Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents. (b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to: (i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company); (ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions); (iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries; (iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice; (v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter; (vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements; (vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries; (viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii); (ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions; (x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 4 contracts
Sources: Merger Agreement, Merger Agreement (Twenty-First Century Fox, Inc.), Merger Agreement (Walt Disney Co/)
Interim Operations. (a) The Each of the Company covenants and agrees Parent covenant and agree as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent the Company or Parent, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) otherwise expressly contemplated by this Agreement, as may be required by applicable LawLaw or as set forth in Section 7.1(a) of such Party’s Disclosure Letter, (2i) expressly required by the Transaction Documents (including in connection with the Separation each Party and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, will use its commercially reasonable best efforts to conduct the Retained Business its business in all material respects in the ordinary course of business consistent with past practice, Ordinary Course and the Company shall, and shall cause each of its Subsidiaries to, solely (ii) to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, such Party and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributorslicensors, licensorslicensees, creditors, lessors, employees Service Providers and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees Service Providers and agents, except as otherwise expressly contemplated by this Agreement.
(b) Without limiting the generality of, of and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatof Section 7.1(a), from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise (unless Parent shall otherwise approve w) expressly contemplated by this Agreement, (x) required by applicable Law, (y) approved in writing, writing by the other Party (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3z) otherwise expressly disclosed set forth in Section 5.01(b7.1(b) of the Company such Party’s Disclosure Letter), the Company each Party, on its own account, shall not and shall not permit any of cause its Subsidiaries not to:
(i) make or propose any change to such Party’s Organizational Documents or, except for amendments that would both not materially restrict the operations of such Party’s businesses and not reasonably be expected to prevent, materially delay or materially impair the ability of such Party to consummate the Transactions, the Organizational Documents of any of such Party’s Subsidiaries, including, in the case of Parent, Parent Sub’s or LLC Sub’s Organizational Documents;
(ii) except for any such transactions among its direct or indirect wholly owned Subsidiaries, (A) merge or consolidate itself or any of its Subsidiaries with respect any other Person, or (B) restructure, reorganize or completely or partially liquidate;
(iii) acquire assets from any other Person (A) with a fair market value or purchase price in excess of $10,000,000 in the aggregate in any transaction or series of related transactions (including incurring any Indebtedness related thereto), in each case, including any amounts or value reasonably expected to SpinCo and be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or (B) that would reasonably be expected to prevent, materially delay or materially impair the SpinCo Subsidiaries (ability of such Party to consummate the Transactions, other than than, in the case of clause (A))) (w) acquisitions in the Ordinary Course of inventory or other parts and accessories necessary for the ongoing operation of the business of such Party and its Subsidiaries, (x) acquisitions in order to maintain and sustain such Party’s and its Subsidiaries’ rigs and equipment in the Ordinary Course, (y) acquisitions pursuant to Material Contracts as in effect on the date of this Agreement and (z) transactions among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or of any of its Subsidiaries (other than (A) amend Encumbrances that are required by or automatically effected by the Company Credit Agreements, which shall be released at or prior to the Closing or (B) the issuance of shares (x) by its certificate direct or indirect wholly owned Subsidiary to it or another of incorporation its direct or bylaws indirect wholly owned Subsidiaries, (y) in respect of equity-based awards outstanding as of the date of this Agreement, or comparable governing documents(z) granted in accordance with Section 7.1(b)(xvi) in each of clauses (y) and (z), in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance (other than amendments to any Permitted Encumbrances) over any material portion of such Party’s and its Subsidiaries’ consolidated properties and assets that is not incurred in the governing documents Ordinary Course on any of its assets or any Subsidiary of its Subsidiaries, except for Encumbrances (A) that are required by or automatically effected by Contracts in place as of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)date hereof, (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of that do not materially detract from the Company which remains a wholly owned Subsidiary after consummation value of such transaction), assets or (C) that do not materially impair the operations of such Party or any of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its direct or indirect wholly owned Subsidiaries or to or from Parent and any of its direct or indirect wholly owned Subsidiaries, as applicable, or in accordance with Section 7.1(b)(xvi)) in excess of $1,000,000 individually or $2,000,000 in the aggregate;
(vii) except to the extent expressly provided by, and consistent with, Section 7.1(b)(vii) of such Party’s Disclosure Letter, declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or to the Company modify in any material respect its dividend policy;
(viii) reclassify, split, combine, subdivide or redeem, purchase (2through such Party’s share repurchase program or otherwise) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect toto (A) the capital stock or other equity interests of a direct or indirect wholly owned Subsidiary of such Party or (B) the acquisition of shares of Company Common Stock or Parent Common Stock, as applicable, tendered by Service Providers in connection with a cashless exercise of the Company Restricted Stock UnitsOption Awards or Parent Options, as applicable, outstanding as of the date of this Agreement or in order to pay Taxes in connection with the exercise or vesting of Company Deferred Stock Units Equity Awards or Company Performance Stock UnitsParent Equity Awards, in each case as applicable, outstanding as of the date of this Agreement or granted in accordance with past practice and with Section 7.1(b)(xvi), pursuant to the terms of the Company Stock Plans or Parent Stock Plans, as applicable, and the applicable award agreement, in effect on the date Ordinary Course;
(ix) except to the extent expressly provided by, and consistent with, Section 7.1(b)(ix) of such Party’s Disclosure Letter, make or authorize any payment of, or accrual or commitment for, capital expenditures, except any such expenditure (A) not in excess of $100,000,000 in the aggregate during any consecutive 12 month period (other than capital expenditures within the thresholds set forth in Section 7.1(b)(ix) of such Party’s Disclosure Letter), (B) not in excess of $25,000,000 (net of insurance proceeds) in the aggregate that such Party reasonably determines are necessary to avoid a material business interruption or maintain the safety and integrity of any asset or property or (C) paid by any direct or indirect wholly owned Subsidiary to such Party or to any other direct or indirect wholly owned Subsidiary of such Party, in each case in response to any unanticipated and subsequently discovered events, occurrences or developments (provided, that such Party will use its reasonable best efforts to consult with the other Party prior to making or agreeing to any such capital expenditure);
(x) other than in connection with any transaction or potential transaction described in Section 7.1(b) of such Party’s Disclosure Letter, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement Agreement, adversely amend, modify or supplement in any material respect, or waive, terminate, assign, convey, Encumber or otherwise transfer, in whole or in part, any material right or interest pursuant to or in, any Material Contract other than (or as modified after A) expirations and renewals of any such Contract in the date of this Agreement Ordinary Course in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate such Contract (other than transactions any Contract of the type contemplated by referenced in Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions5.17(a)(ii);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof), (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of non-exclusive licenses under Intellectual Property owned by the Company or any of its Subsidiaries, (C) increase the compensation, bonus Subsidiaries or pension, welfare or other benefits of any director, officer or employee of the Company Parent or any of its Subsidiaries, except as applicable, in each case, granted to customers in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationOrdinary Course, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (GC) forgive any loans to directors, officers agreement among such Party and its direct or employees of the Company indirect wholly owned Subsidiaries or any of its among such Party’s direct or indirect wholly owned Subsidiaries;
(ivxi) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) than in the ordinary course of business consistent Ordinary Course or with past practice in a principal amount respect to amounts that are not material to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company such Party and its Subsidiaries, taken as a whole, than existing Indebtednesscancel, modify or waive any debts or claims held by it or any of its Subsidiaries or waive any rights held by it or any of its Subsidiaries except debts or claims among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xii) settle or compromise, or offer or propose to settle or compromise, any material Proceeding, including before a Governmental Entity, except in accordance with a maturity date the parameters set forth in Section 7.1(b)(xii) of such Party’s Disclosure Letter; provided, that no more than 10 years after such settlement or compromise, or offer in respect thereof, may involve any injunctive or other non-monetary relief which, in either case, imposes any material restrictions on the date business operations of the Contract evidencing such IndebtednessParty and its Subsidiaries or Affiliates;
(xiii) amend any material financial accounting policies or procedures, except as required by changes to GAAP;
(xiv) (A) make, change or revoke any material election with respect to Taxes or Tax matters, (B) except change any material Tax accounting method or period, (C) enter into any material closing agreement with respect to Taxes, (D) enter into any material Tax sharing, allocation or indemnification agreement or arrangement, (E) settle, compromise or otherwise finally resolve any material Tax claim, audit, assessment or dispute, (F) surrender any right to claim a refund of a material amount of Taxes, (G) change its tax residency, or (H) fail to file when due (taking into account any available extensions that do not result in the Bridge Facilityimposition of a penalty) any material Tax Return;
(xv) transfer, in replacement sell, lease, divest, cancel, abandon, allow to lapse or expire or otherwise dispose of, or permit or suffer to refinanceexist the creation of any Encumbrance upon, existing Indebtedness on then prevailing market terms any assets (tangible or on terms substantially consistent with intangible), product lines or more beneficial businesses material to the Company it and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi))Subsidiaries, except for in connection with (A) sales of or non-exclusive licenses of the foregoing provided to customers in the Ordinary Course, (B) sales of obsolete assets, (C) sales, leases, non-exclusive licenses or other dispositions of any properties or assets (excluding capital stock not including services or sales of inventory in the Retained SubsidiariesOrdinary Course) with a fair market value not in excess of $50,000,000 individually if the transaction is not 10,000,000 in the ordinary course or $100,000,000 individually aggregate other than pursuant to Material Contracts in any event or (B) transactions among effect prior to the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transferdate of this Agreement, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable entered into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on after the date of this Agreement in accordance with this Agreement and (D) sales among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xvi) except as required by the existing terms of any Benefit Plan as in effect on the date of this Agreement, as expressly permitted under this Agreement or as required by applicable Law, increase or change the compensation or benefits payable to any Service Provider other than in the Ordinary Course; provided, that, notwithstanding the foregoing, except as expressly disclosed in Section 7.1(b)(xvi) of such Party’s Disclosure Letter or required pursuant to a Company Benefit Plan or Parent Benefit Plan, as applicable, in effect as of the date of this Agreement, the Parties shall not: (A) grant any new long-term incentive or equity-based awards and or amend or modify the terms of any outstanding awards under any Company Stock PlansBenefit Plan or Parent Benefit Plan, as applicable, (B) Investment Preferred Stock (as defined in the Bridge Facility) grant any retention or transaction bonuses, (C) increase or change the compensation or benefits payable to any executive officer (other than changes in health and welfare benefits (other than severance plans) that are generally applicable to all salaried Service Providers in the Ordinary Course), (D) terminate, enter into, amend, modify or renew any material Benefit Plan, other than routine amendments to health and welfare plans (other than severance plans) that do not materially increase benefits or result in a material increase in administrative costs, or adopt any compensation or benefit plan, program, policy, agreement or arrangement that would be a material Benefit Plan if it were in existence as of the date hereof, (E) accelerate the vesting of any compensation for the benefit of any Service Provider, (F) increase or change the severance terms applicable to any Service Provider, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) other than as required by wholly owned Subsidiaries GAAP, change any assumptions required by GAAP used to calculate funding or contribution obligations under any Benefit Plan, or increase or accelerate the funding or contribution obligations under any Benefit Plan, or increase or accelerate the funding rate in respect of any Benefit Plan or (I) terminate the employment of any executive officer (other than for cause) or hire any new executive officer (other than as a replacement hire receiving substantially similar terms of employment); provided, that, to the extent that a Party intends to hire an individual to replace an executive officer of such Party, such Party shall first consult in good faith with the other Party prior to, and with respect to, the hiring of such individual;
(xvii) recognize any labor union, works council, or other labor organization or employee representative as the representative of any of the employees of the Party or its Subsidiaries, or become a party to, establish, adopt, amend, commence negotiations for or terminate any collective bargaining agreement or other labor-related Contract with a labor union, works council, or other labor organization or employee representative;
(xviii) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security) or guarantee any such Indebtedness, except for (A) Indebtedness for borrowed money incurred in the Ordinary Course under the Company’s or Parent’s, as applicable, revolving credit facilities and other lines of credit (including equipment loans) existing as of the date of this Agreement, (B) guarantees by the Company or to any direct or indirect wholly owned Subsidiary of the Company of Indebtedness of the Company or any other direct or indirect wholly owned Subsidiary of the Company; provided that, for (C) guarantees by Parent or any direct or indirect wholly owned Subsidiary of Parent of Indebtedness of Parent or any other direct or indirect wholly owned Subsidiary of Parent, (D) Indebtedness incurred in connection with a refinancing or replacement of existing Indebtedness (but in all cases which refinancing or replacement shall not increase the avoidance aggregate amount of doubtIndebtedness, granting customary profit participation rights plus fees, expenses, premium and accrued and unpaid interest in respect of the Indebtedness being refinanced or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not replaced, permitted to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) outstanding thereunder and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any businesson customary commercial terms), whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(xE) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinIndebtedness
Appears in 4 contracts
Sources: Merger Agreement (Nextier Oilfield Solutions Inc.), Merger Agreement (Patterson Uti Energy Inc), Merger Agreement (Nextier Oilfield Solutions Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after From the execution date of this Agreement and prior to until the First Effective Time (unless Parent shall otherwise approve in writingTender Offer Purchase Time, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a) 5.1 of the Company Disclosure Letter)Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries subsidiaries to:
(ia) except with respect to SpinCo conduct its business and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing operations only in the ordinary course of business consistent with past practice;
(vb) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with respect customers, suppliers and other Persons having business dealings with them;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its material Company Assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective Certificate of Incorporation, Bylaws, partnership agreement or other charter or organizational documents;
(e) other than pursuant to the Retained Business, other than with respect to acquisitions stock purchase right identified as Item 1 in Section 3.2(a) of businesses, which is subject to Section 5.01(b)(ix), the Disclosure Schedule and other than with respect up to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) 20,000 Company Stock Options that may be issued under the 2000 Stock Option Plan in connection with the repair Company's fair share plan, not authorize for issuance, issue, sell, grant, deliver, pledge or replacement encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of facilitiesany class or series of capital stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, properties any securities convertible into or assets destroyed exercisable or damaged due exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to casualty purchase or accident acquire any such shares, securities or interests (if covered other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(f) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock or (ii) in solely the case of the Company, declare, set aside or pay any dividends on, or make other distributions in respect of, any of the Company's stock, repurchase, redeem or otherwise acquire, or agree or commit to repurchase, redeem or otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(g) except as contemplated by insurance Section 2.10, not amend or if otherwise modify the portion terms of any Company Stock Options or the Company Option Plans, the effect of which that is shall be to make such terms more favorable to the holders thereof or Persons eligible for participation therein;
(h) other than normal salary increases in the ordinary course of business consistent with past practice, not covered by insurance is less (i) materially increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries except arrangements in connection with employee transfers and agreements with new employees having a salary of greater than $100,000,00075,000, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries, or (iii) establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or material benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director or officer or employee (other than in the ordinary course of business) of the Company or any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other Person outside the ordinary course of business consistent with past practice or any interest in any real properties (other than in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (Bi) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; (ii) incurring indebtedness for borrowed money in the ordinary course of business consistent with past practice and in an aggregate amount not to exceed $100,000 or (iii) advances in the ordinary course pursuant to (A) working capital lines of credit in an amount not to exceed $15,000,000 in the aggregate not in excess and (B) warehouse lines of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 credit set forth in Section 5.01(b)(v3.16(a)(v) of the Company Disclosure LetterSchedule, or any renewal or replacement thereof;
(vik) with respect to the Retained Business, transfernot sell, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon encumber or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses of, or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect agree to the Retained Business, transfersell, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon encumber or otherwise dispose of of, any material properties or assets (including capital stock of the Company or any of its Retained Subsidiaries but subsidiaries, other than in the ordinary course of business;
(l) not authorize or make any capital expenditures (including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (Alease) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if 500,000 in the transaction is aggregate other than the ordinary course of business for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, including with respect to the method of accounting for loans held for sale or premiums for risk management instruments, or recognizing loan origination income, net premium income, or gains or losses on risk management instruments, except as may be required by a change in law or in GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or $100,000,000 individually in terminate any event material Contract or (B) transactions among the Company and the Retained Subsidiarieswaive, release or assign any material rights or claims thereunder;
(viiip) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any of business, whether not enter into contracts that reasonably would involve financial obligations by the Company exceeding $100,000;
(q) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, purchase of property restructuring, recapitalization or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as other reorganization of the date of the agreement for such acquisition); provided that neither the Company nor or any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactionssubsidiaries;
(xr) other than capital expenditures made fail to report any facts, circumstance or events that has resulted in accordance with Section 5.01(b)(vany insurance claims that, individually or in the aggregate, would have a Material Adverse Effect; and
(s) except as to subsections (a), (b) and other than purchases and licenses (c) of film and television and production programming (includinSection 5.1, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 4 contracts
