business, (ii) take (or offer not take) actions reasonably and in good faith to settle respond to any pending extraordinary event that was not reasonably foreseeable as of the date of this Agreement and occurring after the date of this Agreement that is outside the control of the Company or threatened Proceeding involving its Affiliates, to the extent such actions taken (or not taken) are substantially consistent with those taken (or not taken) by other industry participants operating in the business of the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to (iii) maintain through the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on Date the conduct cash management systems of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate , maintain the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business;
(xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of Business; or
(xxii) resolve, commit, enter into any Contract, or otherwise become obligated, to do anything prohibited cash management procedures as currently conducted by this Section 6.01(b).
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use and periodically settle intercompany balances consistent with past practices (including through dividends and capital contributions) and (iv) (A) dividend all or any portion of cash or cash equivalents Cash and Cash Equivalents of the Company and its Subsidiaries to Seller or (iB) repay any outstanding indebtedness under the or satisfy Company Credit Agreement; Debt or (ii) declare and pay cash dividends with respect to the Equity Interests Transaction Expenses of the Company and its Subsidiaries, in either case, prior to the Measurement Time.
(d) If Seller Nothing contained in this Agreement shall give Purchaser, directly or indirectly, rights to control or direct the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views operations of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to before the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with Closing Date. Before the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, SellerClosing Date, the Company and its Subsidiaries shall exerciseshall, consistent with the terms and conditions of this Agreement, exercise complete control and supervision over their respective businesses the operations of the Company and operationsits Subsidiaries. If the Company desires to take an action which would be prohibited pursuant to this Section 7.3 without the written consent of Purchaser, prior to taking such action the Company may request such written consent by sending an e-mail to all of the individuals set forth on Annex 1. Any of the individuals set forth on Annex 1 may grant consent on behalf of Purchaser to the taking of any action that would otherwise be prohibited pursuant to this Section 7.3 by e-mail or such other notice that complies with the provisions of Section 13.6.
Appears in 1 contract
Conduct of the Business Pending the Closing. (a) From the date hereof through until the earlier of the Closing or the termination of this Agreement (the “Interim Period”)Closing, except (iw) as set forth in Section 6.01 of the Disclosure Letteron Schedule 6.2, (iix) as required by applicable Law, (iiiy) as expressly otherwise specifically contemplated by this Agreement or the other Transaction Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (v) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries to, (A) conduct their business in the Ordinary Course of Business, in all material respects, and (B) use commercially reasonable efforts to (1) preserve substantially intact their business organization and assets in all material respects; (2) preserve their current relationships with customers, suppliers, and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially the same condition as they exist as of the date of this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b).
(b) During the Interim Period, except (v) as set forth in Section 6.01 of the Disclosure Letter; (w) as required by applicable Law; (x) as expressly contemplated by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (z) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), the Seller shall cause the Company and each of the Company Subsidiaries to conduct the Business only in the Ordinary Course of Business and, to that end, use its commercially reasonable efforts:
(i) to preserve the present business organization, operations and material assets of the Company and the Company Subsidiaries (including to maintain, enforce and protect the Owned Intellectual Property and the Company’s or any Company Subsidiary’s rights in the Licensed Intellectual Property);
(ii) keep available the services of its and their respective directors, officers and key employees (provided that this obligation shall not be interpreted to require any increase in the compensation level of such Persons or that the Company or any Company Subsidiary avoid enforcement of its respective employee policies); and
(iii) maintain intact relationships with its customers, lenders, suppliers and others having material business relationships with it.
