Covenants of Target. Target covenants and agrees with REA that until the earlier of the Closing Date and the date upon which this Agreement is terminated in accordance with its terms, it will: (a) not solicit, initiate, knowingly encourage, cooperate with or facilitate (including by way of furnishing any non-public information or entering into any form of agreement, arrangement or understanding) the submission, initiation or continuation of any oral or written inquiries or proposals or expressions of interest regarding, constituting or that may reasonably be expected to lead to any activity, arrangement or transaction or propose any activities or solicitations in opposition to or in competition with the Transaction and without limiting the generality of the foregoing, not to induce or attempt to induce any other person to initiate any shareholder proposal or “takeover bid,” exempt or otherwise, within the meaning of applicable Laws, for securities or assets of Target, nor to undertake any transaction or negotiate any transaction which would be or potentially could be in conflict with the Transaction, including, without limitation, allowing access to any third party to conduct due diligence, nor to permit any of its officers or directors to authorize such access, except as required by statutory obligations. If Target, including any of its officers or directors, receives any form of offer or inquiry, Target will, within two (2) Business Days following receipt, notify REA of the offer or inquiry and provide REA with such details as it may request; (b) make available and afford REA and its authorized representatives (and, if requested by ▇▇▇ and at REA’s cost, provide copies of) all contracts, financial statements, minute books, share certificate books, if any, share registers, plans, reports, licenses, orders, permits, books of account, accounting records, constating documents and all other documents and information relating to Target. Target will afford REA and its authorized representatives reasonable opportunity to have free and unrestricted access to Target’s assets, undertaking, records and documents, provided that REA shall take reasonable measures to not interfere with the day-to-day operations of Target or Powdermet, Inc. during such access. At the request of ▇▇▇, Target will execute or cause to be executed such consents, authorizations and directions as may be necessary to permit any inspection of Target’s business or to enable REA or its authorized representatives to obtain full access to all files and records relating to any of the assets of Target maintained by a Taxing Authority or Governmental Entity. The obligations in this Section 4.1(b) are subject to any access or disclosure contemplated herein not being otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver has not been or cannot be obtained, provided that in such a circumstance Target will be required to disclose that information has been withheld on this basis. The exercise of any rights of inspection by or on behalf of REA under this Section 4.1(b) will not limit or otherwise affect the representations and warranties of Target hereunder; (c) except for non-substantive communications and provided that such disclosure is not otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver has not been or cannot be obtained (provided that in such circumstance Target will be required to disclose that information has been withheld on this basis), furnish promptly to REA a copy of each notice, report, schedule or other document or communication delivered, filed or received by Target in connection with or related to the Transaction, any filings under applicable Laws and any dealings with any Taxing Authority Governmental Entity in connection with or in any way affecting the Transaction as contemplated herein, provided, however, that the foregoing shall not apply to notice, report, schedule or other document or communication related to the Transaction that is attorney work product or otherwise protected by attorney-client privilege; (d) use commercially reasonable efforts to satisfy (or cause the satisfaction of) the conditions precedent to its obligations set forth in this Agreement to the extent the same are within its control and to take, or cause to be taken, all other actions and to do, or cause to be done, all other things necessary, proper, or advisable under all applicable Laws to complete the Transaction, including using commercially reasonable efforts to: (i) obtain all necessary waivers, consents and approvals required to be obtained by it from other parties to loan agreements, leases, licenses, agreements and other Contracts; and (ii) effect all necessary registrations and filings and submissions of information requested by any Governmental Entity required to be effected by it in connection with the Transaction and participate and appear in any proceedings of either Target or REA before any Taxing Authority or Governmental Entity to the extent permitted by such Taxing Authority or Governmental Entity; (e) subject to applicable Laws, not take any action, refrain from taking any action, or permit any action to be taken or not taken inconsistent with this Agreement or which would reasonably be expected to significantly impede the completion of the Transaction; (f) conduct and operate its business and affairs only in the ordinary course consistent with past practice and use commercially reasonable efforts to preserve its business organization, goodwill and material business relationships with other persons and, for greater certainty, it will not enter into any material transaction out of the ordinary course of business consistent with past practice without the prior consent of REA, which shall not be unreasonably withheld, conditioned or delayed, and Target will keep REA materially informed as to the material decisions or actions required or required to be made with respect to the operation of its business, provided that such disclosure is not otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver has not been or could not be obtained; (g) not amend, modify, terminate, cancel or let lapse any material insurance (or re-insurance) policy of Target, in effect on the Effective Date, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and re-insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the terminated, cancelled or