Sources: Merger Agreement (Royal Bank of Canada), Merger Agreement (Prism Financial Corp), Merger Agreement (Prism Financial Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) this Agreement or (3) otherwise expressly disclosed in Section 5.01(a6.1(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct its business and the Retained Business business of its Subsidiaries in the ordinary course of business consistent with past practice, practice and each of the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessshall, subject to compliance with the specific matters set forth below, use commercially reasonable best efforts to preserve the Retained Business’ its business organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) it and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time Time, except (unless A) as required by applicable Law, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law), (2C) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise as expressly disclosed in Section 5.01(b6.1(a) of the Company Disclosure Letter)Letter or (D) as expressly provided for in this Agreement, the Company shall not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate articles of incorporation or bylaws code of regulations (or comparable governing documents) (other than immaterial amendments to the governing documents of any wholly owned Subsidiary of the Company that would not prevent, materially delay or materially impair the Initial Merger or the other Transactionstransactions contemplated by this Agreement), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) other than normal semiannual quarterly cash dividends on the Common Stock Company’s Shares as described in Section 5.01(b)(i6.1(a)(i)(C) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, stock or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the cashless exercise of Company Options or the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock UnitsOptions, Company Deferred Restricted Stock Units or Company Performance Stock UnitsUnits in connection with any Taxable event related to such awards, in each case in accordance with past practice and with the terms of the applicable Company Stock Plans Plan as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, of any wholly owned Subsidiaries of the Company that would not (x) prevent, materially delay or materially impair the TransactionsMerger or the other transactions contemplated by this Agreement or (y) reasonably be expected to result in any significant Tax liability);
(iii) except as expressly contemplated by the terms of this Agreement, as expressly disclosed in Section 6.1(a)(iii) of the Company Disclosure Letter or as required by applicable Law or by the terms of any Company Plan listed on Section 5.1(h)(i) of the Company Disclosure Letter or any CBA, in either case as in effect on the date hereof: hereof (or as modified after the date of this Agreement in accordance with the terms of this Agreement):
(A) establish, adopt, amend increase the compensation or terminate benefits payable to any material Company Plan director or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan named executive officers as identified in the ordinary course Company’s proxy statement for the 2017 annual meeting of business consistent with past practice that does not materially stockholders (collectively, the “Senior Executives”) of the Company, increase the cost of such Company Plan compensation or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses payable to any director, officer, employee or other service provider individual consultant of the Company or any of its Subsidiaries, (C) increase the compensationor make any loans to, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees individual consultant of the Company or any of its Subsidiaries;
(B) grant any new equity-based awards, or amend or modify the terms or accelerate the vesting of any such outstanding awards (except for any acceleration of any Company Option, Company Performance Stock Unit and Company Restricted Stock Unit in connection with the cessation of any Person’s employment with the Company or any of its Subsidiaries (other than any Senior Executive) to the extent that such acceleration is consistent with past practice), under any Company Plan;
(C) amend any severance plan or agreement as in effect on the date hereof or waive or release any restrictive covenants thereunder;
(D) make any change to any Company Pension Plan or any Company Plan that is an “employee welfare benefit plan” (within the meaning of Section 3(1) of ERISA) that would materially increase the costs to the Company or any of its Subsidiaries in respect of such Company Plan;
(E) establish, adopt, or enter into any new arrangement that would be a Company Plan if in effect on the date hereof, other than individual separation and release agreements entered into in connection with ordinary-course terminations on terms consistent with the severance arrangements listed on Section 5.1(h)(i) of the Company Disclosure Schedule;
(F) accelerate the payment of non-equity related compensation or benefits to any director, officer, employee, consultant or individual service provider, except as required (without discretion) pursuant to the terms of the Company Plans;
(G) hire any new officer, employee, consultant or individual service provider (provided that the Company shall be permitted to (x) hire employees, consultants or other individual service providers with an aggregate annual base compensation and target incentive opportunity below $350,000 in the ordinary course of business consistent with past practice, or (y) engage individual or entity service providers with an aggregate annual base compensation and target incentive opportunity below $350,000 in the ordinary course of business consistent with past practice to fill positions that are open as of the date hereof or that become open following the date hereof to the extent reasonably necessary as determined by the Company in its sole discretion to maintain the Company’s core business); or
(H) terminate any employee or officer of the Company or any of its Subsidiaries at level B7 or higher other than for cause (as determined in the ordinary course of business consistent with past practice);
(iv) incur or guarantee any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice practice, borrowings under the Company’s revolving credit facility as in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken effect as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after of the date of the Contract evidencing such Indebtednesshereof, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany inter-company Indebtedness among the Company and its wholly owned Subsidiaries, (C) commercial paper issued in the ordinary course of business and (D) (1i) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2ii) overdraft facilities or cash management programs, in the case of each case of clauses (i) and (ii), issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practicebusiness;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in which do not exceed during either the aggregate not in excess of 120% 2017 fiscal year or the 2018 fiscal year one hundred and five percent (105%) of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) a copy of the Company Disclosure Letterwhich was previously provided to Parent;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien (other than a Permitted Lien) upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) any of the foregoing that occur in the ordinary course non-exclusive licenses or ordinary course security interests in connection with of business or, to the production or financing of film extent applicable, among the Company and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Propertyits Subsidiaries, (B) the granting of any licenses of Intellectual Property where in the aggregate payments under such license do not exceed $125,000,000 annually per license, ordinary course consistent with past practice or (C) sales transfers, leases, sales, assignments, lapses, abandonments, cancellations, mortgages, pledges, Liens, or other dispositions of Intellectual Property (other than licenses) with a fair market value less than $35,000,000 individually if the transaction is not 10,000,000 in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held aggregate for use exclusively in the SpinCo Business and (E) Affiliation Agreementsall such actions;
(vii) other than in the ordinary course of business consistent with respect to the Retained Businesspast practice, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries6.1(a)(vi) with a fair market value not in excess of $50,000,000 5,000,000 individually if the transaction is not or $12,500,000 in the ordinary course or $100,000,000 individually in any event or aggregate (B) other than transactions among the Company and the Retained its wholly owned Subsidiaries);
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock UnitsOptions, Company Performance Restricted Stock Units and Company Deferred Performance Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, or (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 5,000,000 individually or $200,000,000 12,500,000 in the aggregate in any year, in each case to acquire any businessbusiness or businesses or to acquire assets or other property, whether by merger, consolidation, purchase of property or assets, licenses assets or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into make any such transaction acquisition that would, or would reasonably be expected likely to, prevent, materially delay or materially impair the consummation Company’s ability to consummate the transactions contemplated by this Agreement; provided, further that nothing in this Section 6.1(a)(ix) shall restrict the ability of the TransactionsCompany to invest additional funds in any existing asset of the Company to offset any dilution in the Company’s existing interest in such asset;
(x) make any material change with respect to its financial accounting policies or procedures, except as required by changes in GAAP (or any interpretation thereof) or by applicable Law;
(xi) except as required by applicable Law, (A) make, change or revoke any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement, in each case that is inconsistent with elections made or positions taken in preparing or filing similar Tax Returns in prior periods, except in each case as a result of, or in response to, any change in U.S. federal Tax Laws or regulations or administrative guidance promulgated or issued thereunder, (B) change any Tax accounting period or any material method of Tax accounting, (C) amend any material Tax Return, (D) settle or resolve any material Tax liability or any Tax audit or controversy with respect to a material amount of Taxes, (E) surrender any right to claim a material refund of Taxes, (F) consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries, other than any extension pursuant to an extension of time to file any Tax Return or (G) enter into any closing agreement or similar agreement with any Tax authority in respect of Taxes;
(xii) (A) enter into any new line of business other than any line of business that is reasonably ancillary to and a reasonably foreseeable extension of any line of business as of the date of this Agreement or (B) conduct a line of business of the Company or any of its Subsidiaries in any geographic area where it has never previously conducted business prior to the date of this Agreement;
(xiii) make any loans, advances or capital expenditures made contributions to, or investments in, any Person (other than loans, advances or capital contributions to the Company or any direct or indirect wholly owned Subsidiary of the Company);
(xiv) (A) amend or modify in any material respect or terminate (excluding terminations upon expiration of the term thereof in accordance with the terms thereof) any Material Contract or waive, release or assign any material rights, claims or benefits under any Material Contract, other than any amendment, modification, termination, waiver, release or assignment (x) as required by Law, (y) pursuant to “most favored nation” offers made prior to the date of this Agreement or (z) in the ordinary course of business; provided that in no event shall the Company or its Subsidiaries amend or modify a Contract in which the packaging or rate terms would materially impact meeting the Company’s business plan, (B) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement unless it is on terms substantially consistent with, or on terms more favorable to the Company and/or its Subsidiaries (and to Parent and its Subsidiaries following the Closing) than a contract it is replacing; provided that in no event shall the Company or its Subsidiaries enter into a Contract in which the packaging or rate terms would materially impact meeting the Company’s business plan or (C) without restricting any action that is permissible in accordance with clauses (A) or (B) hereof, make any concession, or offer to make any concession, under any Material Contract except for (x) annual “most favored nation” offers made in the ordinary course of business consistent with past practice in connection with new issues arising after March 2017 or (y) mutual “clean slate” releases with distributors; provided that the foregoing shall not prohibit or restrict the ability of the Company or its Subsidiaries to take any action described in this Section 5.01(b)(v6.1(a)(xiv) in the ordinary course of business with respect to Material Contracts between the Company and/or one or more of its wholly owned Subsidiaries; provided, further that for the avoidance of doubt, this Section 6.1(a)(xiv) shall not prohibit or restrict any Company Plans;
(xv) settle any action, suit, case, litigation, claim, hearing, arbitration, investigation or other proceedings before or threatened to be brought before a Governmental Entity, or pay, discharge, settle or waive any material liability, other than settlements (A) if the amount of any such settlement is not in excess of $500,000 individually or $2,000,000 in the aggregate; provided that such settlements are solely for money damages (and confidentiality and other than purchases and licenses of film and television and production programming (includinsimilar customary provisions that would not reasonably be expected to place any material restrictions on the
Appears in 4 contracts
Sources: Voting Agreement (Newhouse Broadcasting Corp), Merger Agreement (Scripps Networks Interactive, Inc.), Voting Agreement (Discovery Communications, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned delayed or delayedconditioned)), and except as otherwise expressly permitted by this Agreement or as required by a Governmental Entity or applicable Laws, the business of it and its Subsidiaries shall be conducted in all material respects in the ordinary course and, to the extent consistent with the foregoing, the Company and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations substantially intact, maintain satisfactory relationships with Governmental Entities, NERC, PJM, customers and suppliers having significant business dealings with them and keep available the services of their key employees; provided, however, that no action taken by the Company or its Subsidiaries with respect to matters specifically addressed by clauses (1i)-(xx) of this Section 6.1(a) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. In furtherance of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned), (C) as is required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution Law or as contemplated by the Final Step Plan) any Governmental Entity or (3D) otherwise expressly disclosed as set forth in Section 5.01(a6.1(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws or other applicable governing instruments;
(ii) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries, except for any such transactions among wholly-owned Subsidiaries of the Company;
(iii) acquire (including by merger, consolidation or acquisition of equity interests or assets or any other business combination) (A) any other Person or any organization or division of any other Person or (B) any assets outside of the ordinary course of business, other than amendments acquisitions (1) pursuant to Contracts in effect as of the governing documents date of this Agreement (copies of which have been made available to Parent), (2) made in connection with any transaction solely between the Company and a wholly-owned Subsidiary of the Company or between wholly-owned Subsidiaries of the Company or (3) that would not preventbe permissible under clause (ix) below;
(iv) issue, delay sell, pledge, dispose of, grant, transfer, encumber, or impair authorize the Initial Merger issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or the other Transactions)encumbrance of, (B) split, combine, subdivide or reclassify its outstanding any shares of capital stock (except for any such transaction by a wholly owned subsidiary or other equity interests of the Company which remains or any of its Subsidiaries (other than (A) the issuance of Shares upon the vesting, exercise or settlement of Company RSUs, Company PSUs, and Company Awards (and dividend equivalents thereon, if applicable) or (B) the issuance of shares by a wholly wholly-owned Subsidiary after consummation of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such transaction)capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(Cv) make any loans, advances or capital contributions to or investments in any Person (other than among the Company and any direct or indirect wholly-owned Subsidiary of the Company or among the Company’s wholly-owned subsidiaries) in excess of $10,000,000 in the aggregate other than loans, advances, capital contributions or investments made in the ordinary course of business;
(vi) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1A) any regular quarterly dividends or distributions paid to holders of Shares in an amount and on a schedule consistent with the Company’s past practices and not in excess of $0.27 per Share per quarter, (B) a “stub period” dividend to stockholders of record as of immediately prior to the Effective Time equal to the product of (x) the number of days from the record date for payment of the last quarterly dividend paid by the Company prior to the Effective Time through and including immediately prior to the Effective Time and (y) a daily dividend rate determined by dividing the amount of the last quarterly dividend prior to the Effective Time by ninety-one (91), and (C) dividends paid by any direct or indirect wholly wholly-owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company any other direct or (2indirect wholly-owned Subsidiary) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock;
(vii) except for transactions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant the retention or acquisition of any Shares tendered by current or former employees or directors in order to pay Taxes in connection with the forfeiture ofvesting, exercise or withholding settlement of Taxes with respect toCompany RSUs, Company Restricted Stock UnitsPSUs, and Company Deferred Stock Units Awards (and dividend equivalents thereon, if applicable));
(viii) incur, assume or Company Performance Stock Units, in each case in accordance with past practice and with the terms otherwise become liable for any indebtedness for borrowed money or guarantee such indebtedness of the Company Stock Plans as in effect on the date another Person (other than of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly a wholly-owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize issue or completely sell any debt securities or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee warrants or other service provider rights to acquire any debt security of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice (including to fund expenditures permissible under clauses (iii), (v) and (ix) of this Section 6.1(a)) or (B) other indebtedness in a an aggregate principal amount not to exceed $400,000,000 50,000,000 outstanding at any time;
(ix) except for expenditures related to operational emergencies, equipment failures or outages make or authorize any capital expenditure in excess of $100,000,000 in the aggregate at during any time outstanding on prevailing market terms calendar year;
(x) make any material changes with respect to financial accounting policies or on terms substantially consistent procedures, except as required by GAAP;
(xi) other than with respect to Rate Cases and the regulatory approval process, which are addressed in Section 6.5 and Transaction Litigation, which is addressed in Section 6.14, settle, release, waive or more beneficial to the Company and its Subsidiariescompromise any litigation claim, taken as or other pending or threatened proceedings by or before a wholeGovernmental Entity if such settlement, than existing Indebtednessrelease, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, waiver or compromise (BA) except with respect to the Bridge Facilitypayment of monetary damages, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to involves the payment by the Company and or any of its SubsidiariesSubsidiaries of monetary damages that together with all other settlements, taken as a wholereleases, than the Indebtedness being replaced waivers or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among compromises by the Company and or any of its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to Subsidiaries exceed $250,000,000 50,000,000 individually or in the aggregate at during any time outstandingcalendar year, net of any amount covered by insurance or third-party indemnification or (FB) Indebtednesswith respect to any non-monetary terms and conditions therein, imposes or requires actions that would or would be reasonably likely to have a material effect on the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations continuing operations of the Company or any of its Subsidiaries or Parent or any of its Subsidiaries after the Closing;
(xii) other than with respect to the Rate Cases, initiate, file or pursue any rate cases, or make any public announcement regarding an intent to file any rate cases;
(xiii) fail to make any regulatory filings required by Law, other than those regulatory filings that are otherwise addressed by this Agreement, except to the extent such Indebtedness failure would not have a material adverse effect on the continuing operations of the Company or any of its Subsidiaries or Parent or any of its Subsidiaries after the Closing;
(and Parent and xiv) make, revoke or amend any material Tax election, enter into any closing agreement, settlement or compromise of any claim or assessment with respect to any material Tax liability (unless such closing agreement, settlement or compromise is not materially greater than the reserves established in accordance with GAAP in respect of the claim or assessment that is the subject of such closing agreement, settlement or compromise), amend any material Tax Return, surrender a claim for a material refund of Taxes or consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material amount of assets, product lines or businesses of the Company or its Subsidiaries, including, following the Distribution, the Retained including capital stock of any of its Subsidiaries, shall not other than sales and dispositions of inventory, supplies and other assets (A) in the ordinary course of business or (B) pursuant to Contracts in effect prior to the date of this Agreement (copies of which have any obligations been made available to Parent);
(xvi) except as required pursuant to Contracts or Benefit Plans in respect thereofeffect prior to the date of this Agreement (including the Company Change in Control Severance Plan), (GA) Indebtedness under the Bridge Facilitygrant any equity awards, refinancings or replacements thereof and of commitments thereunder, and grant or provide any refinancings material severance or replacements of material termination payments or benefits to any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 executive employee of the Company Disclosure Letter; provided, further, that or its Subsidiaries who have individual employment agreements with severance or termination provisions or who participate in the Company shall consult with Parent prior to incurring Indebtedness under this clause Change of Control Severance Plan (G“Executive Employees”), (HB) Indebtedness assumed accelerate or materially increase the compensation or employee benefits of any Executive Employee, except for annual merit-based or promotion-based pay increases in the ordinary course of business, (C) establish, adopt, terminate or materially amend any Benefit Plan (other than routine changes to welfare plans or any changes to Benefit Plans that would not result in more than a de minimis increase to the Company’s costs under such Benefit Plans), including any severance benefit plan or (D) accelerate or materially increase the compensation of other employees of the Company or its Subsidiaries, except for (1) merit-based or promotion-based pay increases in the ordinary course of business, (2) acceleration or increases required by any CBA, or (3) any acceleration or increase done after consultation with Parent;
(xvii) enter into any Company Material Contract that contains a change of control or similar provision that would require a payment to any Person counterparty thereto in connection with a Sky Acquisition and refinancings the consummation of the Merger that would not otherwise be due;
(xviii) grant or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial incur any new Lien material to the Company and its Subsidiaries, taken as a whole, other than the Indebtedness being replaced (A) pledges or refinanced; provided, further, that deposits by the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) or any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement its Subsidiaries in the ordinary course of business consistent with past practice under workmen’s compensation Laws, unemployment insurance Laws or similar Laws; (B) good faith deposits in connection with a Sky Acquisition and not Contracts (other than for speculative purposes; provided that the payment of indebtedness) to which the Company shall consult with Parent prior to entering into hedging activities or one of its Subsidiaries is a party, or (C) in connection with Indebtedness securing indebtedness permitted to be incurred under the terms of this Agreement by granting or incurring Liens on the assets of the type described utility Subsidiaries of the Company, in clauses (G) or (H) aboveeach case, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;business; or
(vxix) with respect to the Retained Businessagree, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected foregoing.