(b) Without limiting the generality of the foregoing, from the date hereof until the Closing, except (w) as set forth on Schedule 6.2, (x) as required by applicable Law, (y) as otherwise expressly required by this Agreement or (z) with the prior written consent of Buyer (which consent shall not be unreasonably withheld), the Seller shall cause its the Company and the Company Subsidiaries not to:
(i) transfer, grant, issue, sell, authorize, encumber or dispose of any Equity Interests of the Company or any of its Subsidiaries or any options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom stock or other similar right with respect to, the Company or any of its Subsidiaries;
(ii) effect any split, combination, recapitalization, reclassification or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Equity Interests of the Company or any of its Subsidiaries, or make any other similar like change in the capitalization of the Company or any Company Subsidiary;
(ii) set aside, declare or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of the Company Interests or any of the Company Subsidiaries Interests, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any Company Interests or Company Subsidiaries Interests, except for dividends or distributions by any Company Subsidiary to the Company and distributions by the Company to Seller, and provided that prior to Closing Seller shall cause the Company to transfer or distribute the ownership interests of Excluded Subsidiaries to Seller or its Affiliate (other than the Company Subsidiaries);
(iii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company or any of its Subsidiaries, or effect any of the foregoing;
(iv) amend the Organizational Fundamental Documents of the Company or any of its Subsidiaries Company Subsidiary (whether by merger, consolidation or otherwise);
(viv) make other than (A) as required by an existing Benefit Plan or Contract, (B) annual employee performance bonuses accrued by the Company at the end of the calendar year and paid to employees in February of the following year, or (C) the Change in Control Payments to be paid to certain Employees as a result solely of the consummation of the sale of the Company Interests contemplated by this Agreement, (1) materially increase the annual level of compensation of any material change in any method of accounting or accounting practice Employee of the Company or any of its SubsidiariesCompany Subsidiary, except as required by changes in GAAP;
(vi2) make grant any material loans unusual or material advances or capital contributions to, or investments in, extraordinary bonus to any Person (other than the Company and its Subsidiaries), or forgive any Indebtedness for borrowed money, except for advances to employees or officers Employee of the Company or any of its Subsidiaries for expenses incurred Company Subsidiary, or (3) materially amend or adopt any Benefit Plan;
(v) incur any capital expenditures or any obligations or liabilities in respect thereof, other than in the Ordinary Course of Business;
(vi) other than in the Ordinary Course of Business, become subject to, create or impose any Lien upon, any of the properties or assets (whether tangible or intangible) of the Company or any Company Subsidiary (including any Owned Intellectual Property or Licensed Intellectual Property), except for Permitted Exceptions;
(vii) merge enter into or consolidate with or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or agree to enter into any joint venturemerger, strategic allianceacquisition of stock or assets or consolidation of the Company or any Company Subsidiary with any Person, issue, deliver or sell any ownership interests in the Company or any Company Subsidiary, sell any assets of the Company or any Company Subsidiary (including any Owned Intellectual Property) other than in the Ordinary Course of Business, or similar Contractacquire the securities or a substantial portion of the assets of any Person;
(viii) amendcreate, waiveincur, modify assume or consent otherwise become liable with respect to the termination of any Material Contract or Insurance PolicyIndebtedness, or amendcause any Company Subsidiary to incur any Indebtedness, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Business;
(ix) make any loans, advances or capital expenditures contributions to, or commitments therefor thatinvestments in, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000any other Person;
(x) sell, transfer, lease, sublease, mortgage, pledge license or otherwise encumber dispose of, abandon or dispose of permit to lapse, or fail to take any of the properties or action necessary to maintain any assets of the Company and its Subsidiaries, except for sales or disposals of property any Company Subsidiary (including Owned Intellectual Property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory Licensed Intellectual Property) other than in the Ordinary Course of Business;
(xi) amendadopt a plan or agreement of complete or partial liquidation, extenddissolution, renewrestructuring, terminate or enter into any lease other reorganization of real or personal property the Company or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of BusinessCompany Subsidiaries;
(xii) enter into any Contract materially limiting in any way the ability of the Company or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, Interested Party;
(xiii) enter into (other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business;
(xiii) commence any Proceeding, and other than (A) any Contract that seeks to limit or restrict in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to any material respect the Company and or any Company Subsidiary, Buyer or any of its Subsidiaries; respective Affiliates, from engaging or (C) counterclaimscompeting in any line of business, motions for declaratory judgment in any location or other Proceedings that are defensive with any Person), amend or modify in natureany material respect or terminate any Material Contract or otherwise waive, release or assign any material rights, claims or benefits of the Company or any Company Subsidiary thereunder;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of change the Company or any Company Subsidiary’s methods of accounting, except as required by concurrent changes in GAAP, as agreed to by its Subsidiaries (other than with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company)independent public accountants;
(xv) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorsesettle, or otherwise become responsible foroffer or propose to settle, the obligations of (i) any Person, except in the Ordinary Course of Business Legal Proceeding involving or under the Company Credit Agreement; provided, that in no event shall against the Company or any of its SubsidiariesCompany Subsidiary, except as provided in Section 6.01(c), make or (ii) any optional repayment of any indebtedness for borrowed money;Legal Proceeding that relates to the transactions contemplated hereby; or
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase authorize any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increaseof, or announce commit or promise a material increase inagree to do, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter;
(xvii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts;
(xviii) make (except in the Ordinary Course of Business), change or revoke any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law;
(xix) settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business;
(xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of Business; or
(xxii) resolve, commit, enter into any Contract, or otherwise become obligated, to do anything prohibited by this Section 6.01(b6.2(b).