lapsed policies for substantially similar premiums are in full force and effect; (h) except as may be necessary or desirable in order to effect the Transaction, not alter or amend its articles or by-laws as the same exist at the Effective Date; (i) not merge into or with, or amalgamate or consolidate with, or enter into any other corporate reorganization or arrangement with, or transfer its undertaking or assets as an entirety or substantially as an entirety to, any other person or perform any act which would render inaccurate in any material way any of its representations and warranties set forth herein as if such representations and warranties were made at the Closing Date, except as contemplated in this Agreement and without limiting the generality of the foregoing, it will not: (i) make any distribution by way of dividend, distribution of property or assets, return of capital or otherwise to or for the benefit of the Shareholders; (ii) purchase or redeem any shares; or (iii) issue or enter into any commitment to issue any of its shares or securities convertible into, or rights, warrants or options to acquire any such shares; (j) not dispose of any material assets; (k) except as disclosed on Disclosure Schedule 4.1(k), not to borrow money or incur any indebtedness for money borrowed, except as agreed to by ▇▇▇ in writing; (l) not commence to undertake a substantial or unusual expansion of its business facilities or an expansion that is out of the ordinary course of business consistent with prior practice; (m) take all necessary corporate action and proceedings to approve and authorize the valid and effective transfer of the Purchased Shares to REA; and (n) promptly advise REA orally and, if then requested, in writing, with the full particulars of any: (i) event occurring subsequent to the Effective Date that would render any representation or warranty of Target contained in this Agreement (except any such representation or warranty which speaks as of a date prior to the date of this Agreement), if made on or as of the date of such event or the Closing Date, untrue or inaccurate in any material respect; (ii) Material Adverse Effect in respect of Target; and (iii) breach by Target of any covenant or agreement contained in this Agreement.
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Covenants of Target. (a) Target covenants and agrees with REA that that, until the Effective Date or the earlier termination of the Closing Date and the date upon which this Agreement is terminated in accordance with its termsSection 7.0, it will:
(a) not solicit, initiate, knowingly encourage, cooperate except with or facilitate (including by way the consent of furnishing any non-public information or entering into any form of agreement, arrangement or understanding) the submission, initiation or continuation of any oral or written inquiries or proposals or expressions of interest regarding, constituting or that may reasonably be expected to lead Purchaser to any activity, arrangement deviation therefrom or transaction or propose any activities or solicitations in opposition to or in competition with the Transaction and without limiting the generality of the foregoing, not to induce or attempt to induce any other person to initiate any shareholder proposal or “takeover bid,” exempt or otherwise, within the meaning of applicable Laws, for securities or assets of Target, nor to undertake any transaction or negotiate any transaction which would be or potentially could be in conflict with the Transaction, including, without limitation, allowing access respect to any third party to conduct due diligence, nor to permit any matter contemplated by this Agreement or the Plan of its officers or directors to authorize such access, except as required by statutory obligations. If Target, including any of its officers or directors, receives any form of offer or inquiryArrangement, Target will, within two (2) Business Days following receipt, notify REA of the offer or inquiry and provide REA with such details as it may request;
(b) make available and afford REA and its authorized representatives (and, if requested by ▇▇▇ and at REA’s cost, provide copies of) all contracts, financial statements, minute books, share certificate books, if any, share registers, plans, reports, licenses, orders, permits, books of account, accounting records, constating documents and all other documents and information relating to Target. Target will afford REA and its authorized representatives reasonable opportunity to have free and unrestricted access to Target’s assets, undertaking, records and documents, provided that REA shall take reasonable measures to not interfere with the day-to-day operations of Target or Powdermet, Inc. during such access. At the request of ▇▇▇, Target will execute or cause to be executed such consents, authorizations and directions as may be necessary to permit any inspection of Target’s business or to enable REA or its authorized representatives to obtain full access to all files and records relating to any of the assets of Target maintained by a Taxing Authority or Governmental Entity. The obligations in this Section 4.1(b) are subject to any access or disclosure contemplated herein not being otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver has not been or cannot be obtained, provided that in such a circumstance Target will be required to disclose that information has been withheld on this basis. The exercise of any rights of inspection by or on behalf of REA under this Section 4.1(b) will not limit or otherwise affect the representations and warranties of Target hereunder;
(c) except for non-substantive communications and provided that such disclosure is not otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver has not been or cannot be obtained (provided that in such circumstance Target will be required to disclose that information has been withheld on this basis), furnish promptly to REA a copy of each notice, report, schedule or other document or communication delivered, filed or received by Target in connection with or related to the Transaction, any filings under applicable Laws and any dealings with any Taxing Authority Governmental Entity in connection with or in any way affecting the Transaction as contemplated herein, provided, however, that the foregoing shall not apply to notice, report, schedule or other document or communication related to the Transaction that is attorney work product or otherwise protected by attorney-client privilege;