(b) Nothing contained in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the Company’s capital expenditure budget for or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards Parent and the Company Stock Plansshall exercise, (B) Investment Preferred Stock (as defined in consistent with the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes terms and conditions of this Section 5.01(b)(viii);
(ix) with respect to the Retained BusinessAgreement, other than capital expenditures made in accordance with Section 5.01(b)(v) complete control and other than with respect to film supervision over its and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinSubsidiaries’ respective operations.
Appears in 4 contracts
Sources: Agreement and Plan of Merger (Exelon Corp), Agreement and Plan of Merger (Potomac Electric Power Co), Merger Agreement (Potomac Electric Power Co)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required otherwise expressly authorized by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution this Agreement or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a) 6.1 of the Company Disclosure Letter)) and except as required by applicable Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present current employees and agents.
(b) Without limiting the generality of, of Section 6.1(a) and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of hereof until the Acceptance Time and, if the 90% Requirement is satisfied at any time from and after the Acceptance Time, from and after such time that the 90% Requirement is satisfied until the Effective Time, except (A) as otherwise expressly required by this Agreement and prior to the First Effective Time Agreement, (unless B) as Parent shall otherwise may approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (by-laws or comparable other applicable governing documents) (other than amendments to the governing documents instruments of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate any Subsidiary of the Company with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions or otherwise enter into any agreements or arrangements imposing material changes or restrictions on the Company’s or any of the type contemplated by Section 5.01(b)(vii) its Subsidiaries’ assets, operations or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)businesses;
(iii) except as expressly required by issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms shares of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider capital stock of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, except in accordance with the terms of the grant of any outstanding and exercisable Company Option that was issued prior to the date of this Agreement;
(iv) except for the Company’s declaration and payment of regular quarterly cash dividends consistent with past practice and in any event not in excess of $0.52 per share with usual record and payment dates for such dividends in accordance with past dividend practice of the Company, 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;
(v) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(vi) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(vii) settle any material litigation or other material proceedings before a Governmental Entity;
(viii) (A) make or rescind any material election relating to Taxes; (B) file any amended income Tax Return or material claim for refund; (C) increase make any material change in any method of accounting, keeping of books of account or accounting practices or in any method of Tax accounting of the compensationCompany or any of its Subsidiary unless required by GAAP or applicable Law; (D) enter into or agree to any private letter ruling, bonus closing agreement or pensionsimilar ruling or agreement with the IRS or any other taxing authority or settle any audit or proceeding with respect to any material amount of Taxes owed; or (E) file its federal income Tax Return for any fiscal year ending on or after December 31, welfare 2007 without providing Parent reasonable opportunity to review and comment on such Tax Return;
(ix) except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement, or other as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits of to any director, officer or employee of the Company or any of its Subsidiaries, except in (ii) increase the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare welfare, severance or other benefits prior to such changeof, (D) increase the severance pay any bonus to, or termination payments or benefits payable make any new equity awards to any director, officer, officer or employee or other service provider of the Company or any of its Subsidiaries, (Eiii) establish, adopt, amend or terminate any Compensation Agreements and Benefit Plans or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including Compensation Agreements and Benefit Plans, to the extent not already provided in any equity-based awards)such Compensation Agreements and Benefit Plans, (Fv) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan Compensation Agreements and Benefit Plans or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP; or (Gvi) forgive forgive, grant a waiver or extension under, or amend in any loans manner adverse to the Company or one of its Subsidiaries, any extension of credit to directors or executive officers of the Company or any of its Subsidiaries;
(x) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Offer set forth in Exhibit 1 or the conditions to the Merger set forth in Article VII not being satisfied; or
(xi) agree, authorize or commit to do any of the foregoing.
(c) Without limiting the generality of Section 6.1(a) and in furtherance thereof, during any period from and after the Acceptance Time and prior to the Effective Time during which the 90% Requirement is not satisfied, except (A) as otherwise expressly required by this Agreement, (B) as Parent may approve in writing, or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(i) adopt any change in the certificate of incorporation or by-laws or other applicable governing instruments of any Subsidiary of the Company;
(ii) merge or consolidate any Subsidiary of the Company with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on the Company’s or any of its Subsidiaries’ assets, operations or businesses;
(iii) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, except in accordance with the terms of the grant of any outstanding and exercisable Company Option that was issued prior to the date of this Agreement;
(iv) except for the Company’s declaration and payment of regular quarterly cash dividends consistent with past practice and in any event not in excess of $0.52 per share with usual record and payment dates for such dividends in accordance with past dividend practice of the Company, 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;
(v) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(vi) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(vii) settle any material litigation or other material proceedings, in each case relating to any of the Transactions before a Governmental Entity;
(viii) except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, (iii) establish, adopt, amend or terminate any Compensation Agreements and Benefit Plans or amend the terms of any outstanding equity-based awards, (iv) 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 Compensation Agreements and Benefit Plans, to the extent not already provided in any such Compensation Agreements and Benefit Plans, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Compensation Agreements and Benefit Plans or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive, grant a waiver of extension under, or amend in any manner adverse to the Company or one of its Subsidiaries, any extension of credit to directors or executive officers of the Company or any of its Subsidiaries;
(ix) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(x) agree, authorize or commit to do any of the foregoing.
(d) Prior to making any written or oral communications to the directors, officers or employees of the Company or any of its Subsidiaries;Subsidiaries pertaining to compensation or benefit matters that are affected by the Transactions, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(ive) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) Parent shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company knowingly take or permit any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have take any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which action that is not covered by insurance is less than $100,000,000) reasonably likely to prevent or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin.
Appears in 3 contracts
Sources: Agreement and Plan of Merger (Bank of Tokyo - Mitsubishi Ufj, LTD), Merger Agreement (Unionbancal Corp), Merger Agreement (Mitsubishi Ufj Financial Group Inc)
Interim Operations. (a) The Pursuant to the Merger Agreement, the Company covenants and agrees as to itself and its Subsidiaries has agreed that, from and after except as expressly contemplated by the execution of this Merger Agreement and or agreed to in writing by Parent, prior to the First Effective Time (unless time the directors of the Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) constitute a majority of the Company Disclosure Letter)Board, the Company shall, and shall cause each of its Subsidiaries 22 to, (a) conduct its operations in all material respects according to their ordinary and usual course of business in substantially the same manner as conducted prior to the date of the Merger Agreement; (b) use its reasonable best efforts to conduct preserve intact its business organization in all material respects, keep available the Retained Business services of its executive officers and key employees as a group, subject to changes in the ordinary course, and maintain satisfactory relationships with suppliers, distributors, customers and others having business relationships with them; (c) confer at such times as Parent may reasonably request with one or more representatives of Parent to report material operational matters and the general status of ongoing operations (in each case to the extent Parent reasonably requires such information) and consult with Parent regarding material operational decisions; (d) promptly notify Parent of any emergency or other change in the normal course of its businesses or in the operation of its properties and of any complaints, investigations or hearings (or communications indicating that the same may be contemplated) of any governmental body or authority; (e) not authorize or pay any dividends on or make any distribution with respect to its outstanding shares of stock; (f) not, except as otherwise contemplated by the Merger Agreement or as may be required by applicable law, enter into or amend any employment, severance or similar agreements or arrangements with any of their directors or executive officers; (g) not, subject to the provisions described below under the heading "No Solicitation," authorize, announce an intention to authorize, or enter into an agreement with respect to, any merger, consolidation or business combination other than the Merger, any acquisition of a material amount of assets or securities, any disposition of a material amount of assets or securities or any release or relinquishment of any material contract rights, in each case, not in the ordinary course of business; (h) not propose or adopt any amendments to its corporate charter or by-laws, except pursuant to the Merger as provided in the Merger Agreement; (i) not issue any shares of capital stock, except upon exercise of options previously issued pursuant to existing employee plans, programs or arrangements and non-employee director plans; (j) not grant, confer or award any options, warrants, conversion rights or other rights not existing on the date of the Merger Agreement, to acquire any shares of its capital stock; (k) not purchase, redeem, or offer to purchase or redeem any shares of its stock or any securities convertible into or exchangeable for shares of stock, except for the deemed repurchase of options in accordance with the terms of the Merger Agreement, or purchases, redemptions and offers to purchase in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation employee incentive and the Distribution) benefit plans, programs or (3) otherwise expressly disclosed arrangements in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect existence on the date of this the Merger Agreement; (l) not, except as contemplated by the Merger Agreement (or as modified after may be required by applicable law, amend in any material respect the terms of its employee benefit plans, programs or arrangements or any severance or similar agreements or arrangements in existence on the date of this Agreement in accordance with the terms of this Merger Agreement) , enter into or (2) purchasesamend any employment or consulting agreement, repurchasesadopt or enter into any new employee benefit plans, redemptions programs or other acquisitions of securities arrangements or any severance or similar agreements or arrangements or increase the base salary of any wholly owned Subsidiary person who is a party to a Change of the Company by the Company Control Employment Agreement or make any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with payments under any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses benefit plan to any director, officeremployee, employee independent contractor or other service provider of the Company or any of its Subsidiaries, consultant (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business and in amounts and in a manner consistent with past practice with respect or as otherwise required by law or the provisions of such benefit plan); (m) not (i) enter into any material loan agreement or incur any indebtedness in excess of an aggregate of $100,000 or amend any Company credit facility to (1) employees below increase the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeamount that may be borrowed thereunder, (Dii) increase make or enter into any agreement or contract for capital expenditures in excess of $50,000, (iii) enter into any lease for real property in excess of $50,000 or any lease for personal property in excess of $20,000, or (iv) enter into any agreement or contract outside of the severance or termination payments or benefits payable to any director, officer, employee or other service provider ordinary course of business of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting Company's subsidiaries that involves performance of services or payment delivery of compensation goods or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan materials by or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of the Company's subsidiaries of an amount or value in excess of $50,000; (n) not make or change any material Tax election, file any amendment to any federal income Tax Return unless required by law, enter into any closing agreement, or settle or compromise any material Tax liability; (o) not adjust, split, combine or reclassify its Subsidiaries;
capital stock; (ivp) incur not enter into any Indebtedness agreement, understanding or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except arrangement with respect to the Bridge Facilitysale or voting of its capital stock; (q) not create any new subsidiaries; (r) except as required by the Merger Agreement, in replacement of, not take any action which could reasonably be expected to adversely affect or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to delay the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date ability of any of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) parties to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at obtain any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements approval of any such refinancing governmental or replacement Indebtednessregulatory body required to consummate the transactions contemplated thereby; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (Gs) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings directly or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Businessindirectly sell, transfer, lease, license, sell, assign, let lapse, abandon, cancelpledge, mortgage, pledge, place a Lien upon encumber or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses property or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less assets other than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event of business; (other than transactions among the Company and its wholly owned Retained Subsidiaries), (Dt) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that wouldfinancial derivative contracts; (u) not change in any material respect its accounting policies, methods or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
procedures except as required by GAAP; (xv) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinexcept as may 23
Appears in 3 contracts
Sources: Offer to Purchase (Falcon Products Inc /De/), Offer to Purchase (Falcon Products Inc /De/), Offer to Purchase (Shelby Williams Industries Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Wax Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Wax Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Wax Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Holdco, Parent and its their Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinincluding s
Appears in 3 contracts
Sources: Agreement and Plan of Merger (Fox Corp), Agreement and Plan of Merger (Walt Disney Co/), Agreement and Plan of Merger (Twenty-First Century Fox, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after From the execution date of this Agreement and prior to until the First earlier of the Effective Time and the termination of this Agreement, and except (unless i) as required or expressly permitted or contemplated by this Agreement, (ii) as required by applicable Law, (iii) as set forth in Section 5.1(c), (iv) as consented to in writing by Parent shall otherwise approve in writing, (which approval consent shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3v) otherwise expressly disclosed as set forth in Section 5.01(a) 5.1 of the Company Disclosure Letter), the Schedule:
(a) The Company shall, and shall cause each of its Subsidiaries toto (provided, with respect to non-Wholly Owned Subsidiaries, Company shall cause such Subsidiaries to the extent within its reasonable control), use its and their respective reasonable best efforts to (x) conduct the Retained Business its business in all material respects in the ordinary course of business consistent with past practicebusiness, and the Company shall, and shall cause each of its Subsidiaries to, solely (y) to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, Entities and key customers, suppliers, distributors, licensors, creditors, lessors, employees (including any labor union, labor organization, works council or other similar organization) and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ their present officers, key employees and agents.