(c) Notwithstanding From the foregoing provisions of this Section 6.01date hereof until the Closing, Seller shall cause the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents each of the Company and its Subsidiaries to continue to make any matching payments required to be made to employees for calendar year 2015 under its 401(k) savings plan. Seller shall also terminate any Company employees from its 401(k) savings plan as of the Closing Date (i) repay and accelerate their vesting of any outstanding indebtedness under contributions), and cause the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests each of the Company and its SubsidiariesSubsidiaries to cease to be a participating company in such 401(k) plan.
(d) If Seller or shall cause the Company determines and each of the Company Subsidiaries to take any action or refrain from taking any action accelerate all Change in accordance with Sections 6.01(a)(iv) or 6.01(b)(y)Control Payments that otherwise would be payable after Closing and pay all amounts due as Change in Control Payments, then including the accelerated portions, at Closing. Seller shall also cause the Company and each of the Company Subsidiaries to pay, prior to Closing (i) prior to so doing, to the extent reasonably practicable all employee performance bonuses for calendar year 2015 earned by any Employee and permitted (ii) all earned sales commissions for calendar year 2015 earned by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
Employee (e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operationsother individual).
Appears in 1 contract
Conduct of the Business Pending the Closing. (a) From During the period from the date hereof through the earlier of the Closing or the termination of this Agreement (and continuing until the “Interim Period”)Closing, except (i) as set forth in Section 6.01 each of the Disclosure LetterStockholder and the Company agrees, (ii) as required by applicable Law, (iii) as expressly contemplated by this Agreement or that neither the other Transaction Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (v) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), Stockholder nor the Company shall, and shall cause its the Company Subsidiaries not to, (A) conduct their engage in any business whatsoever other than in connection with the Ordinary Course of Business, in all material respects, and (B) use commercially reasonable efforts to (1) preserve substantially intact their business organization and assets in all material respects; (2) preserve their current relationships with customers, suppliers, and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially the same condition as they exist as consummation of the date of transactions contemplated by this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b).
(b) During the Interim Periodperiod from the date of this Agreement and continuing until the Closing, except (v) as set forth in Section 6.01 each of the Disclosure Letter; (w) Stockholder and the Company agrees as required by applicable Law; (x) to itself and, with respect to the Company, the Company Subsidiaries, that except as expressly contemplated or permitted by this Agreement Agreement, or to the extent that the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (z) with the prior written party shall otherwise consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall not and shall cause its Subsidiaries not toin writing:
(i) transfer, grant, issue, sell, authorize, encumber It shall not amend or dispose propose to amend its certificate of any Equity Interests of the Company incorporation or any of its Subsidiaries by-laws or any options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom stock or other similar right with respect to, the Company or any of its Subsidiaries;equivalent organizational documents except as contemplated in this Agreement.
(ii) effect It shall not, nor in the case of the Company shall it permit the Company Subsidiaries to, issue, deliver, sell, redeem, acquire, authorize or propose to issue, deliver, sell, redeem, acquire or authorize, any recapitalizationshares of its capital stock of any class or any securities convertible into, or any rights, warrants or options to acquire, any such shares or convertible securities or other ownership interest and, in the case of the Stockholder, shall not sell or otherwise transfer the Shares, provided that the Company shall be permitted to issue the shares of its Common Stock to be issued to the stockholders of CSA.