(d) use commercially reasonable efforts to satisfy (or cause the satisfaction of) the conditions precedent to its obligations set forth in this Agreement to the extent the same are within its control and to take, or cause to be taken, all other actions and to do, or cause to be done, all other things necessary, proper, or advisable under all applicable Laws to complete the Transaction, including using commercially reasonable efforts to:
(i) obtain all necessary waivers, consents and approvals required to be obtained by it from other parties to loan agreements, leases, licenses, agreements and other Contracts; and
(ii) effect all necessary registrations and filings and submissions of information requested by any Governmental Entity required to be effected by it carry on the Business substantially in connection accordance with the Transaction and participate and appear business plan referred to in any proceedings of either Target or REA before any Taxing Authority or Governmental Entity to the extent permitted by such Taxing Authority or Governmental Entity;
(e) subject to applicable Laws, not take any action, refrain from taking any action, or permit any action to be taken or not taken inconsistent with this Agreement or which would reasonably be expected to significantly impede the completion Section 3.1.27 other than changes as a result of the Transaction;
Arrangement (fsuch as not hiring sales staff) conduct and operate its business and affairs only in the ordinary course consistent with past practice and use commercially all reasonable efforts to preserve intact its present business organization, organization and keep available the services of its present officers and employees and others having business dealings with it to the end that its goodwill and material business relationships with other persons and, for greater certainty, it will not enter into any material transaction out of the ordinary course of business consistent with past practice without the prior consent of REA, which shall not be unreasonably withheld, conditioned or delayed, and Target will keep REA materially informed as to the material decisions or actions required or required to be made with respect to the operation of its business, provided that such disclosure is not otherwise prohibited by reason of a confidentiality obligation owed to a third party for which a waiver has not been or could not be obtained;
(g) not amend, modify, terminate, cancel or let lapse any material insurance (or re-insurance) policy of Target, in effect on the Effective Date, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and re-insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the terminated, cancelled or lapsed policies for substantially similar premiums are in full force and effect;
(h) except as may be necessary or desirable in order to effect the Transaction, not alter or amend its articles or by-laws as the same exist at the Effective Date;
(i) not merge into or with, or amalgamate or consolidate with, or enter into any other corporate reorganization or arrangement with, or transfer its undertaking or assets as an entirety or substantially as an entirety to, any other person or perform any act which would render inaccurate in any material way any of its representations and warranties set forth herein as if such representations and warranties were made at the Closing Date, except as contemplated in this Agreement and without limiting the generality of the foregoing, it will not:
(i) make any distribution by way of dividend, distribution of property or assets, return of capital or otherwise to or for the benefit of the Shareholdersmaintained;
(ii) purchase or redeem any shares; or
(iii) issue or enter into any commitment to issue any of its shares or securities convertible into, or rights, warrants or options to acquire any such shares;
(j) not dispose of any material assets;
(k) except as disclosed on Disclosure Schedule 4.1(k), not to borrow money or incur any indebtedness for money borrowed, except as agreed to by ▇▇▇ in writing;
(l) not commence to undertake a substantial or unusual expansion of its business facilities or an expansion that is out of the ordinary course of business consistent with prior practicein light of current market and economic conditions;
(miii) take all necessary corporate action and proceedings to approve and authorize the valid and effective transfer not split, combine or reclassify any of the Purchased Shares to REA; andoutstanding Target Shares, nor declare or pay any dividends on or make any other distributions (in either case, in stock or property) on or in respect of the outstanding Target Shares;
(niv) promptly advise REA orally andnot amend its articles or by-laws (other than by obtaining shareholder approval to the amendment to Target's by-laws approved by the board of directors of Target on January 26, if then requested, in writing, with the full particulars of any:2004) or repealing such amendment to its by-laws;
(iv) event occurring subsequent not allot, reserve, set aside or issue, authorize or propose the allotment, reservation, setting aside or issuance of, or purchase or redeem or propose the purchase or redemption of, any shares in its capital stock or any class of securities convertible or exchangeable into, or rights, warrants or options to acquire, any such shares or other convertible or exchangeable securities, except for (A) the issuance of Target Common Shares pursuant to the Effective Date that would render any representation or warranty exercise of fully vested Target contained in this Agreement (except any such representation or warranty which speaks as of a date Options granted prior to the date hereof; and (B) the issuance of this Agreement), if made on or as Target Common Shares to holders of Target Class A Preferred Shares upon the exercise by the holders thereof of the date right of conversion attached to such event or the Closing Date, untrue or inaccurate in any material respectshares;
(ii) Material Adverse Effect in respect of Target; and
(iii) breach by Target of any covenant or agreement contained in this Agreement.
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Sources: Arrangement Agreement (Cray Inc)