workforce (b) Without limiting the generality ofincluding any directors), and (z) maintain in furtherance offorce and enforce internal policies, the foregoing, the Company covenants procedures and agrees controls (as updated or amended from time to itself and its Subsidiaries that, from and after the date of this Agreement and prior time) designed to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by ensure compliance with applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
; provided that (i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation no action or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company inaction by the Company or any other wholly owned Subsidiary of the Companyits Subsidiaries with respect to any matters specifically permitted by any portion of Section 5.1(b) shall be deemed a breach of this Section 5.1(a) unless such action or inaction would constitute a breach of such portion of Section 5.1(b);
; and (ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider failure of the Company or any of its SubsidiariesSubsidiaries to take any action prohibited by Section 5.1(b) shall in no circumstances be deemed a breach of this Section 5.1(a);
(b) The Company shall not, and shall cause its Wholly Owned Subsidiaries not to (C) increase the compensationprovided, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to non-Wholly Owned Subsidiaries, the Company shall instruct its directors and officers of such Subsidiary to use their reasonable best efforts to cause such Subsidiaries not to, the extent within their reasonable authority and control):
(1i) employees below the level amend its or their respective Organizational Documents;
(ii) adopt a plan of Executive Vice President and (2) employees at complete or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationpartial liquidation, bonus or pensiondissolution, welfare merger, restructuring, recapitalization, or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees reorganization of the Company or any of its Subsidiaries;
(iviii) incur acquire (including by acquisition of equity (including any Indebtedness debt securities convertible into equity) or issue assets) any warrants business, Person, equity interest in any Person, material properties or material assets, other rights to acquire any Indebtedness, except than (A) acquisitions of inventory or other goods or services in the ordinary course of business consistent with past practice or (B) solely in a principal amount the case of acquisitions of properties or assets (but not to exceed businesses, Persons or equity interests), acquisitions (x) for consideration not in excess of $400,000,000 5,000,000 in any individual transaction or series of related transactions or $15,000,000 in the aggregate at in any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years twelve (12)-month period after the date of this Agreement or (y) expressly contemplated by the Contract evidencing such IndebtednessCompany’s then-current capital budget described in or adopted in accordance with the terms of Section 5.1(b)(x);
(iv) transfer, (B) except with respect sell, lease, license, abandon, cancel, allow to the Bridge Facility, in replacement oflapse, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to otherwise dispose of any material assets of the Company and or any of its Subsidiaries, taken as or incur, permit or suffer to exist the creation of any material Encumbrance (other than a whole, than the Indebtedness being replaced or refinanced, and Permitted Encumbrance) upon any such assets (in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednesscase, excluding Intellectual Property Rights), except (CA) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into for inventory in the ordinary course of business consistent with past practice, (EB) commercial paper issued for obsolete assets in the ordinary course of business consistent with past practice practice, (C) for properties or assets with a fair market value not in a principal amount not to exceed excess of $250,000,000 5,000,000 individually, or $15,000,000 in the aggregate at in any time outstandingtwelve (12)-month period after the date of this Agreement, or (FD) Indebtednesspursuant to existing contractual rights or obligations in effect prior to the date of this Agreement and made available to Parent or its outside legal counsel prior to the date of this Agreement;
(v) transfer, the proceeds sell, lease, license, abandon, cancel, allow to lapse, or otherwise dispose of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations material Intellectual Property Rights of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, includingor incur, following permit or suffer to exist the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements creation of any material Encumbrance (other than a Permitted Encumbrance) upon, any such refinancing material Intellectual Property Rights, except (A) the lapse or replacement Indebtedness; provided that expiration of Registered Owned IPR at the aggregate principal amount end of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and natural term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (HB) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing non-exclusive licenses granted in the ordinary course of business consistent with past practice;
(vvi) issue, sell, dispose of, grant, transfer, encumber or otherwise enter into any Contract with respect to the Retained Businessvoting of, any equity interests of the Company or any of its Subsidiaries, convertible or exchangeable securities in respect of such equity interests, or any options, warrants or other than with respect rights of any kind to acquisitions of businessesacquire any such equity interests or such convertible or exchangeable securities in each case, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with any such transaction or action by a Wholly Owned Subsidiary of the repair Company to the Company or replacement between or among Wholly Owned Subsidiaries of facilitiesthe Company, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) issuances in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms, (C) grants of Company Equity Awards after the date of this Agreement as permitted by Section 5.1(b)(xx) without violation of this Agreement, or issuances in respect of such Company Equity Awards in accordance with their terms, (D) as permitted by Section 5.1(b)(ix), (E) pursuant to, or rights granted under, the Company Exchangeable Notes in effect as of the date of this Agreement or (F) pursuant to the ESPP in accordance with its terms as of the date of this Agreement and in compliance with Section 2.3(d);
(vii) (A) make any loans or advances to, or provide any guarantees on behalf of, any Person (other than to or from the Company and any of its Wholly Owned Subsidiaries or between or among any of its Wholly Owned Subsidiaries) in excess of $2,000,000 individually, or $5,000,000 in the aggregate in any twelve (12)-month period after the date of this Agreement, other than pursuant to existing contractual obligations in effect as of the date of this Agreement and made available to Parent prior to the date of this Agreement, (B) cancel, modify or waive any Indebtedness or other amounts owed to the Company or any of its Subsidiaries having in each case a value in excess of $2,000,000 individually, or $5,000,000 in the aggregate in any twelve (12)-month period after the date of this Agreement, other than in the ordinary course of business consistent with past practice or Indebtedness or other amounts owed between or among the Company and any of its Subsidiaries in the ordinary course of business, or (C) incur any Indebtedness in excess of $10,000,000 individually or $25,000,000 in the aggregate not in excess any twelve (12)-month period after the date of 120% this Agreement, assume or guarantee the Indebtedness of any other Person (other than the Company or any of its Subsidiaries), or make any voluntary prepayment in respect of any Indebtedness in each case of this clause (C), other than (1) intercompany borrowings, (2) capital or finance leases entered into after the date hereof in the ordinary course of business or (3) under surety or performance bonds and letters of credit in existence as of the amounts reflected date hereof and made available to Parent prior to the date of this Agreement or entered into in the Company’s capital expenditure budget for each ordinary course of 2017business and without violation of Section 5.1(b)(xi);
(viii) declare, 2018 and 2019 set forth in Section 5.01(b)(v) aside or pay any dividend or other distribution, with respect to any securities of the Company Disclosure Letteror its Subsidiaries, other than dividends or other distribution paid by any Wholly Owned Subsidiary of the Company to the Company or to any other Wholly Owned Subsidiary of the Company;
(viix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or enter into any agreement to do any of the foregoing with respect to any equity interests of the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon Company or otherwise dispose any Subsidiary of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses the Company or ordinary course security interests securities convertible or exchangeable in connection with the production or financing respect of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licensessuch equity interests, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) salesto satisfy applicable Tax withholding or exercise prices upon vesting, leases, licenses settlement or other dispositions exercise of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units Equity Award outstanding on the date of this Agreement in accordance with or granted after the existing terms date of such awards and the Company Stock Plansthis Agreement as permitted by Section 5.1(b)(xx), (B) Investment Preferred Stock (repurchases of shares of capital stock as defined in permitted under any Company Equity Award outstanding on the Bridge Facilitydate of this Agreement or granted after the date of this Agreement as permitted by Section 5.1(b)(xx) or (C) by wholly owned any such transactions solely involving Wholly Owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ixx) with respect to the Retained Business(A) authorize any new capital expenditures, in each case, other than (I) for capital expenditures made first authorized in accordance 2024, as contemplated by the Company’s existing capital budget for calendar year 2024 set forth in Section 5.1(b)(x)(A) of the Company Disclosure Schedule, (II) for capital expenditures first authorized in calendar year 2025, as contemplated by the Company’s capital budget for calendar year 2025 so long as such 2025 capital budget allocates capital expenditures substantially consistently with Section 5.01(b)(vthe Company’s 2024 capital budget, does not exceed the Company’s 2024 capital budget by more than five percent (5%) and is delivered to Parent by no later than February 1, 2025, or (III) any unbudgeted capital expenditures not to exceed $10,000,000 individually, or $25,000,000 in the aggregate in any twelve (12)-month period after the date of this Agreement, or (B) fail to make material capital expenditures expressly contemplated by the Company’s capital budget then in effect, except to the extent that the Company determines, in good faith after consultation with Parent, that delaying such capital expenditure or utilizing the amounts otherwise budgeted for such capital expenditure for other purposes is reasonably necessary under the circumstances existing at any time;
(xi) other than with respect to film and television production and programming or video game productionContracts relating to the activities described in any other clause of this Section 5.1(b), which is subject shall be governed by those respective clauses, enter into any Contract that would have been a Company Material Contract had it been entered into prior to Section 5.01(b)(xthe date of this Agreement (including by amending any Contract in a manner that would make such Contract a Company Material Contract), spend other than any Contract of the type described in Section 3.11(a)(ii) (solely with respect to Contracts with a Company Top Supplier), Section 3.11(a)(iii) (excluding any fixed-price Contracts), Section 3.11(a)(iv) (excluding any Material Company Bid for a fixed-price Contract), Section 3.11(a)(v) (excluding any Contract of a type required to be disclosed under any other clause of Section 3.11(a)), Section 3.11(a)(vi) (solely with respect to personal property) or commit Section 3.11(a)(xi) (solely with respect to spend customer or supplier Contracts containing customary indemnification obligations), in excess of (A) $25,000,000 if the transaction each case, that is not entered in the ordinary course of business consistent with past practice, in each case; provided that such Contract does not provide that the Transactions or any divestiture of any businesses, assets, properties, product lines, programs, projects and equity or other business interests of the Company and its Subsidiaries in connection with the Transactions would constitute a breach or default thereunder or permit the termination, acceleration, or creation of any right or obligation thereunder, or result in the creation of an Encumbrance on any of the rights, properties or assets of the Company or any of its Subsidiaries pursuant thereto or otherwise prevent, materially impair, or materially delay the ability of the Parties to consummate the Transactions;
(xii) assign, terminate, fail to renew, materially amend or waive any material rights under any Company Material Contract (other than non-renewals, non-material amendments or non-material waivers in the ordinary course of business);
(xiii) amend, terminate or allow to lapse any material Company License held by the Company or any of its Subsidiaries in a manner that materially and adversely impacts the ability of the Company and its Subsidiaries to conduct their respective businesses;
(xiv) except in the ordinary course of business consistent with past practice or for which replacement insurance is to be obtained on substantially equivalent terms, voluntarily terminate, cancel or modify any material third-party insurance policies;
(xv) other than any Transaction Litigation, which shall be governed exclusively by Section 5.14, settle or compromise any Proceeding (A) for an amount in excess of $50,000,000 in any event or (B) $50,000,000 individually 15,000,000 individually, or $200,000,000 30,000,000 in the aggregate in any yeartwelve (12)-month period after the date of this Agreement (net of any insurance proceeds or indemnity, contribution or similar payments received by the Company or any Wholly Owned Subsidiary of the Company in respect thereof, or amounts reserved for such matters in the consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2023 by the Company or such Wholly Owned Subsidiary), (B) which involves any criminal liability of the Company or any of its Wholly Owned Subsidiaries, (C) which results in any non-monetary obligation or binding precedential effect that is material to the Company and its Subsidiaries (taken as a whole) or would be binding on Parent’s or its Subsidiaries’ operations after the Closing or (D) that is a stockholder derivative Proceeding or a Proceeding commenced by a Governmental Entity;
(xvi) make any material changes with respect to any financial accounting policies or procedures, in each case case, except as required by GAAP or SEC rules or policies (or any interpretation thereof) or any regulatory accounting requirements (or any interpretation thereof) or any Governmental Entity (including the Financial Accounting Standards Board or any similar organization);
(xvii) write up, write down or write off the book value of any material assets of the Company or any of its Subsidiaries, except to acquire the extent required by GAAP as consistently applied by the Company since the Applicable Date;
(xviii) enter into any businessnew line of business that is not incidental to, whether by mergeror an iteration, consolidationextension, purchase natural evolution, expansion or advancement of, the lines of property business of the Company or assets, licenses or otherwise (valuing any non-cash consideration at of its fair market value Subsidiaries as of the date of this Agreement;
(xix) (A) make (other than in the agreement for such acquisitionordinary course of business); provided that neither the Company nor , change or revoke any of its Retained Subsidiaries shall material Tax election, (B) change any material Tax accounting period or method, (C) file any material amended Tax Return, (D) enter into any such transaction closing agreement with respect to material Taxes, (E) settle any material Tax claim, audit, assessment or dispute, (F) enter into any material Tax indemnification, sharing, allocation reimbursement or similar agreement, arrangement or understanding, (G) initiate any voluntary Tax disclosure or Tax amnesty or similar filings with any Taxing Authority with respect to U.S. state or local Taxes and other than in connection with the CAP Program, (H) fail to timely file any material Tax Returns (taking into account any extension of time within which to file) or pay any Tax that wouldbecomes due and payable (other than Taxes that are being contested in good faith in appropriate proceedings and for which appropriate reserves have been established to the extent required by GAAP), or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions(I) surrender any right to claim a material Tax refund;
(xxx) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date hereof, any Company Labor Agreement (as may be amended pursuant to this Agreement), or as otherwise required by applicable Law, (A) increase the compensation or consulting fees, bonus, pension, welfare, fringe or other than capital expenditures made benefits, severance or termination pay of any Company Employee, except for (1) increases in accordance annual base salary or wage rate in the ordinary course of business consistent with Section 5.01(b)(vpast practice that do not exceed five percent (5%) and other than purchases and licenses of film and television and production programming (includinin the aggregate or
Appears in 3 contracts
Sources: Merger Agreement (Boeing Co), Merger Agreement (Spirit AeroSystems Holdings, Inc.), Merger Agreement (Boeing Co)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First earlier of the termination of this Agreement or the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable LawLaws, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and its business shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business be conducted in the ordinary and usual course of business consistent with past practiceand, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it shall use its commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present executive officers or key employees and agents.
(b) of the Company. Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly required or expressly permitted by this Agreement, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed), and which determination shall take into account the Company Overview Presentation, and except (C) as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3D) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries towill not:
(ia) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws or other applicable governing instruments;
(b) merge or comparable governing documentsconsolidate the Company with any other Person or restructure, reorganize or completely or partially liquidate;
(c) (acquire assets or any securities of any business from any other Person, in any transaction or series of related transactions, other than amendments (i) acquisitions pursuant to the governing documents of any Subsidiary Contracts in effect as of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)date of this Agreement, (Bii) splitacquisitions with a value or purchase price in the aggregate of less than $200,000, combineor (iii) acquisitions of inventory, subdivide supplies, and other purchases in the ordinary course of business;
(d) issue, sell, pledge, dispose of, grant, transfer, encumber, or reclassify its outstanding authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock (except of the Company, or securities convertible or exchangeable into or exercisable for any shares of such transaction by a wholly owned subsidiary capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than required issuances of shares of Company Common Stock upon the exercise of Company Stock Options outstanding as of the date of this Agreement;
(e) create or incur any Lien material to the Company on any assets of the Company which remains having a wholly owned Subsidiary after consummation value in excess of such transaction)$100,000 in the aggregate;
(f) make any loans, advances or capital contributions to or investments in any Person in excess of $100,000 in the aggregate;
(Cg) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(h) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock;
(other than (1i) pursuant to the forfeiture ofincur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units issue or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (sell any debt securities or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions warrants or other acquisitions of securities of rights to acquire any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary debt security of the Company);
, except for (iii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken indebtedness for purposes of replacing, renewing or extending a broadly applicable material Company Plan borrowed money incurred in the ordinary course of business consistent with past practices not to exceed $100,000 in the aggregate, (ii) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, or (iii) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $100,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $100,000 in the aggregate during any 12 month period;
(k) enter into any Contract, other than a Customer Contract, that does not materially increase is reasonably likely to require aggregate annual payments to or from the cost Company of more than $250,000 or that is reasonably likely to require aggregate payments to or from the company of more than $500,000;
(l) enter into any Contract, other than a Customer Contract, that would have been a Material Contract had it been entered into prior to this Agreement;
(m) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(n) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $100,000 (net of insurance coverage) or any obligation or liability of the Company in excess of such Company Plan amount;
(o) amend, modify or benefits provided terminate any Material Contract, or cancel, modify or waive any debts or claims held by it under such Company Plan based on any Material Contract or waive any rights under any Material Contract;
(p) make or change any Tax election, change an annual accounting period, file any amended Tax Return, enter into any closing agreement, waive or extend any statute of limitation with respect to Taxes, settle or compromise any Tax liability, claim or assessment, surrender any right to claim a refund of Taxes or take any other similar action relating to the cost on filing of any Tax Return or the payment of any Tax;
(q) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company, except for product sales in the ordinary course of business, sales of obsolete assets or sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $100,000 the aggregate, other than pursuant to Contracts in effect prior to the date hereofof this Agreement;
(r) except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement and set forth in Section 5.1(h)(i) of the Company Disclosure Letter, (Bi) grant or provide any transaction severance or retention bonuses termination payments or benefits to any director, officer, employee or other service provider of the Company or any of its SubsidiariesCompany, (Cii) increase the compensation, bonus or pension, welfare welfare, severance or other benefits of of, pay any directorbonus to, officer or employee of the Company or make any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable new equity awards to any director, officer, employee or other service provider of the Company or any of its SubsidiariesCompany, (Eiii) establish, adopt, amend or terminate any Company Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including Benefit Plan, to the extent not already provided in any equity-based awards)such Company Benefit Plan, (Fv) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP, or (Gvi) forgive any loans to directors, officers or employees of the Company or any of its SubsidiariesCompany;
(ivs) incur take any Indebtedness action or issue omit to take any warrants or other rights action that is reasonably likely to acquire result in any Indebtedness, except (A) in of the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial conditions to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, Merger set forth in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness Article VIII not being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposessatisfied; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;or
(vt) with respect to the Retained Businessagree, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 3 contracts
Sources: Merger Agreement (Visicu Inc), Merger Agreement (Sterling Venture Partners L P), Merger Agreement (Cardinal Health Partners Lp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except Except as (1x) required by applicable Law, (2y) otherwise expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) this Agreement or (3z) otherwise expressly disclosed set forth in Section 5.01(a) 6.1 of the Company Disclosure Letter, the Company covenants and agrees that, after the date hereof and until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business their business in the ordinary course of business consistent with past practicepractice and in compliance with all applicable Laws and, and to the Company extent consistent therewith, it shall, and shall cause each of its Subsidiaries toSubsidiaries, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially their respective reasonable best efforts to preserve the Retained Business’ organization their material business organizations intact and maintain the Retained Business’ in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) associates. Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First earlier of the Effective Time or the termination of this Agreement in accordance with its terms, except as (unless Parent shall A) required by applicable Law or as contemplated by the Scheme Document Annex, (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned delayed or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distributionconditioned) or (3D) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall not permit any of will cause its Subsidiaries not to:
(i) except amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other applicable governing documents;
(ii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with respect any other Person or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries;
(iii) acquire (by merger, scheme of arrangement, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any assets constituting a division or business line of any Person or any equity interests of any Person or enter into any joint venture or similar arrangement;
(iv) issue, sell, pledge or otherwise encumber or subject to SpinCo and any Lien (whether through the SpinCo issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), dispose of, grant, transfer, or authorize the issuance, sale, pledge, encumbrance or subjecting to any Lien, disposition, grant or transfer of any shares of capital stock of the Company (including Ordinary Shares) or any of its Subsidiaries or any Company Securities or Other Subsidiary Securities (other than in the case of clause (A)), (A) amend its certificate the issuance of incorporation or bylaws Ordinary Shares upon the vesting of Company RSUs (or comparable governing documentsand dividend equivalents thereon, if applicable) (other than amendments outstanding prior to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)date hereof, (B) splitthe issuance of Ordinary Shares pursuant to the Company ESPP, combine, subdivide or reclassify its outstanding shares of capital stock (except for any but only with respect to elections made prior to the date hereof and only in accordance with such transaction by a wholly owned subsidiary Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company which remains a wholly owned Subsidiary after consummation shall not allow the commencement of such transactionany new offering periods under the Company ESPP), (C) declarein connection with the Comcast Warrants or Charter Warrants (including exercise thereof), set aside each as in effect as of the date hereof or pay any dividend (D) the issuance or distribution payable in cash, transfer of common stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid other equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary in the ordinary course of business and in a manner that would not have any material Tax consequences);
(v) make or forgive any loans, advances or capital contributions to or investments in any Person (other than to any direct or indirect wholly owned Subsidiary of the Company in the ordinary course of business and in a manner that would not have any material Tax consequences) other than extending trade credit to another customers and advancing business expenses to employees, in each case, in the ordinary course of business consistent with past practice;
(vi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its shares or other equity interests (except for cash dividends paid by any direct or indirect wholly owned Subsidiary of to the Company or to any other direct or indirect wholly owned Subsidiary in the Company ordinary course of business consistent with past practice) or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stockstock or other equity interests;
(vii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock stock, Company Securities or any securities convertible or exchangeable into or exercisable for any shares of its capital stock Other Subsidiary Securities (other than (1) pursuant the acquisition of any Ordinary Shares tendered by current or former employees or directors in order to the forfeiture of, or withholding of pay Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and connection with the terms vesting of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the CompanyRSUs);
(iiviii) merge incur any Indebtedness or consolidate guarantee such Indebtedness of another Person (except with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions respect to obligations of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company in the ordinary course of business and in a manner that would not preventhave any material Tax consequences), materially delay or materially impair issue or sell any debt securities or warrants or other rights to acquire any debt security of the Transactions)Company or any of its Subsidiaries, except for (A) Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(iiiix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except as expressly required by any Company Plan as in effect on the date hereof: for (A) establishexpenditures set forth in the current capital forecast set forth in Section 6.1(a)(ix) of the Company Disclosure Letter or (B) expenditures made in response to any emergency, adoptwhether caused by war, amend terrorism, weather events, public health events, outages, operational incidents or terminate otherwise;
(x) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(xi) except with respect to any litigation, audit, claim, action or other Proceeding related to Tax Returns or any Tax Liability (which, for the avoidance of doubt, shall be governed by Section 6.1(a)(xii)) and subject to Section 6.17, settle or compromise any litigation, audit, claim, action or other Proceedings against the Company Plan or amend the terms any of its Subsidiaries other than settlements or compromises of any outstanding equity-based awards litigation, audit, claim, action or other Proceedings where (A) the amount paid in settlement or compromise does not exceed $25 million individually or $100 million in the aggregate (including for such purpose a reasonable estimate of anticipated royalties or similar obligations) or (B) the amount paid in settlement does not exceed the amount reserved against such matter in the most recent financial statements (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof and, in each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the Company or any of its Subsidiaries other than the payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any such action taken material Tax election, file any material amended income Tax Return, settle or compromise any material amount of Tax Liability, enter into any closing agreement with respect to any material amount of Tax or surrender any right to claim a refund for purposes a material amount of replacingTax;
(xiii) transfer, renewing sell, lease, license, mortgage, pledge or extending otherwise encumber or subject to a broadly applicable material Lien (other than a Permitted Lien), surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company Plan or its Subsidiaries, with a value in excess of $50 million in the aggregate, except for (A) sales and non-exclusive licenses of products and services of the Company and its Subsidiaries in the ordinary course of business, (B) any abandonment of Intellectual Property that the Company or any Subsidiary determines in the exercise of its reasonable business judgment to abandon in the ordinary course of business, (C) dispositions of obsolete or worthless assets, (D) non-renewal of any lease of real property that has expired by its terms or the termination of a lease of real property that is not a Material Lease and (E) transfers among the Company and its wholly owned Subsidiaries in the ordinary course of business;
(xiv) (A) grant, increase or provide any retention, change of control, severance or termination payments or benefits to any director, consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost as required by agreements, plans, programs or arrangements in effect on the date hereof, (B) grant or provide increase in any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase manner the compensation, bonus or pensionbenefits of, welfare or other benefits of make, grant or amend in any respect any equity or equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, officer consultant or employee of the Company or any of its Subsidiaries, except (1) in the case of employees or consultants who are not executive officers of the Company, in the ordinary course of business consistent with past practice with respect to (1) employees below or as is not material in the level of Executive Vice President aggregate and (2) in the case of employees at or above who are executive officers of the level of Executive Vice President Company, increases in respect of base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeare consistent with past practice, (DC) increase except as required by Law or as required by agreements, plans, programs or arrangements in effect on the severance date hereof, establish, adopt, terminate or termination payments amend any Benefit Plan (other than routine changes to welfare plans or benefits payable to any director, officer, employee the Pension Plan made in the ordinary course of business consistent with past practice) or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of any compensation or benefits under equity for the benefit of any Company Person or funding of any Benefit Plan (including any equity-based awardsexcept (x) as required in connection with the termination of the Arris Group, Inc. Pension Plan as contemplated on the date hereof or (y) pursuant to the terms thereof as in effect on the date hereof), (FD) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP or (GE) forgive except as required by Law, establish, adopt, enter into or amend any loans to collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees of the Company or any of its Subsidiariestheir beneficiaries; provided, however, that notwithstanding anything to the contrary in the foregoing clauses (A)-(E), the Company shall not, and shall not permit any Subsidiary, without the prior written consent of Buyer, to issue any new Company RSUs (including Phantom Company RSUs), options, stock appreciation rights, performance units, restricted shares (or equity) or other equity-based or equity-related awards or other similar arrangements;
(ivxv) incur grant a license of any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly material Intellectual Property owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of by the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, other than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(vxvi) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership interest, excluding any such lapse or abandonment made by the Company or any Subsidiary thereof in the exercise of its reasonable business judgment;
(xvii) enter into any transaction with respect any Affiliate of the Company (other than any of its Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for payments by or to the Retained BusinessCompany or any Subsidiary thereof in excess of $120,000, other than with respect the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to acquisitions of businesses, which is subject or give rise to Section 5.01(b)(ix), and any rights (other than with respect notice) to film and television production and programming (including sports rights) with third such other party or parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or replacement announce the planning of facilitiessuch a program that would constitute a “mass layoff” or “plant closing” (as defined under the Worker Adjustment and Retraining Notification Act of 1988 and similar state and local Laws);
(xx) implement any broad-based early retirement plan or announce the planning of such a program;
(xxi) enter into any new line of business outside of its existing business or renew or enter into any non-compete or exclusivity agreement that would restrict or limit, properties in any material respect, the operations of the Company or assets destroyed any of its Subsidiaries;
(a) other than new Contracts with customers or damaged due suppliers in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) this Agreement or (Bb) other than in the ordinary course of business consistent with past practice and or expirations of any such Contract in the aggregate not ordinary course of business consistent with past practice in excess accordance with the terms of 120% such Contract, amend, modify, supplement, waive, terminate, assign, convey, subject to a Lien or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract;
(xxiii) other than renewals in the ordinary course of business, amend, modify, terminate, cancel or let lapse a material insurance policy (or reinsurance policy) or self-insurance program of the amounts reflected Company or its Subsidiaries in effect as of the date hereof, unless simultaneous with such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed policies for substantially similar premiums, as applicable, are in full force and effect;
(xxiv) not exercise any rights under Section 5 or Section 6 of the Company’s current articles of association or otherwise adopt or implement any “poison pill” or other shareholder rights plan (or otherwise issue any Rights (as defined in the Company’s capital expenditure budget for current articles of association) or similar interests or rights); or
(xxv) agree, authorize or commit to do any of the foregoing.