(iii) It shall not, nor in the case of the Company shall it permit any of the Company Subsidiaries to, nor shall it propose to: (i) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or (ii) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Equity Interests of the Company or any of its Subsidiaries, or make any other similar change in the capitalization of the Company or any of its Subsidiaries;
(iii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company or any of its Subsidiaries, or effect any of the foregoing;capital stock.
(iv) amend the Organizational Documents of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise);
(v) make any material change in any method of accounting or accounting practice of the Company or any of its Subsidiaries, except as required by changes in GAAP;
(vi) make any material loans or material advances or capital contributions to, or investments in, any Person (other Other than the Company and its Subsidiaries), or forgive any Indebtedness for borrowed money, except for advances to employees or officers of the Company or any of its Subsidiaries for expenses incurred dispositions in the Ordinary Course ordinary course of Business;
(vii) merge or consolidate business consistent with or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint venture, strategic alliance, or similar Contract;
(viii) amend, waive, modify or consent to the termination of any past practice which would not cause a Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Business;
(ix) make any capital expenditures or commitments therefor thatAdverse Effect, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company to it and its Subsidiaries made available to Buyer by more than $3,000,000;
(x) subsidiaries, taken as a whole, it shall not, nor shall it permit any of its subsidiaries to, sell, transfer, lease, sublease, mortgage, pledge encumber or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber or otherwise dispose of its assets, excluding lien foreclosures on assets by creditors.
(v) It shall promptly advise the other party hereto in writing of any of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or change in the aggregatecondition (financial or otherwise), and for sales operations or transfers properties, businesses or business prospects of inventory in the Ordinary Course of Business;
(xi) amend, extend, renew, terminate or enter into any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of Business;
(xii) enter into any Contract materially limiting in any way the ability of the Company such party or any of its Subsidiaries to conduct business or compete with any Person subsidiaries which would result in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements in the Ordinary Course of Business;a Material Adverse Effect.
(xiiivi) commence It shall not permit to occur any Proceeding(1) change in accounting principles, methods or practices, investment practices, claims, payment and processing practices or policies regarding intercompany transactions and (2) incurrence of Indebtedness or any commitment to incur Indebtedness, any incurrence of a contingent liability, Contingent Obligation or other than liability of any type.
(Avii) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to It shall not, and the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay shall not permit any dividend or other distribution of assets in respect of any Equity Interests of the Company Subsidiaries to, take or agree or commit to take any action, (i) that is reasonably likely to make any of its Subsidiaries (other than with respect to a dividend representations or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company);
(xv) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed money;
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter;
(xvii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts;
(xviii) make (except in the Ordinary Course of Business), change or revoke any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law;
(xix) settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business;
(xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of Business; or
(xxii) resolve, commit, enter into any Contract, or otherwise become obligated, to do anything prohibited by this Section 6.01(b).
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreementwarranties hereunder inaccurate; or (ii) declare and pay cash dividends with respect that is prohibited pursuant to the Equity Interests provisions of the Company and its Subsidiariesthis Article VI.
(dviii) If Seller or the Company determines to take It shall obtain releases of any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y)claim whatsoever, then (i) prior to so doingincluding compensation claims, to the extent reasonably practicable and permitted by applicable Lawall officers, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s directors and the Company’s and its Subsidiaries’ response theretoEstate of ▇▇▇▇▇▇▇ ▇▇▇▇▇.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 1 contract
Conduct of the Business Pending the Closing. Except (a) From the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”), except (i) as set forth in Section 6.01 of the Disclosure Letter, (iiA) as required by applicable Law, (iiiB) as expressly otherwise contemplated by this Agreement or the other Transaction DocumentsAgreement, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (vC) with the prior written consent of Buyer the Purchaser (which consent shall not may be unreasonably withheld, delayed or conditioned), ):
(a) the Company shall, and shall cause its Subsidiaries to, from the date hereof prior to the Closing Date:
(Ai) conduct their business its respective businesses in the Ordinary Course of Business, in Business including the maintenance of all material respects, and records;
(Bii) use commercially reasonable its best efforts to preserve the present operations and goodwill of its business;
(1iii) preserve substantially intact their business organization and assets in all confer with Purchaser prior to implementing operation decisions of a material respects; nature;
(2iv) preserve their current relationships with customers, suppliers, and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially report to Purchaser at such times as Purchaser may reasonably request concerning the same condition as they exist as status of the date of this Agreement, ordinary wear and tear excepted; provided, that no action Company;
(v) maintain the assets owned or used by the Company in a state of repair and conditions that complies with the Company’s Contracts and is consistent with the requirements and normal conduct of the Company;
(vi) comply with all Contracts of the Company;
(vii) continue in full force and effect all insurance coverage of the Company; and
(viii) take no action, or fail to take any reasonable action within its control, as a result of which any of its Subsidiaries with respect the changes or events listed in Section 4.9 would be likely to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b)occur.
(b) During the Interim Period, except (v) as set forth in Section 6.01 of the Disclosure Letter; (w) as required by applicable Law; (x) as expressly contemplated by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (z) with the prior written consent of Buyer (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall not and shall cause its Subsidiaries not tonot, from the date hereof prior to the Closing Date:
(i) transfer, grant, issue, sell, authorize, encumber or dispose of any Equity Interests of the Company or amend any of its Subsidiaries or any options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom stock or other similar right with respect to, the Company or any of its Subsidiariesorganizational documents;
(ii) effect declare, set aside or pay any recapitalization, or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Equity Interests of the Company or any of its Subsidiaries, dividend or make any other similar change distribution in the capitalization respect of any shares of capital stock (or other equity interest) of the Company or any of its SubsidiariesCompany;
(iii) adopt a plan repurchase, redeem or acquire any outstanding shares of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization capital stock (or other reorganization with respect to the Company equity interest) or any of its Subsidiariesother securities of, or effect any of other ownership interest in, the foregoingCompany;
(iv) amend the Organizational Documents award or pay any bonuses to any physicians who provide services, professional or otherwise, on behalf of the Company (collectively, “Physicians”) or any persons (other than Physicians) who are employees, independent contractors or consultants of its Subsidiaries the Business as of the date hereof (whether by mergercollectively, consolidation or otherwisethe “Business Employees”), ;
(v) make enter into any material change in employment, deferred compensation, severance or similar agreement (nor amended any method of accounting such agreement) or accounting practice agree to increase the compensation payable or to become payable by it to any of the Company’s directors, officers, employees, agents or representatives or agree to increase the coverage or benefits available under the Company or any of its Subsidiaries, except Benefit Plan (as required by changes defined in GAAPSection 4.12(a));
(vi) change its accounting or Tax reporting principles, methods or policies;
(vii) make or rescind any election relating to Taxes, settled or compromised any claim relating to Taxes;
(viii) fail to promptly pay and discharge current Liabilities except where disputed in good faith by appropriate proceedings;
(ix) make any material loans or material loans, advances or capital contributions to, or investments in, any Person (other than the Company and its Subsidiaries)or paid any fees or expenses to any director, officer, partner, stockholder or forgive any Indebtedness for borrowed money, except for advances to employees or officers of the Company or any of its Subsidiaries for expenses incurred in the Ordinary Course of Business;
(vii) merge or consolidate with or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of assets, or enter into any joint venture, strategic alliance, or similar Contract;
(viii) amend, waive, modify or consent to the termination of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Business;
(ix) make any capital expenditures or commitments therefor that, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000Affiliate;
(x) sell, transfer, lease, sublease, mortgage, pledge or otherwise encumber or dispose of subject to any Lien any of the its assets, properties or assets of rights relating to the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of Business;
(xi) amendterminate, extend, renew, terminate or enter into or amend any lease of real or personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of BusinessMaterial Contract;
(xii) enter into make or commit to make any Contract materially limiting capital expenditures in any way the ability excess of the Company $10,000 individually or any of its Subsidiaries to conduct business or compete with any Person in any particular geographic location or line of business, other than the entry into teaming and exclusivity agreements $25,000 in the Ordinary Course of Businessaggregate;
(xiii) commence issue, create, incur, assume or guarantee any Proceeding, other than (A) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in natureIndebtedness;
(xiv) declare, issue, make suffer any material change in the productivity or pay any dividend or other distribution of assets in respect of any Equity Interests compensation of the Company or any of its Subsidiaries (other than with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company)Physicians;
(xv) incur institute or settle any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed moneyLegal Proceeding without Purchaser’s written consent;
(xvi) except as otherwise required by this Agreementborrow any amount, applicable Lawtake out any Loans, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase guarantee any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment Loans of any employee whose annual base salary exceeds $250,000 Person or any executive officer; (C) adopt, enter into, materially amend become the transferee or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter;
(xvii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses assignee of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts;
(xviii) make (except in the Ordinary Course of Business), change or revoke any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law;
(xix) settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business;
(xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of BusinessLoans; or
(xxiixvi) resolveagree, commit, arrange or enter into any Contract, or otherwise become obligated, agreement to do anything prohibited by this Section 6.01(b).