(b) Neither Buyer nor Company shall knowingly take or permit any of their Subsidiaries to take any action that is reasonably likely to prevent or materially interfere with the consummation of the transactions contemplated by this Agreement.
(c) The Company shall use its reasonable efforts to cause to be delivered to Buyer at the Closing (i) executed affidavits dated as of the Closing Date in accordance with Treasury Regulation Section 1.897-2(h)(2), certifying that an interest in each of 2017the Company and Arris US Holdings Inc. is not, 2018 and 2019 set forth has not been within the five (5) year period described in Section 5.01(b)(v897(c)(1) of the Code, a U.S. real property interest within the meaning of Section 897(c) of the Code and which sets forth the Company’s and Arris US Holdings Inc.’s name, address and taxpayer identification number, and (ii) executed affidavits dated as of the Closing Date from each Subsidiary listed in Section 6.1(c) of the Company Disclosure Letter;
Letter (vi) with respect as such schedule may be reasonably amended prior to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained SubsidiariesClosing Date), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property certifying that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of each such Subsidiary does not own any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of U.S. real property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includini
Appears in 3 contracts
Sources: Bid Conduct Agreement, Bid Conduct Agreement (ARRIS International PLC), Bid Conduct Agreement (CommScope Holding Company, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after From the execution date of this ------------------ Agreement and prior to until the First Effective Time (unless Parent shall otherwise approve in writingClosing Time, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a) 5.1 of the Company Disclosure Letter)Schedule or as expressly contemplated by any other provision of this Agreement, unless the Parent has consented in writing thereto, the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries subsidiaries to:
(ia) except with respect to SpinCo conduct its business and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing operations only in the ordinary course of business consistent with past practice;
(vb) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with respect to the Retained Businesscustomers, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), suppliers and other than persons having business dealings with respect them;
(c) use reasonable efforts to film keep in full force and television production effect adequate insurance coverage and programming maintain and keep its properties and assets in good repair, working order and condition, normal wear and tear excepted;
(including sports rightsd) with third parties not amend or video game productionmodify its respective charter or certificate of incorporation, which is subject to by-laws, partnership agreement or other charter or organization documents;
(e) except as required under Section 5.01(b)(x)2.1, make not authorize for issuance, issue, sell, grant, deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital expenditures stock of the Company or any of its subsidiaries or any other equity or voting security or equity or voting interest in the Company or any of its subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of Shares upon exercise of Company Stock Options granted prior to the date of this Agreement to directors, officers, employees and consultants of the Company in accordance with the Company Stock Plan as currently in effect);
(Af) not (i) split, combine or reclassify any shares of its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock, (ii) in connection with solely the repair case of the Company, declare, set aside or replacement pay any dividends on, or make other distributions in respect of, any of facilitiesthe Company's stock, properties or assets destroyed (iii) except as required under Section 2.1, repurchase, redeem or damaged due otherwise acquire, or agree or commit to casualty repurchase, redeem or accident otherwise acquire, any shares of stock or other equity or debt securities or equity interests of the Company or any of its subsidiaries;
(if covered by insurance g) not amend or if otherwise modify the portion terms of any Company Stock Options or the Company Option Plan, the effect of which that is shall be to make such terms more favorable to the holders thereof or persons eligible for participation therein;
(h) other than regularly scheduled seniority increases in the ordinary course of business consistent with past practice, not covered increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries, or grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer of the Company or any of its subsidiaries, or establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee of the Company of any of its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by insurance is less than $100,000,000merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other person outside the ordinary course of business consistent with past practice or any interest in any real properties (whether or not in the ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue or sell any notes, bonds, debentures, debt instruments, evidences of indebtedness or other debt securities of the Company or any of its subsidiaries or any options, warrants or rights to purchase or acquire any of the same, except for (Bi) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $100,000 in the aggregate; and (ii) advances, loans or other indebtedness in the ordinary course of business consistent with past practice and in the an aggregate amount not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letterto exceed $100,000;
(vik) with respect to the Retained Business, transfernot sell, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon encumber or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses of, or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect agree to the Retained Business, transfersell, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon encumber or otherwise dispose of of, any material properties or assets (including capital stock of the Company or any of its Retained Subsidiaries but subsidiaries;
(l) not authorize or make any capital expenditures (including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (Alease) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if 100,000 in the transaction is aggregate for the Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or financial reporting (including tax accounting and reporting) methods, principles or practices, except as may be required by GAAP;
(n) not make any material tax election or settle or compromise any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with past practice, not amend, modify or $100,000,000 individually terminate any Contract required to be listed in any event or (B) transactions among Section 3.15 of the Company and the Retained SubsidiariesDisclosure Schedule or waive, release or assign any material rights or claims thereunder;
(viiip) except with respect to SpinCo and the SpinCo Subsidiariesnot adopt a plan of complete or partial liquidation, issuedissolution, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property restructuring, recapitalization or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as other reorganization of the date of the agreement for such acquisition); provided that neither the Company nor or any of its Retained Subsidiaries shall enter into subsidiaries;
(q) not take any such transaction action that would, or would be reasonably be expected likely to, prevent, materially delay or materially impair the consummation result in any of the Transactions;representations and warranties set forth in this Agreement not being true and correct in any material respect (as if such representation or warranty were made and in effect on the date such action would have been taken, notwithstanding any other provisions hereof) or (except as to any action permitted under Section 5.4) any of the conditions set forth in Article 7 or 8 not being satisfied; and
(xr) other than capital expenditures made in accordance with Section 5.01(b)(vexcept as to subsections (a), (b) and other than purchases and licenses (c) of film and television and production programming (includinSection 5.1, not agree or commit in writing or otherwise to do any of the foregoing.
Appears in 3 contracts
Sources: Merger Agreement (Marriott International Inc /Md/), Merger Agreement (Mi Subsidiary I Inc), Merger Agreement (Execustay Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from From and after the execution and delivery of this Agreement until the earlier of the Effective Time and the termination of this Agreement and prior abandonment of the transactions contemplated by this Agreement pursuant to Article IX, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (ii) as set forth in Section 7.1(a) of the First Effective Time Company Disclosure Schedule or (unless iii) as Parent shall otherwise approve consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned delayed or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letterconditioned), the Company (A) shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve conduct their respective businesses in the Retained Business’ organization intact Ordinary Course of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain the Retained Business’ all existing relations relationships and goodwill with Governmental Entities, key customers, suppliers, distributors, licensors, creditors, lessors, employees suppliers and business associates and others other persons having material business dealings relationships with the Retained Business Company and its Subsidiaries and (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersy) and keep available the services of the officers and key employees of the Company and its Subsidiaries’ present employees , and agents.
(bC) Without without limiting the generality of, and in furtherance of, of the foregoing, the Company covenants shall not, and agrees as to itself and shall cause its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo Subsidiaries voting of or transfer any shares of capital stock of the Company or capital stock or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company that would not preventto the Company or another Wholly Owned Subsidiary of the Company, delay (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or impair (3) pursuant to the Initial Merger ESPP in accordance with its terms and subject to Section 4.3(g));
(viii) make any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other Transactionsthan between the Company and any of its Wholly Owned Subsidiaries in the Ordinary Course of Business);
(ix) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred Shares;
(x) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock redeem, purchase or otherwise acquire (except for or offer to do any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transactionforegoing), (C) declaredirectly or indirectly, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, other equity interests or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (or other equity interests, other than (1A) pursuant the withholding of Common Shares to satisfy the forfeiture of, payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock UnitsEquity Awards outstanding as of the date of this Agreement, in each case case, in accordance with past practice and with their terms and, as applicable, the terms of the Company Stock Plans as in effect on as of the date Capitalization Time and (B) pursuant to an exercise of this Agreement (or as modified after the date of this Agreement Capped Call Transactions in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)their terms;
(iixi) merge incur or consolidate with assume any other Personindebtedness for borrowed money, guarantee any indebtedness for borrowed money or restructure, reorganize enter into a “keep well” or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President similar arrangement in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to indebtedness for borrowed money except for any such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount indebtedness not to exceed $400,000,000 2.5 million individually or $5 million in the aggregate at aggregate;
(xii) incur, make or authorize any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement payment of, or to refinanceaccrual or commitment for, existing Indebtedness on then prevailing market terms capital expenditures, or on terms substantially consistent with any obligations or more beneficial to the Company and its Subsidiaries, taken liabilities in connection therewith except as a whole, than the Indebtedness being replaced contemplated by or refinancedreasonably related to, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided107.5% of the aggregate amounts set forth in, furtherthe Company’s capital budget set forth in Section 7.1(a)(xii) of the Company Disclosure Schedule;
(xiii) enter into, that the Separation Agreement shall provide that SpinCo shall assume the obligations of terminate or materially amend any Contract pursuant to which the Company or any of its Subsidiaries purchase from a third party service provider Software (“Third Party IT Contracts”) (other than in the Ordinary Course of Business with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided Contract that the involve aggregate principal amount annual payments of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii300,000);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 3 contracts
Sources: Agreement and Plan of Merger (Benefitfocus, Inc.), Merger Agreement (Benefitfocus, Inc.), Merger Agreement (Benefitfocus, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and except as (1) otherwise expressly contemplated by this Agreement, and except as required by applicable Law, (2Laws) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly contemplated by this Agreement, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed for transactions set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate articles of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions by-laws or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers otherwise enter into any agreements or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongarrangements imposing material changes or restrictions on its assets, operations or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)businesses;
(iii) acquire assets outside of the ordinary course of business consistent with past practice from any other Person, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any Shares or any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any Shares or any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien in excess of $5 million on any assets of the Company or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person, other than non-material advances to vendors and employees in the ordinary course of business consistent with past practice;
(vii) enter into any agreement with respect to the voting of its capital stock or declare, set aside, make or pay any dividend or other distribution, or purchase, redeem or otherwise acquire any of its capital stock payable in cash, stock, property or otherwise, with respect to any of its capital stock except as expressly required for (x) dividends paid by any direct or indirect wholly owned Subsidiary of the Company Plan to the Company or to any other direct or indirect wholly owned Subsidiary of the Company or (y) a regular quarterly dividend paid in the fourth quarter of 2006 consistent with past practice, which shall not exceed $200,000 in the aggregate as set forth in effect on Section 5.1(f) of the date hereof: Company Disclosure Letter;
(Aviii) establishreclassify, adoptsplit, amend combine, subdivide or terminate redeem, purchase or otherwise acquire, directly or indirectly, any material Company Plan of its capital stock or amend the terms securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ix) incur any outstanding equity-based awards indebtedness for borrowed money (other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan borrowings under the Company’s existing working capital debt facilities in the ordinary course of business consistent with past practice that does not materially increase to fund working capital of the cost Company) or guarantee such indebtedness of such Company Plan another Person, or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant issue or provide sell any transaction debt securities or retention bonuses to any director, officer, employee warrants or other service provider rights to acquire any debt security of the Company or any of its Subsidiaries;
(x) make or authorize any capital expenditures in excess of $5 million in the aggregate;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xii) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(xiii) other than in the ordinary course of business consistent with past practice, amend, modify or terminate any Material Contract, or cancel, modify or waive any debts or claims held by it or waive any rights;
(xiv) make any material Tax election, take any material position on any material Tax Return filed on or after the date of this Agreement or adopt any tax accounting method that is inconsistent with positions taken or methods used in preparing or filing similar Tax Returns in prior periods, or settle or resolve any material Tax controversy;
(xv) other than pursuant to Contracts in effect prior to the date of this Agreement, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except (x) in the ordinary course of business consistent with past practice, (Cy) for sales of obsolete assets or (z) for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $5 million in the aggregate;
(xvi) except as otherwise required by applicable Law, (i) increase the compensation, bonus or pension, pension or welfare or other benefits of (other than those increases in the ordinary course consistent with past practice (A) to employees below the Senior Vice President level or (B) resulting from the Company’s improved performance, based on existing 2005 incentive formulas), or make any new equity awards to, any director, officer or employee of the Company or any of its Subsidiaries, except (ii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any Benefit Plan or outstanding equity-based awards, or (iii) 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 Benefit Plan, to the extent not already required by any such Benefit Plan;
(xvii) settle, or consent to any settlement of, any actions, suits, claims or proceedings against the Company or any of its Subsidiaries or any obligation or liability of the Company (i) alleging personal injury or property damage arising from exposure to asbestos or asbestos-containing materials (other than disputes paid under the Company’s insurance not exceeding $50,000 per claimant), or (ii) alleging any other injury or damage (other than disputes with customers or suppliers in the ordinary course of business consistent with past practice and not exceeding $50,000 per claimant);
(xviii) take any action or omit to take any action that will waive, modify, compromise or extinguish any of the Company’s rights with respect to (1A) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable any insurance coverage relating to any directoractions, officer, employee suits or other service provider of claims against the Company or any of its SubsidiariesSubsidiaries alleging personal injury or property damage arising from exposure to asbestos or asbestos-containing materials, or (EB) any agreements, understandings or arrangements relating to any such coverage;
(xix) take any action or omit to accelerate the vesting or payment of compensation or benefits under take any Company Plan (including action that is reasonably likely to result in any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights conditions to acquire any Indebtednessthe Merger set forth in Article VII not being satisfied, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms actions or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposesomissions expressly permitted by Section 6.2; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) foregoing shall not exceed $9,000,000,000; providedexpand, furtherdiminish or modify in any way any of the Company’s express obligations hereunder;
(xx) enter into, that the Separation Agreement shall provide that SpinCo shall assume the obligations terminate, amend or modify any Contract or transaction with any officer, director or Affiliate of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following or any Person beneficially owning five percent or more of the Distribution, outstanding Shares or of the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements outstanding shares of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 Subsidiary of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practiceCompany;
(vxxi) with respect to the Retained Business, enter into any purchase order (other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) purchase orders entered into in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% an amount less than $10 million); or
(xxii) agree, authorize or commit to do any of the amounts reflected foregoing.