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiariesforegoing.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 1 contract
Sources: Stock Purchase Agreement (Apollo Medical Holdings, Inc.)
Conduct of the Business Pending the Closing. (a) From Prior to the date hereof through the earlier of the Closing or the termination of this Agreement (the “Interim Period”)Closing, except (i) as set forth in Section 6.01 of the Disclosure Letter, (iiI) as required by applicable Law, (iiiII) as expressly otherwise contemplated by this Agreement or the other Transaction Documents, (iv) subject to Section 6.01(d), as a result of the COVID-19 Measures or (vIII) with the prior written consent of Buyer Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause :
(i) conduct the businesses of the Company only in the Ordinary Course of Business;
(ii) use its Subsidiaries to, commercially reasonable efforts to (A) conduct their preserve the present business operations, organization and goodwill of the Company, and (B) preserve the present relationships with customers and suppliers of the Company;
(iii) maintain (A) all of the assets and properties of, or used by, the Company in its current condition, ordinary wear and tear excepted, and (B) insurance upon all of the properties and assets of the Company in such amounts and of such kinds comparable to that in effect on the date of this Agreement;
(iv) (A) maintain the books, accounts and records of the Company in the Ordinary Course of Business, (B) continue to collect accounts receivable and pay accounts payable utilizing normal procedures and without discounting or accelerating payment of such accounts, and (C) comply with all contractual and other obligations of the Company;
(v) comply with the capital expenditure plan of the Company for 2007, including making such capital expenditures in the amounts and at the times set forth in such plan; and
(vi) comply in all material respects, and (B) use commercially reasonable efforts to (1) preserve substantially intact their business organization and assets in respects with all material respects; (2) preserve their current relationships with customers, suppliers, and other persons with which they have significant business relations; and (3) keep and maintain their assets and properties in substantially the same condition as they exist as of the date of this Agreement, ordinary wear and tear excepted; provided, that no action by the Company or any of its Subsidiaries with respect to matter specifically addressed by Section 6.01(b) shall be deemed to be a breach of this Section 6.01(a) unless such action would constitute a breach of Section 6.01(b)applicable Laws.
(b) During the Interim Period, except Except (v) as set forth in Section 6.01 of the Disclosure Letter; (wI) as required by applicable Law; , (xII) as expressly otherwise contemplated by this Agreement or the other Transaction Documents; (y) subject to Section 6.01(d), as a result of the COVID-19 Measures; or (zIII) with the prior written consent of Buyer Purchaser (which consent shall not be unreasonably withheld, delayed or conditioned), the Company shall not and shall cause its Subsidiaries not tonot:
(i) declare, set aside, make or pay any dividend or other distribution in respect of the capital stock of the Company or repurchase, redeem or otherwise acquire any outstanding shares of the capital stock or other securities of, or other ownership interests in, the Company;
(ii) transfer, grant, issue, sell, authorize, encumber sell or dispose of any Equity Interests shares of capital stock or other securities of the Company or any of its Subsidiaries or any grant options, warrants, convertible securities calls or other rights to purchase or otherwise acquire Equity Interests of, or any stock appreciation, phantom shares of the capital stock or other similar right with respect to, securities of the Company or any of its SubsidiariesCompany;
(iiiii) effect any recapitalization, reclassification or otherwise reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Equity Interests of the Company or any of its Subsidiaries, or make any other similar like change in the capitalization of the Company or any of its Subsidiaries;
(iii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization with respect to the Company or any of its Subsidiaries, or effect any of the foregoingCompany;
(iv) amend the Organizational Documents certificate of incorporation or by-laws or comparable organizational documents of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise)Company;
(v) make other than in the Ordinary Course of Business or as required by Law or Contract, (A) materially increase the annual level of compensation of any material change in any method of accounting director or accounting practice executive officer of the Company, (B) materially increase the annual level of compensation payable or to become payable by the Company or to any of its Subsidiariesdirectors or executive officers, except (C) grant any unusual or extraordinary bonus, benefit or other direct or indirect compensation to any director or executive officer, (D) materially increase the coverage or benefits available under any (or create any new) Employee Benefit Plan or (E) enter into any employment, deferred compensation, severance, consulting, non-competition or similar agreement (or amend any such agreement) to which the Company is a party or involving a director or executive officer of the Company, except, in each case, as required by changes applicable Law from time to time in GAAPeffect or by the terms of any Employee Benefit Plans;
(vi) make subject to any material loans or material advances or capital contributions to, or investments inLien, any Person of the properties or assets (other than whether tangible or intangible) of the Company and its Subsidiaries), or forgive any Indebtedness for borrowed moneyCompany, except for advances to employees Permitted Exceptions;
(vii) acquire any material properties or officers assets or sell, assign, license, transfer, convey, lease or otherwise dispose of any of the material properties or assets of the Company or any of its Subsidiaries (except pursuant to an existing Contract for expenses incurred fair consideration in the Ordinary Course of Business;
(vii) merge Business or consolidate with for the purpose of disposing of obsolete or acquire any corporation, partnership, limited liability company, other business organization or division thereof or any material amount of worthless assets, or enter into any joint venture, strategic alliance, or similar Contract);
(viii) amend, waive, modify or consent to the termination of any Material Contract or Insurance Policy, or amend, waive, modify or consent to the termination of the Company’s or any of its Subsidiaries’ rights thereunder, or enter into any Contract, in each case other than in the Ordinary Course of Business, cancel or compromise any material debt or claim or waive or release any material right of the Company;
(ix) make enter into any commitment for capital expenditures or of the Company in excess of RMB 500,000.00 for any individual commitment and RMB 2,000,000.00 for all commitments therefor that, individually or in the aggregate, deviate from the annual capital expenditures budget for the Company and its Subsidiaries made available to Buyer by more than $3,000,000;
(x) sellenter into, transfer, lease, sublease, mortgage, pledge modify or otherwise encumber terminate any labor or dispose of any collective bargaining agreement of the properties or assets of the Company and its Subsidiaries, except for sales or disposals of property or assets not in excess of $1,000,000, individually or in the aggregate, and for sales or transfers of inventory in the Ordinary Course of BusinessCompany;
(xi) amend, extend, renew, terminate permit the Company to enter into or agree to enter into any lease of real merger or personal property or consolidation with any renewals thereof involving a term of more than one year or rental obligation exceeding $200,000 per year in any single case, except in the Ordinary Course of BusinessPerson;
(xii) enter into make or rescind any Contract materially limiting in election relating to Taxes, settle or compromise any way the ability of the Company claim, action, suit, litigation, proceeding, arbitration, investigation, audit controversy relating to Taxes, or except as required by applicable law or GAAP, make any material change to any of its Subsidiaries to conduct business methods of accounting or compete with any Person in any particular geographic location methods of reporting income or line of business, other than the entry into teaming and exclusivity agreements deductions for Tax or accounting practice or policy from those employed in the Ordinary Course preparation of Business;its most recent Tax Return; or
(xiii) commence any Proceeding, other than (A) in the Ordinary Course of Business; (B) Proceedings seeking injunctive relief in order to prevent or mitigate potential harm to the Company and its Subsidiaries; or (C) counterclaims, motions for declaratory judgment or other Proceedings that are defensive in nature;
(xiv) declare, issue, make or pay any dividend or other distribution of assets in respect of any Equity Interests of the Company or any of its Subsidiaries (other than with respect to a dividend or distribution from any Subsidiary of the Company to the Company or any other Subsidiary of the Company);
(xv) incur any Indebtedness for borrowed money in excess of $500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, except in the Ordinary Course of Business or under the Company Credit Agreement; provided, that in no event shall the Company or any of its Subsidiaries, except as provided in Section 6.01(c), make any optional repayment of any indebtedness for borrowed money;