(b) Parent will not and will not permit any of its Subsidiaries to take any action or omit to take any action that is reasonably likely to result in any of the Company’s capital expenditure budget for each of 2017, 2018 and 2019 conditions to the Merger set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business7.2 or Section 7.3 not being satisfied, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon except actions or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed omissions expressly permitted by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition6.12(c); provided that neither the Company nor foregoing shall not expand, diminish or modify in any way any of its Retained Subsidiaries shall enter into any such transaction that would, Parent’s or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinMerger Sub’s express obligations hereunder.
Appears in 3 contracts
Sources: Merger Agreement (McJunkin Red Man Corp), Merger Agreement (Goldman Sachs Group Inc), Merger Agreement (McJunkin Red Man Holding Corp)
Interim Operations. Except (ai) The as expressly contemplated by this Agreement, (ii) as set forth in Section 7.01 of the Company covenants and agrees Disclosure Schedule, (iii) as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2iv) expressly required as consented to in writing by the Transaction Documents (including in connection with the Separation and the Distribution Parent, which consent shall not be unreasonably conditioned, withheld or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)delayed, the Company shallagrees that, from the date of this Agreement until the earlier of the termination of this Agreement in accordance with its terms and shall cause the Effective Time:
(a) the Company and each of its Subsidiaries to, use its reasonable best efforts to shall (i) conduct the Retained Business business only in the ordinary course of business consistent with past practicepractice and (ii) use commercially reasonable efforts to (A) preserve intact its current business organization and (B) keep available the services of its current officers, employees and consultants who are important to the operation of the business; provided that no action or failure to take action by the Company shallor any of its Subsidiaries with respect to matters specifically addressed by any provision of Section 7.01(b) through (n) shall constitute a breach under this Section 7.01(a) unless such action or failure to take action would constitute a breach of such provision of Section 7.01(b) through (n), as applicable;
(b) the Company shall not amend its articles of incorporation or bylaws;
(c) the Company shall not, and shall cause each not permit any of its Subsidiaries that is not wholly owned to, authorize or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity securities (whether in cash, assets, stock or other securities of the Company or its Subsidiaries), except (i) dividends and distributions paid or made on a pro rata basis by Subsidiaries and (ii) quarterly dividends in accordance with the Company’s publicly announced dividend policy as in effect on the date of this Agreement;
(d) except for transactions exclusively among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, the Company shall not, and shall not permit any of its Subsidiaries to, solely issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of its capital stock or other ownership interest in the Company or any Subsidiaries of the Company or any securities convertible into or exchangeable for any such shares or ownership interest, or any rights, warrants or options to acquire or with respect to any such shares of capital stock, ownership interest or convertible or exchangeable securities, take any action to cause to be exercisable any otherwise unexercisable Company Stock Option (except as otherwise provided by the terms of this Agreement or the express terms of any unexercisable options or awards outstanding on the date hereof) or otherwise make any changes (by combination, merger, consolidation, reorganization, liquidation, split, combination, reclassification, adjustment or otherwise) in the capital structure of the Company or any of its Subsidiaries or amend the terms of any securities of the Company or any of its Subsidiaries, other than issuances of shares of Common Stock in respect of any exercise of Company Stock Options outstanding on the date hereof;
(e) except to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business required by Law (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services Section 409A of the Company and its Subsidiaries’ present employees and agents.
(bCode) Without limiting the generality of, and or by Contracts in furtherance of, the foregoing, the Company covenants and agrees existence as to itself and its Subsidiaries that, from and after of the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned hereof or delayed, and which determination shall take into account the by Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter)Benefit Plans, the Company shall not and shall not permit any of its Subsidiaries to:
to (i) except with respect to SpinCo increase in any material manner the aggregate compensation and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares benefits of its capital stock (except for (1) any dividends directors or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, executive officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice (the ordinary course including, for this purpose, the employee salary, bonus and equity compensation review process and related adjustments substantially as conducted each year), or (B) in a principal amount accordance with existing Contracts or Company Benefit Plans, (ii) pay any pension, severance or retirement benefits not required by any existing plan or agreement to exceed $400,000,000 in any such directors or executive officers, (iii) enter into, amend (other than amendments that do not materially increase the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial cost to the Company and or any of its SubsidiariesSubsidiaries of maintaining the applicable compensation or benefit program, taken as a wholepolicy, arrangement or agreement), adopt, implement or otherwise commit itself to any compensation or benefit plan, program, policy, arrangement or agreement including any pension, retirement, profit-sharing, bonus, collective bargaining or other employee benefit or welfare benefit plan, policy, arrangement or agreement or employment or consulting agreement with or for the benefit of any employee, director, consultant, independent contractor or service provider, other than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facilityany employment, in replacement of, severance or to refinance, existing Indebtedness on then prevailing market terms retention agreement (or on terms substantially consistent amendment with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (Crespect thereto) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practicepractice between the Company or one of its Subsidiaries, on the one hand, and any consultant, independent contractor, service provider or employee of the Company or its Subsidiaries who is not an executive officer of the Company or its Subsidiaries, or (Eiv) commercial paper issued other than pursuant to the express terms of the respective Company Benefit Plan or Contract, accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options or other stock-based compensation of or for the benefit of any director or executive officer or otherwise accelerate any rights or benefits, or make any determinations that would result in a material increase in liabilities under any Company Benefit Plan;
(f) the Company shall not, and shall not permit any its Subsidiaries to, make any loans or advances to any of its directors and executive officers (other than in the ordinary course of business consistent with past practice in a principal amount) or make any change in its existing borrowing or lending arrangements for or on behalf of any such Persons;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, incur, assume, guarantee, prepay or otherwise become liable for any indebtedness for borrowed money (directly, contingently or otherwise), except for (A) any indebtedness for borrowed money among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, (B) indebtedness for borrowed money in an amount not to exceed $250,000,000 5,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness outstanding at any time outstanding time, incurred under this clause and pursuant to existing credit arrangements, (FC) shall not exceed $9,000,000,000; providedletters of credit issued in the ordinary course of business consistent with past practices, further, that and (D) indebtedness for borrowed money as required to consummate the Separation Agreement shall provide that SpinCo shall assume Merger and the obligations of transactions contemplated hereby;
(h) neither the Company or nor any of its Subsidiaries with respect shall settle or compromise any claim, suit action, arbitration or other proceeding, whether administrative, civil or criminal, in law or equity, except for settlements or compromises that consist solely of the payment of monetary damages in an amount not to such Indebtedness exceed $1,000,000 individually or $5,000,000 in the aggregate;
(i) neither the Company nor any of its Subsidiaries shall change any of the material accounting methods, principles or practices used by it unless required by or advisable under a change in GAAP, SEC rule or policy or applicable Law;
(j) other than in the ordinary course of business, neither the Company nor any of its Subsidiaries shall (A) make, change or revoke any material income Tax election, (B) file any material amended income Tax Return, or (C) settle or compromise any material liability for income Taxes or surrender any claim for a refund of a material amount of income Taxes, other than in the case of clauses (B) and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations (C) hereof in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing income Taxes that have been identified in the reserves for income Taxes in the Company’s GAAP financial statements and for settlements or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding compromises permitted under this clause (Gg) shall not exceed the amount permitted in Section 5.01 of this Section;
(k) neither the Company Disclosure Letter; providednor any of its subsidiaries shall acquire, furtherexcept in respect of any mergers, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G)consolidations, (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to business combinations among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, taken as a wholeincluding by merger, than the Indebtedness being replaced consolidation or refinanced; providedacquisition of stock or assets, furtherany corporation, that partnership, limited liability company, other business organization or any division thereof, or any material amount of assets in connection with acquisitions or investments;
(l) neither the Company nor any of its Subsidiaries shall consult with Parent prior to incurring Indebtedness amend in any material respect or waive any of its material rights under this clause (H)any Company Material Contract or enter into any Contract that would constitute a Company Material Contract, (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement except in the ordinary course of business consistent with past practice or as would not reasonably be expected to result in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practiceMaterial Adverse Effect;
(vm) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall sell, transfer, mortgage, encumber or otherwise dispose of any of its assets, business or properties, except for sales, transfers, mortgages, encumbrances or other dispositions in the ordinary course of business, or Liens, mortgages or encumbrances granted in connection with refinancing, replacement or extension of existing indebtedness consistent with past practice or pursuant to a transaction that, together with any other such transactions, is not material to it and its Subsidiaries, taken as a whole; and
(n) neither the Company nor any of its Subsidiaries shall enter into a Contract to do any of the foregoing. The Company, on the one hand, and Parent and Merger Sub, on the other hand, acknowledge and agree that: (i) nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company or any of its Subsidiaries prior to the Effective Time, (ii) prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, control and supervision over its and its Subsidiaries’ operations and (iii) notwithstanding anything to the contrary in this Agreement, no consent of Parent shall be required with respect to any matter set forth in this Section 7.01 or elsewhere in this Agreement to the extent the requirement of such transaction that would, or consent would reasonably be expected to, prevent, materially delay or materially impair the consummation to be a violation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinapplicable Law.
Appears in 3 contracts
Sources: Merger Agreement (Campbell Thomas J), Merger Agreement (Michael Baker Corp), Merger Agreement (Michael Baker Corp)
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries that, from and after set forth in the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) corresponding section of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained BusinessSchedule or otherwise as expressly contemplated hereby, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoingapplicable Law, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement until the Effective Time, the business of it and prior its Subsidiaries shall be conducted only in the ordinary course and, to the First extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of the present key employees and agents of the Company and its Subsidiaries. Without limiting the generality of the foregoing and in furtherance thereof, except as set forth in the corresponding section of the Company Disclosure Schedule or as otherwise expressly contemplated hereby, from the date of this Agreement until the Effective Time Time, the Company will not and will not permit its Subsidiaries to (unless Parent Novartis shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned withheld or delayed, delayed and which determination shall take into account be subject to the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(bprocedures set forth on Schedule 7.1(a) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:Schedule):
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws by-laws (or comparable similar governing documents);
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company;
(iii) acquire assets outside of the ordinary course of business from any Person with a purchase price in the aggregate in excess of $2,000,000 individually, other than acquisitions pursuant to any Contract in effect as of the date of this Agreement and described in or filed as an exhibit to the Company Reports filed prior to the date of this Agreement;
(iv) other than in the ordinary course of business consistent with past practice (excluding for this purpose the activities of the Company and its Subsidiaries in 2005) or pursuant to Contracts in effect as of the date of this Agreement as set forth on Section 7.1(a)(iv) of the Company Disclosure Schedule, and other than the issuance of shares of Common Stock upon the exercise of outstanding Company Options, pursuant to other equity-based awards granted under other Company equity-based compensation plans prior to the date of this Agreement consistent with the terms thereof or pursuant to the terms of the Debentures (to the extent required by such terms), in each case, in accordance with their terms, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than amendments to the governing documents issuance of any shares by a wholly-owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly-owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding securities convertible or exchangeable or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(except for any such transaction by a wholly owned subsidiary v) other than pursuant to Contracts in effect as of the date of this Agreement and described in or filed as an exhibit to the Company which remains Reports filed prior to the date of this Agreement, make any loan, advance or capital contribution to or investment in any Person (other than a wholly wholly-owned Subsidiary after consummation of such transactionthe Company) outside the ordinary course of business (other than loans to employees not to exceed, in the aggregate, $2,500,000 in principal amount), ;
(Cvi) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or other distributions paid by a any direct or indirect wholly wholly-owned Subsidiary of the Company to another the Company or to any other direct or indirect wholly wholly-owned Subsidiary of the Company and periodic dividends and other periodic distributions by non-wholly-owned Subsidiaries in the ordinary course of business);
(vii) reclassify, combine, split, subdivide or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)stock;
(iiviii) merge incur any third-party indebtedness for borrowed money or consolidate with any other guarantee such indebtedness of another Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan unsecured indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice repayable within 180 days without penalty;
(ix) except as set forth in Section 7.1(a)(ix) of the Company Disclosure Schedule, make or authorize any capital expenditure;
(x) enter into any Contract that does not materially increase would have been a Material Contract had it been entered into prior to the cost execution of such Company Plan this Agreement, other than any Contract (A) for the sale of products in the ordinary course of business or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant providing for any capital expenditure to the extent permitted by Section 7.1(a)(ix);
(xi) other than in the ordinary course of business, amend or provide modify in any transaction material respect, or retention bonuses terminate or waive any material right or benefit under, any Material Contract;
(xii) make any significant changes with respect to accounting policies or practices, except as required by changes in GAAP or by Law;
(xiii) settle any director, officer, employee litigation or other service provider proceedings before or threatened to be brought before a Governmental Entity or arbitral proceeding for an amount payable by or on behalf of the Company or any Subsidiary in excess of $2,500,000 (exclusive of any amounts to be received by the Company in reimbursement of such settlement amount, whether under any insurance policy or indemnity, other than such amounts that are contested) or which would be reasonably likely to have any adverse impact on the operations of the Company or any of its Subsidiaries, (C) increase the compensation, bonus Subsidiaries or pension, welfare on any current or future litigation or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees proceeding of the Company or any of its Subsidiaries;
(ivxiv) incur except as required by Law, make any Indebtedness material Tax election or issue take any warrants material position on any material Tax Return filed on or other rights to acquire after the date of this Agreement or adopt any Indebtednessmaterial method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods;
(xv) sell, lease, license or otherwise dispose of any assets of the Company or its Subsidiaries except for (i) sales of (A) products or services provided in the ordinary course of business consistent with past practice or (B) other assets in a principal aggregate amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms 5,000,000, or on terms substantially consistent with or more beneficial to (ii) licenses of Intellectual Property of the Company and or its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into Subsidiaries in the ordinary course of business consistent (but excluding (x) any licenses of programs, projects or products or (y) any licenses with past practiceup-fronts or milestones in excess of $5,000,000 in the aggregate), and other than pursuant to Contracts in effect as of the date of this Agreement as set forth on Section 7.1(xv) of the Company Disclosure Schedule;
(xvi) other than pursuant to Contracts in effect as of the date of this Agreement as set forth on Section 7.1(xvi) of the Company Disclosure Schedule, or as otherwise required by Law, (Ei) commercial paper issued in enter into any new employment or compensatory agreements with, or increase the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at compensation and employee benefits of, any time outstandingemployee, (F) Indebtednessconsultant, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations director of the Company or any of its Subsidiaries with respect (including entering into any bonus, severance, change of control, termination, reduction-in-force or consulting agreement or other employee benefits arrangement or agreement pursuant to which such Indebtedness (and Parent and person has the right to any form of compensation from the Company or any of its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (Gii) Indebtedness under hire any employee to fill a position at the Bridge Facilitylevel of (A) executive committee member or other executive officer or (B) vice president or above who reports directly to an executive committee member, refinancings or replacements thereof and of commitments thereunder(iii) adopt or amend in any respect, and or accelerate vesting or payment under, any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement Benefit Plan in the ordinary course case of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (Gi) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (Liii) purchase money indebtedness and lease financing above other than in the ordinary course of business consistent with past practice;
(vxvii) with respect to engage in the Retained Businessconduct of any new line of business, other than with respect to acquisitions of businesses, which is subject to as expressly permitted by Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v7.1(a)(iii) of the Company Disclosure Letter;Schedule; or
(vixviii) with respect to the Retained Businessagree, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend resolve or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 3 contracts
Sources: Agreement and Plan of Merger (Novartis Ag), Merger Agreement (Chiron Corp), Agreement and Plan of Merger (Novartis Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent SBC shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned withheld or delayed, and except as (1) otherwise expressly contemplated by this Agreement or the Stock Option Agreement, in the Company Disclosure Letter or as required by applicable Law, ):
(2i) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in the ordinary and usual course of business consistent with past practiceand, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use commercially all reasonable efforts to preserve the Retained Business’ its business organization intact and maintain the Retained Business’ its existing relations and goodwill with Governmental Entities, customers, suppliers, regulators, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.associates;
(bii) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval it shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (by-laws or comparable governing documents) (other than amendments to amend, modify or terminate the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), Rights Agreement; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), stock; (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual stock, other than per share regular quarterly cash dividends on the Common Stock as described not in Section 5.01(b)(i) excess of the $0.44 per Company Disclosure Letter), Share; or (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture ofacquire, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or permit any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (DCompany's Employee Stock Ownership Plan) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon purchase or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance ofacquire, any shares of its capital stock or any securities convertible into or exchangeable into or exercisable forfor any shares of its capital stock;
(iii) neither it nor any of its Subsidiaries shall knowingly take any action that would prevent the Merger from qualifying for "pooling of interests" accounting treatment or as a tax-free "reorganization" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties herein to become untrue in any material respect;
(iv) neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any optionsCompensation and Benefit Plans or increase the salary, warrants wage, bonus or other rights to acquirecompensation of any directors, any such shares, officers or employees except (A) for any Shares issued pursuant grants or awards to Company Restricted Stock Unitsdirectors, Company Performance Stock Units officers and Company Deferred Stock Units outstanding employees of it or its Subsidiaries under existing Compensation and Benefit Plans in such amounts and on the date of this Agreement in accordance such terms as are consistent with the existing terms of such awards and the Company Stock Planspast practice, (B) Investment Preferred Stock (as defined in the Bridge Facilitynormal and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases and the provision of individual Compensation and Benefit Plans consistent with past practice for promoted or newly hired officers and employees and the adoption of Compensation and Benefit Plans for employees of new Subsidiaries in amounts and on terms consistent with past practice) or (C) by wholly owned for actions necessary to satisfy existing contractual obligations under Compensation and Benefit Plans existing as of the date hereof;
(v) neither it nor any of its Subsidiaries to shall issue any preferred stock or incur any indebtedness for borrowed money (other than indebtedness incurred solely for the purpose of funding the Escrow Account or the replacement or refinancing of existing short-term indebtedness) or guarantee any such indebtedness if the Company or to should reasonably anticipate that as a result of such incurrence any other wholly owned Subsidiary of the Company; 's or any of its Subsidiaries' outstanding senior indebtedness would be rated lower than A by Standard & Poor's;
(vi) neither it nor any of its Subsidiaries shall make any capital expenditures in any calendar year in an aggregate amount in excess of the aggregate amount reflected in the Company's capital expenditure budget for such year, a copy of which has been provided thatto SBC, for plus $100 million;