(xvi) except as otherwise required by this Agreement, applicable Law, an existing Employee Benefit Plan or an existing Contract pursuant to its terms in effect as of the date hereof, (A) materially increase any severance or termination pay or grant any retention bonus or change in control bonus; (B) hire or terminate (other than terminations for cause and replacement of individuals terminated for cause) the employment of any employee whose annual base salary exceeds $250,000 or any executive officer; (C) adopt, enter into, materially amend or terminate any Employee Benefit Plan (except changes to group healthcare or welfare benefits in connection with annual renewals in the Ordinary Course of Business); (D) enter into any collective bargaining or similar agreement; or (E) materially increase, or announce or promise a material increase in, the compensation or benefits payable to any current or former directors, managers, officers, individual service providers or any other employees, except in connection with general, ordinary course merit based increases as have been approved by the Company or its applicable Subsidiaries prior to the date hereof and set forth in Section 6.1(b)(xv) of the Disclosure Letter;
(xvii) enter into any Contract or transaction with Seller or any Affiliate thereof, or any Related Party of the Company (excluding the Company and its Subsidiaries), other than (A) any transactions contemplated by the Material Contracts (provided that such Contracts have been made available to Buyer); or (B) the reimbursement of expenses of any Affiliate of Seller in the Ordinary Course of Business pursuant to the Affiliate Contracts;
(xviii) make (except in the Ordinary Course of Business), change or revoke any material Tax election, change any material accounting period or material accounting method for Tax purposes, file any material amended Tax Return, enter into any closing agreement, settlement, or compromise of any material Tax claim or assessment, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the Ordinary Course of Business), in each case, except as required by Law;
(xix) settle or offer to settle any pending or threatened Proceeding involving the Company or any of its Subsidiaries, other than any settlement solely for monetary relief to be paid in full prior to the Closing of not more than $1,000,000 individually and that does not involve any equitable relief or limitations on the conduct of the Company or any of its Subsidiaries and which does not include any material findings or admission or wrongdoing by the Company or any of its Subsidiaries;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable, in each case, in a manner not in the Ordinary Course of Business;
(xxi) abandon or permit the lapse of any material Intellectual Property rights or any other material intangible asset used in the operation of the business of the Company or of its Subsidiaries except in the Ordinary Course of Business; or
(xxii) resolve, commit, enter into any Contract, or otherwise become obligated, agree to do anything prohibited by this Section 6.01(b6.2(b).
(c) Notwithstanding the foregoing provisions of this Section 6.01, the Company and its Subsidiaries may, at or prior to the Closing, use all or any portion of cash or cash equivalents of the Company and its Subsidiaries to (i) repay any outstanding indebtedness under the Company Credit Agreement; or (ii) declare and pay cash dividends with respect to the Equity Interests of the Company and its Subsidiaries.
(d) If Seller or the Company determines to take any action or refrain from taking any action in accordance with Sections 6.01(a)(iv) or 6.01(b)(y), then (i) prior to so doing, to the extent reasonably practicable and permitted by applicable Law, Seller shall use commercially reasonable efforts inform and consult with Buyer, permit Buyer to review and discuss in advance, and consider in good faith the views of Buyer in connection with, any proposed action or inaction. Seller shall keep Buyer reasonably informed of the status of all material matters relating to such COVID-19 Measure, the actions or inactions being taken by Seller, the Company or its Subsidiaries with respect thereto, and afford Buyer and its Representatives, access to the Company’s and its Subsidiaries’ personnel, properties, Contracts and such other information concerning their business, properties and personnel as Buyer may reasonably request, in each case, in accordance with the terms of Section 6.02 and to the extent related to the COVID-19 Measure and Seller’s and the Company’s and its Subsidiaries’ response thereto.
(e) For the avoidance of doubt, and without limiting the operation of Section 6.01(a)-(d), nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct Seller’s, the Company’s or any of its Subsidiaries’ businesses. Prior to the Closing, Seller, the Company and its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
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