(vii) except as contemplated by Section 6.1(a)(iv), neither the avoidance Company nor any of doubtits Subsidiaries shall issue, granting customary profit participation rights deliver, sell, or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant encumber shares of any shares class of capital its common stock or any securities convertible or exchangeable into or exercisable forinto, or any optionsrights, warrants or other rights options to acquire, any such shares for purposes except the option granted under the Stock Option Agreement, options outstanding on the date hereof under the Stock Plans, awards of options and restricted stock granted hereafter under the Stock Plans in the ordinary course of business in accordance with this Section 5.01(b)(viii)Agreement and shares issuable pursuant to such options and awards;
(ixviii) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to neither it nor any of its Subsidiaries shall spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 50 million in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case calendar year to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses assets or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided . For purposes of this clause (viii), the amount spent with respect to any acquisition shall be deemed to include the aggregate amount of capital expenditures that neither the Company is obligated to make at any time or plans to make as result of such acquisition within two years after the date of acquisition; (ix) neither it nor any of its Retained Subsidiaries shall enter any business other than the telecommunications business and those businesses traditionally associated with the telecommunications business or enter into or extend any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair telecommunications business outside the consummation geographic areas served by it and its Subsidiaries as of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses date of film and television and production programming (includinthis Agreement; and
Appears in 2 contracts
Sources: Merger Agreement (SBC Communications Inc), Merger Agreement (SBC Communications Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after From the execution date of this Agreement and prior to until the First Effective Time or the earlier termination of this Agreement, except as (unless w) otherwise expressly contemplated by this Agreement, (x) required by applicable Laws (y) set forth in Section 6.1 of the Company Disclosure Letter or (z) consented to in writing by Parent shall otherwise approve in writing, (which approval shall consent will not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shallwill, and shall will cause each of its Subsidiaries to, conduct its business in the ordinary course of business consistent with past practice and in compliance with all applicable Laws, and will, and will cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business preserve intact its present business organization, maintain in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each effect all of its Subsidiaries toPermits, solely to keep available the extent related to the Retained Businessservices of its directors, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact officers and employees and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensorslenders, creditorspartners, lessors, employees and business associates suppliers and others having material business dealings associations with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and it or its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality ofof the foregoing and subject to the exceptions set forth in the foregoing clauses (w), (x), (y) and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that(z), from and after the date of this Agreement and prior to until the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter)Time, the Company shall will not and shall will not permit its Subsidiaries to do any of its Subsidiaries tothe following:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate articles of incorporation or bylaws (or comparable such other similar applicable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)liquidate;
(iii) other than capital expenditures covered by clause (x) below, acquire assets (whether by merger, tender offer, consolidation, purchase of property or otherwise) outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $10,000,000 in any transaction or series of related transactions;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries including Shares and/or Class B Shares (other than the issuance, sale, pledge, disposition, grant, transfer, lease, license, guaranty or encumbrance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, except for the issuance of Shares pursuant to awards or rights outstanding as expressly required by any Company Plan as in effect on of the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend of this Agreement in accordance with the terms of the Stock Plans, or as may be granted in accordance with, or otherwise in compliance with, the terms of this Agreement;
(v) create or incur any outstanding equity-based awards material Lien on any of the assets including any material Owned Intellectual Property, other than Permitted Liens;
(vi) make any such action taken for purposes loans, advances or capital contributions to, guarantees of replacing, renewing or extending a broadly applicable material investments in any Person (other than (1) between or among the Company Plan and/or one or more direct or indirect wholly owned Subsidiary of the Company or (2) advances made in the ordinary course of business consistent with past practice that does not materially increase to employees of the cost Company and its Subsidiaries for reimbursement of such Company Plan routine travel or benefits provided under such Company Plan based on business expenses in accordance with the cost terms of the applicable policy in effect on the date hereofof this Agreement);
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any wholly owned Subsidiary to the Company or to any other wholly owned Subsidiary or any dividends required to be paid under any credit facility filed as an exhibit in the Company Reports filed with the SEC since June 28, 2014); provided, that the Company may make, declare and pay one regular quarterly cash dividend in each quarter of the fiscal year with a record date consistent with the record date for each quarterly period for the fiscal year ended June 27, 2015; provided, further, that such dividend per share shall not exceed (A) $0.39 per quarter for dividends with respect to fiscal year 2017 and (B) grant $0.41 per quarter for dividends with respect to fiscal year 2018;
(viii) reclassify, split, combine, subdivide or provide redeem, purchase or otherwise acquire, directly or indirectly, any transaction capital stock or retention bonuses to securities convertible or exchangeable into or exercisable for any directorshares of capital stock of the Company or any of its Subsidiaries;
(ix) incur any Indebtedness, officer, employee or issue or sell any debt securities or warrants or other service provider rights to acquire any debt security of the Company or any of its Subsidiaries, except for Indebtedness (A) that is to be paid off in full and without penalty at or prior to the Effective Time and (i) incurred in the ordinary course of business consistent with past practice pursuant to existing Contracts, or (ii) incurred to replace, renew, extend, refinance or refund any existing Indebtedness of the Company or any of its Subsidiaries, (B) incurred as intercompany Indebtedness solely among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries or (C) Indebtedness not to exceed $10,000,000 in aggregate principal amount outstanding at any time incurred by the Company or any of its Subsidiaries that is to be paid off in full and without penalty at or prior to the Effective Time other than in accordance with clauses (A) through (B);
(x) make or authorize any capital expenditures or series of related capital expenditures that are not in the ordinary course of business consistent with past practice;
(xi) (A) except as required by Law (including the legal obligation under the National Labor Relations Act or similar national and provincial Canadian laws to bargain in good faith to reach a labor contract with a labor organization that has been certified as the bargaining agent for the designated employee group) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend or modify in a material manner or terminate any Material Contract, or cancel, modify in a material manner or waive any debts, rights, or claims thereunder (other than as permitted pursuant to Section 6.1(a)(ix));
(xii) make any changes with respect to accounting policies or procedures, except as required by changes in applicable GAAP;
(xiii) (A) waive, release, settle or compromise any pending Action against the Company or any of its Subsidiaries other than settlements or compromises of any Action (1) in which the amount paid by or on behalf of the Company or any of its Subsidiaries in settlement or compromise does not exceed $1,000,000 individually or $3,000,000 in the aggregate and (2) that would not impose any material restrictions on the business or operations of the Company or its Subsidiaries or (B) commence, join or appeal in any Action, other than in the ordinary course of business;
(xiv) (A) make or change any material Tax election, (B) change the Company’s or any of its Subsidiaries’ method of accounting for Tax purposes, (C) file any material amended Tax Return, (D) settle, concede, compromise or abandon any material Tax claim or assessment, (E) surrender any right to a refund of material Taxes or (F) consent to any extension or waiver of the limitation period applicable to any claim or assessment with respect to material Taxes;
(xv) fail to use commercially reasonable efforts to maintain in full force and effect the Insurance Policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice;
(xvi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material assets (including any material Owned Intellectual Property), licenses, operations, product lines, businesses or interests of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, in each case except (1) in the ordinary course of business consistent with past practice, (2) for sales of obsolete assets or (3) for transactions involving a de minimis amount of assets in the aggregate;
(xvii) except as required pursuant to existing written Benefit Plans in effect prior to the date of this Agreement or as otherwise required by applicable Law and except as contemplated by this Agreement, (A) pay, grant or provide any severance or termination payments or benefits to any director, officer, contractor or employee of the Company or any of its Subsidiaries; (B) increase the compensation, bonus or pension, welfare welfare, severance or other benefits of of, pay any bonus, incentive or retention payments to, or make any equity awards to any director, officer officer, contractor or employee of the Company or any of its Subsidiaries, except for increases in base salary in the ordinary course of business consistent with past practice with respect to for employees who are not officers; (1C) employees below establish, adopt, amend or terminate any Benefit Plan or amend the level terms of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, any outstanding equity-based awards; (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan Benefit Plan; (including any equity-based awards), (FE) change in any material respect any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP; (GF) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries; or (G) hire or terminate without cause any executive officer or any employee with a target annual compensation opportunity in excess of $200,000, other than any such hire that is a replacement hire to fill a position in existence as of the date of this Agreement;
(ivxviii) incur other than in compliance with Section 6.2, take any Indebtedness action or issue omit to take any warrants action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xix) communicate with the directors, officers, employees or consultants of the Company regarding the compensation, benefits or other rights treatment they will receive in connection with the Merger or after the Closing, other than communications that are not inconsistent with (a) the terms of this Agreement or (b) previous public announcements or communications; or
(xx) agree, authorize or commit to acquire do any Indebtednessof the foregoing actions or enter into any Contracts with respect to any of the foregoing actions.
(b) Nothing contained in this Agreement is intended to give Parent or Merger Sub the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, except (A) in each of Parent and the ordinary course of business Company will exercise, consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiariesconditions of this Agreement, taken as a whole, than existing Indebtedness, complete control and with a maturity date no more than 10 years supervision over their respective operations.
(c) From and after the date of the Contract evidencing such Indebtednessthis Agreement, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced will notify Parent promptly of any notice or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among other communication received by the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of its Subsidiaries from the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at PBGC regarding any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations defined benefit pension plan of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, other than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement routine notices in the ordinary course of business consistent with past practice business. In the event of any such notice or in connection with a Sky Acquisition and not for speculative purposes; provided that communication, the Company shall will consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection communications with the repair PBGC or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) its representatives and will act in the ordinary course of business consistent accordance with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v6.1(c) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin.
Appears in 2 contracts
Sources: Merger Agreement (G&k Services Inc), Merger Agreement (Cintas Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) otherwise expressly contemplated by this Agreement or as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts effort to conduct the Retained Business its business and that of its Subsidiaries’ in the ordinary course of business consistent with past practiceOrdinary Course and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use commercially their respective reasonable best efforts to preserve the Retained Business’ organization intact their business organizations intact, including their material Intellectual Property Rights, Company Material Contracts and other material assets, and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present officers, employees and agents.
(b) , except as required by applicable Law. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise expressly (unless Parent shall otherwise approve A) contemplated by this Agreement, (B) required by applicable Law, (C) as approved in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Parent or (3D) otherwise expressly disclosed set forth in the corresponding subsection of Section 5.01(b6.1(a) of the Company Disclosure Letter), the Company shall not and shall not permit any of cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly owned Subsidiaries, or restructure, consolidate, recapitalize, reorganize or completely or partially liquidate, dissolve or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire, directly or indirectly (including by merger, consolidation, operation of law, or acquisition of shares, other equity interests or assets or any other business combination), any Person or any division, business, assets or properties of any other Person or make any investment in any other Person, in each case, with a fair market value or purchase price in excess of one million dollars ($1,000,000) in the aggregate in any transaction or series of related transactions, in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company or Parent, as applicable, to consummate the Transactions prior to the Outside Date, other than acquisitions of inventory or other goods in the Ordinary Course pursuant to and in accordance with the terms of Company Material Contracts in effect as of the date of this Agreement, true, correct and complete copies of which have been made available to Parent prior to the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or of any of its Subsidiaries or any rights, warrants or options to acquire any such shares or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units (other than in the case issuance of clause (A)), shares (A) amend by its certificate wholly owned Subsidiary to it or another of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)its wholly owned Subsidiaries, (B) splitin respect of Company Options outstanding as of the date of this Agreement in accordance with their terms and, combineas applicable, subdivide the Stock Plans as in effect on the date of this Agreement, or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary C) Company Options issued to new employees of the Company which remains or its Subsidiaries in the Ordinary Course and in accordance with the Stock Plans as in effect on the date of this Agreement; provided that any Company Options issued pursuant to clause (C) will (w) not exceed 150,000 Company Ordinary Shares in the aggregate on a fully diluted basis, (x) have terms consistent with grant terms and amounts as Company Options granted to similarly situated employees, (y) be subject to the standard four (4) year vesting schedule as existing Company Options as of the date hereof and (z) not provide for accelerated vesting upon a termination of employment or a change in control of the Company), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its wholly owned Subsidiary after consummation Subsidiaries) in excess of such transaction), one million dollars (C$1,000,000) in the aggregate;
(vi) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary);
(vii) reclassify, split, combine, subdivide or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect toCompany Ordinary Shares to satisfy withholding Tax obligations upon the exercise, vesting or settlement of Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case Options outstanding as of the date of this Agreement in accordance with past practice and with their terms and, as applicable, the terms of the Company Stock Plans as in effect on the date of this Agreement Agreement;
(viii) incur any Indebtedness (including the issuance of any debt securities, warrants or as modified after other rights to acquire any debt security) in excess of one million dollars ($1,000,000) in the date aggregate;
(ix) make or authorize any payment of, or accrual or commitment for, capital expenditures other than in accordance with the capital expenditures budget set forth on Section 6.1(a)(ix) of the Company Disclosure Letter;
(x) enter into any Contract that would have been a Company Material Contract that is specified in clause (iii), (vi), (vii), (ix), (xi), (xv) or (xvii) in Section 4.18(a) or any Government Grant that would have been a Company Material Contract that is specified in clause (xix) in Section 4.18(a) had it been entered into prior to this Agreement or amend, modify, supplement, waive, terminate, assign, convey, encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any such Company Material Contract, other than (1) expirations of any such Contract in the Ordinary Course in accordance with the terms of this Agreement) such Contract, or (2) purchasesnon-exclusive licenses, repurchasescovenants not to ▇▇▇, redemptions releases, waivers or other acquisitions of securities of any wholly rights under Intellectual Property Rights owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of its Subsidiaries, in each case, granted in the Company)Ordinary Course;
(xi) cancel, modify or waive any debts or claims held by it or any of its Subsidiaries or waive any rights held by it or any of its Subsidiaries having in each case a value in excess of one million dollars ($1,000,000) in the aggregate;
(xii) (i) settle, pay, discharge or satisfy any Proceeding for an amount in excess of one million dollars ($1,000,000) in the aggregate or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any Governmental Order that would restrict in all material respects the future activity or conduct of it or any of its Subsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person or (ii) merge institute any Proceeding by the Company or consolidate with any other PersonCompany Subsidiary, or restructure, reorganize or completely or partially liquidate (other than transactions in the Ordinary Course;
(xiii) make any changes with respect to accounting policies or procedures, except as required by GAAP or any similar Law or financial accounting standard;
(xiv) enter into any new line of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company business that would not be material to the Company’s consolidated operations or that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company to consummate the Transactions);
(iiixv) except as expressly required by any Company Plan as in effect on the date hereof: (A) establishmake, adopt, amend change or terminate revoke any material Company Plan Tax election, change an annual Tax accounting period, adopt or amend change any material Tax accounting method, file any amended material Tax Return, enter into any closing agreement with respect to material Taxes, settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a refund of a material amount of Taxes, agree to an extension or waiver of the terms statute of limitations with respect to the assessment or determination of any outstanding equity-based awards other than material Tax, or take any such action taken for purposes of replacing, renewing or extending which is reasonably likely to result in a broadly applicable material Company Plan increase in the ordinary course Tax liability of business consistent the Company or its Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its Affiliates;
(xvi) transfer, sell, lease, divest, cancel or otherwise dispose of, or permit or suffer to exist the creation of any Encumbrance upon, any assets (tangible or intangible), product lines or businesses of it or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except in connection with past practice that does not materially increase services provided in the cost Ordinary Course and sales of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofobsolete assets and except for sales, (B) grant or provide any transaction or retention bonuses to any directorleases, officer, employee licenses or other service provider dispositions of tangible assets (not including services) with a fair market value not in excess of one million dollars ($1,000,000) in the aggregate;
(xvii) cancel, abandon or otherwise allow to lapse or expire any Intellectual Property Rights that are material to the businesses of the Company or any of its Subsidiaries, ;
(Cxviii) increase alter the compensation, bonus operation or pension, welfare or other benefits security of any directorIT Assets owned, officer used or employee held for use in the operation of the Company and its Subsidiaries businesses in a manner that would be materially less protective of any confidential or proprietary information that is in the Company’s or any of its Subsidiaries’ possession or control, including any information stored on or processed by such IT Assets;
(xix) except as required under applicable Law or pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement and set forth in Section 6.1(a)(xix) of the Company Disclosure Letter, (A) increase the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, in each case, other than increases of up to 7.5% in the ordinary course Ordinary Course in respect of business consistent any Company Employee who (i) is not a Key Employee or (ii) earns a salary, wage rate or consulting fees (as applicable) and target cash bonus opportunity that exceeds $250,000 on an annual basis (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Company Benefit Plan, in each case, other than in the Ordinary Course and in accordance with past practice the Company’s policies and procedures with respect to (1) employees below the level granting, amending or modifying awards and, with respect to grants of Executive Vice President and (2) employees at or above the level of Executive Vice President new awards, in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeaccordance with Section 6.1(a)(iv), (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including any equity-based awards)Benefit Plan, (FE) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to materially change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (GF) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or loans (other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper routine travel advances issued in the ordinary course of business consistent with past practice in a principal amount not Ordinary Course) to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof)Employee, (G) Indebtedness under the Bridge Facilityhire any employee or engage any independent contractor (who is a natural person) whose salary, refinancings wage rate or replacements thereof consulting fees (as applicable) and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that target cash bonus opportunity exceed $250,000 in the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), on an annual basis or (H) Indebtedness assumed terminate the employment of any executive officer or any Company Employee who is eligible to receive payments or benefits upon a termination of employment in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiarieschange in control, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereofother than, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000for cause;
(xx) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar employee representative organization, other than pursuant to applicable Law or extension orders;
(Jxxi) hedging cancel or fail to use commercially reasonable efforts to replace or renew any material Insurance Policies;
(xxii) take any action or fail to take any action that is reasonably likely to result in compliance with the hedging strategy any of the Company conditions to the Merger set forth in Article VII not being satisfied; or
(xxiii) agree, authorize or commit to do any of the foregoing.
(b) Parent covenants and agrees as of to itself and its Subsidiaries that, after the date of this Agreement in and prior to the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that Effective Time (unless the Company shall consult otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), except as otherwise expressly contemplated by this Agreement or required by applicable Law, Parent shall use its reasonable best effort to conduct its business and that of its Subsidiaries’ in the Ordinary Course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to preserve their business organization intact, including their material Intellectual Property Rights, material Contracts and other material assets, and maintain existing relations and goodwill with Parent prior to entering into hedging activities in connection with Indebtedness Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the services of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited it and its Subsidiaries; provided that present officers, employees and agents, except as required by applicable Law. Without limiting the aggregate principal amount generality of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% furtherance of the amounts reflected in the Company’s capital expenditure budget for each of 2017foregoing, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on from the date of this Agreement in accordance with until the existing terms of such awards and the Company Stock PlansEffective Time, except as otherwise expressly (A) contemplated by this Agreement, (B) Investment Preferred Stock (as defined in the Bridge Facility) or required by applicable Law, (C) as approved in writing (which approval shall not be unreasonably withheld, conditioned or delayed) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary Company, (D) as set forth on the corresponding subsection of Section 6.1(b) of the Company; provided thatParent Disclosure Letter or (E) in connection with or required to effectuate the Stock Split, for the avoidance of doubtSale Transactions, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing Parent shall be deemed not, and shall cause its Subsidiaries not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);to:
(ixi) with respect to the Retained Business, other than capital expenditures made adopt or propose any change in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 Parent’s Organizational Documents in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided manner that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation ability of Parent to consummate the Transactions; provided, that any amendment to Parent’s certificate of incorporation to increase the authorized number of shares or series of the Transactionscapital stock of Parent shall in no way be restricted by the foregoing;
(xii) merge or consolidate itself or any of its Subsidiaries with any other than Person or restructure, consolidate, recapitalize, reorganize or completely or partially liquidate, dissolve, in each case, except for any such transactions among its wholly owned Subsidiaries or any Parent Permitted Acquisitions;
(iii) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses stock of film and television and production programming (includinParent or any of its Subsidiaries or any right, warrants or options to acquire such shares or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stoc
Appears in 2 contracts
Sources: Merger Agreement (Rada Electronic Industries LTD), Merger Agreement (Leonardo DRS, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time Time, except (unless A) as required by applicable Law, (B) as otherwise contemplated, required or permitted by this Agreement, (C) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed) or (D) as set forth in Section 7.1 of the Company Disclosure Letter, from the date of this Agreement and prior to the Effective Time, the business of the Company and its Subsidiaries shall be conducted in the ordinary course of business in all material respects consistent with past practice and it and its Subsidiaries shall use their respective commercially reasonable efforts to (i) preserve their business organizations intact, (ii) maintain existing relations with Governmental Entities, customers and suppliers, including Parent, (iii) notify Parent promptly (x) after receipt of any material communication from any Governmental Entity or inspections of any manufacturing, research and development or clinical trial site and before giving any material submission to a Governmental Entity and (y) prior to making any material change to a study protocol, adding new trials, making any material change to a manufacturing plan or process, or making a material change to the development timeline for any of its product candidates or programs, (iv) preserve intact and keep available the services of present employees, consultants, independent contractors and executive officers of the Company and its Subsidiaries, (v) keep in effect casualty, product liability, workers’ compensation and other insurance policies in coverage amounts substantially similar to those in effect at the date of this Agreement, (vi) preserve and protect all Registered Intellectual Property listed in the Orange Book with respect to Dificid (fidaxomicin), and which determination shall take into account (vii) preserve and protect the material Intellectual Property (other than the Registered Intellectual Property listed in the Orange Book) owned by the Company Overview Presentationand its Subsidiaries, except in the case of clause (vii) in the ordinary course of business. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective Time, except (A) as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide as otherwise required or reclassify its outstanding shares of capital stock (except for any such transaction expressly permitted by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)this Agreement, (C) declare, set aside or pay any dividend or distribution payable as Parent may approve in cash, stock or property writing (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed approval not to be an issuanceunreasonably withheld, sale conditioned or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ixdelayed) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinor
Appears in 2 contracts
Sources: Merger Agreement (Optimer Pharmaceuticals Inc), Merger Agreement (Cubist Pharmaceuticals Inc)
Interim Operations. Each of Grace and Fresenius AG (afor itself and on behalf of Fresenius AG) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries subsidiaries that, from and after the date of hereof until the Effective Time, except insofar as the other parties shall otherwise consent or except as otherwise contemplated by this Agreement, the Contribution Agreement, the Distribution Agreement or its Disclosure Letter (provided that, as used herein, all references to Grace (and/or its Affiliates) shall be deemed to refer to Grace and prior its Affiliates which conduct the NMC Business, consistent with Section 9.8 hereof, except as otherwise specifically provided):
(a) To the extent reasonably practicable, taking into account any operational matters that may arise that are primarily attributable to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) pendency of the Company Disclosure Letter)Reorganization, the Company shall business of it and its subsidiaries will be conducted only in the ordinary and usual course consistent with past practice and existing business plans previously disclosed to the other parties and, to the extent consistent therewith, it and its subsidiaries will use all reasonable efforts to preserve their business organization intact and maintain their existing relations with customers, suppliers, employees and business associates.
(b) It will not and shall not permit (i) sell or pledge or agree to sell or pledge any stock owned by it in any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than subsidiaries or, in the case of clause Fresenius AG, any FWD Business Subsidiary; (A)), (Aii) amend its certificate Certificate of incorporation Incorporation or bylaws By-laws (or comparable governing documents) similar organizational document); (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (Biii) split, combine, subdivide combine or reclassify its any outstanding shares of capital stock stock; or (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Civ) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting any of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);.
(iic) merge or consolidate with any other PersonNeither Grace, or restructureFresenius USA, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or nor any of its Subsidiariestheir respective subsidiaries or, (C) increase the compensationFresenius AG, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations solely with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directorsFWD Business Subsidiary, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, licenseissue, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize or propose the issuance, delivery, sale, grantpledge, transfer disposition or encumbrance of, any shares of, or securities convertible or exchangeable for, or options, puts, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock or of any securities convertible or exchangeable into or exercisable for, or any class other than common shares issuable pursuant to options, warrants or and other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units convertible securities outstanding on the date of this Agreement hereof and disclosed in accordance with its Disclosure Letter, and employee stock options granted after the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined date hereof in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary ordinary course of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);business.
(ixd) None of Grace, Fresenius USA or Fresenius AG, with respect to the Retained FWD Business, will (i) transfer, lease, license, guarantee, sell, mortgage, pledge or dispose of any property or assets encumber any property or assets other than in the ordinary and usual course of business; (ii) authorize or make capital expenditures made in accordance with Section 5.01(b)(vexpenditures; (iii) and make any acquisition of, or investment in, assets, stock or other securities of any other person or entity other than with respect its wholly owned subsidiaries or (iv) make any divestiture.
(e) Except as required by agreements or arrangements disclosed in its SEC Documents or its Disclosure Letter, neither it nor any of its subsidiaries or, in the case of Fresenius AG, any FWD Business Subsidiary, will grant any severance or termination pay to, or enter into, extend or amend any employment, consulting, severance or other compensation agreement with, any director, officer or other of its employees, except to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not other employees in the ordinary course and $50,000,000 in any event a manner consistent with past practice, which would bind Newco (or its subsidiary) after the Reorganization.
(Bf) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case Except as may be required to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value satisfy contractual obligations existing as of the date hereof (and disclosed to the other parties hereto) and the requirements of applicable law, and except in the agreement for such acquisition); provided that ordinary course of business, neither the Company it nor any of its Retained Subsidiaries shall subsidiaries or, in the case of Fresenius AG, any FWD Business Subsidiary, will establish, adopt, enter into, make, amend or make any elections under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, employee stock ownership, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees which would affect Newco (or its subsidiary), except in a manner consistent with past practice.
(g) It will not implement any change in its accounting principles, practices or methods, other than as may be required by German GAAP, in the case of Fresenius AG, or US GAAP, in the case of Grace and Fresenius USA, other than as may be necessary or advisable in connection with the Distribution.
(h) Neither it nor any of its subsidiaries will authorize or enter into an agreement to take any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
actions referred to in paragraphs (xa) other than capital expenditures made in accordance with Section 5.01(b)(vthrough (g) and other than purchases and licenses of film and television and production programming (includinabove.
Appears in 2 contracts
Sources: Agreement and Plan of Reorganization (Grace W R & Co /Ny/), Agreement and Plan of Reorganization (Fresenius Aktiengesellschaft)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, during the period from and after the execution date of this Agreement and prior through the earlier of the Closing or the termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law), (2) expressly required by the Transaction Documents (including as set forth in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(aPart 4.1(a) of the Company Disclosure Letter)Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly required by this Agreement, the Company shall, and shall cause each of its the Company Subsidiaries to, conduct its business in the ordinary course consistent with past practice in all material respects and use its commercially reasonable best efforts to conduct maintain and preserve intact its business organization and maintain satisfactory relationships with customers, suppliers and distributors and other Persons with whom the Retained Business Company or any Company Subsidiary has material business relations. Without limiting the foregoing, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (1) to the extent Parent shall otherwise give its prior consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), (2) as set forth in Part 4.1(a) of the Company Disclosure Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly or required by this Agreement, the Company shall not (and shall not permit any Company Subsidiary to), in each case by merger, consolidation, division, operation of law, or otherwise:
(i) amend the Company’s Organizational Documents or the Organizational Documents of any Company Subsidiary;
(ii) split, combine, subdivide, change, exchange, amend the terms of or reclassify any shares of the Company’s capital stock or other equity interests of the Company or any Company Subsidiary;
(iii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock or property) with respect to any shares of the Company’s capital stock or the capital stock or other equity interest of any Company Subsidiary, other than (A) the Company’s regular quarterly dividend on the Company Common Stock to be declared and paid in the third quarter of the Company’s 2021 fiscal year, in a quarterly amount not to exceed the amount set forth in Part 4.1(a)(iii) of the Company Disclosure Schedule, provided, that if the initial End Date is extended pursuant to Section 6.1(b), the Company may resume its regular quarterly dividend (provided, that any such quarterly dividend may not be in an aggregate amount that exceeds the aggregate amount of the Company’s most recent quarterly dividend prior to the date hereof) on the Company Common Stock until the earlier of the Closing or termination of this Agreement, or (B) dividends or distributions only to the extent paid by any wholly owned Company Subsidiary to the Company or another wholly owned Subsidiary of the Company;
(iv) acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or assets, formation of a joint venture or otherwise) (A) any other Person, (B) any equity interest in any other Person, (C) any business, or (D) any assets, except, (1) acquisitions by the Company from any wholly owned Subsidiary or among any wholly owned Subsidiaries of the Company; (2) the purchase of equipment, supplies and inventory in the ordinary course of business, (3) inbound licenses of Intellectual Property in the ordinary course of business or (4) acquisitions in one or more transactions with respect to which the aggregate consideration for all such transactions does not exceed $20,000,000 or (5) investments in any other Person in one or more transactions with respect to which the aggregate investment amount for all such transactions does not exceed $20,000,000;
(v) except in connection with any transaction between the Company and any wholly owned Subsidiary of the Company or among any wholly owned Subsidiaries of the Company, issue, sell, grant or otherwise permit to become outstanding any additional shares of, or securities convertible or exchangeable for, or options, warrants or rights to acquire, any shares of its capital stock or other equity interests, other than: (A) shares of Company Common Stock issuable upon exercise of outstanding Company Options or the vesting of outstanding Company RSUs; and (B) pursuant to the Company ESPP in the ordinary course of business consistent with past practice and in accordance with the terms thereof and of this Agreement;
(vi) except in connection with any transaction between the Company and any wholly owned Subsidiary of the Company or among any wholly owned Subsidiaries of the Company, sell, assign, transfer, lease or license to any third party, or encumber, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), any Company IP or material assets of the Company, other than: (A) sales of inventory, goods or services in the ordinary course of business or of obsolete equipment or assets in the ordinary course of business; (B) pursuant to written Contracts or commitments existing as of the date of this Agreement and set forth in Part 4.1(a)(vi) of the Company Disclosure Schedule; (C) as security for any borrowings permitted by Section 4.1(a)(viii); (D) licenses granted to customers or other third parties in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, ; or (E) purchasedispositions of assets which do not constitute Company IP, and with respect to which the fair market value of all such assets does not exceed $10,000,000 in the aggregate;
(vii) directly or indirectly repurchase, redeem or otherwise acquire any shares of its the Company’s or any Company Subsidiary’s capital stock or equity interests, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable into or exercisable for any shares of its the Company’s or any Company Subsidiary’s capital stock or equity interests, except: (other than (1A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the forfeiture of, or withholding exercise of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of repurchase rights binding on the Company Stock Plans as in effect on and existing prior to the date of this Agreement Agreement; or (B) shares of Company Common Stock accepted as payment for the exercise price of options to purchase Company Common Stock pursuant to the Company Equity Plan or for withholding Taxes incurred in connection with the exercise, vesting or settlement of Company Options and Company RSUs, as modified after the date of this Agreement applicable, in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable award;
(iiviii) merge (A) incur, redeem, repurchase, prepay, defease, or consolidate with cancel any indebtedness for borrowed money, guarantee any such indebtedness, issue or sell any debt securities or rights to acquire any debt securities (directly, contingently or otherwise) or make any loans or advances or capital contributions to any other Person, or restructure, reorganize or completely or partially liquidate except for: (other than transactions 1) repayment of the type contemplated by Section 5.01(b)(vii2021 Notes when due in accordance with their terms, including pursuant to the Company’s Rule 10b5-1 plan; (2) borrowings in an aggregate principal amount outstanding at any time not to exceed $25,000,000 incurred in the ordinary course of business pursuant to existing credit facilities or Section 5.01(b)(ixletters of credit, (3) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of any indebtedness among the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, its wholly owned Subsidiaries or the restructuring, reorganization or liquidation of, among any wholly owned Subsidiaries of the Company that would (and guarantees by the Company or its Subsidiaries in respect thereof) and (4) purchase money financings and capital leases entered into in the ordinary course of business in an aggregate amount not prevent, materially delay to exceed $25,000,000 at any time outstanding; or materially impair the Transactions);
(iiiB) except as expressly required by incur any Company Plan as in effect Lien on the date hereof: (A) establish, adopt, amend any of its material property or terminate any material Company Plan or amend the terms of any outstanding equity-based awards assets other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such and except for Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, Permitted Encumbrances;
(BA) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice adopt, terminate or amend any Company Plan other than if such action would not increase the annual expense of the given Company Plan by a material amount (but in no event will the aggregate amount of all increases in such expenses exceed $10,000,000), provided, that the Company may enter into offer letters, employment agreements and similar arrangements with respect to (1) employees below the level of Executive Corporate Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (EB) commercial paper issued increase, or accelerate the vesting or payment of, the compensation or benefits of any director, independent contractor or current or former employee of the Company or any Company Subsidiary, (C) grant any rights to severance, retention, change in control or termination pay to any director, independent contractor or current or former employee of the Company or any Company Subsidiary, (D) except in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstandingpractice, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under of employees at a level below Corporate Vice President that would not increase the Bridge Facility, refinancings or replacements thereof and number of commitments thereunder, and any refinancings or replacements Vice Presidents by more than 10% over the number of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of Vice Presidents employed by the Company as of the date of this Agreement, hire or promote any employee, or (E) terminate the employment of any employee at or above the level of Corporate Vice President (other than for cause); except, in each case, for: (1) amendments to Company Plans determined by the Company in good faith to be required to comply with applicable Legal Requirements; (2) increases in compensation or benefits required pursuant to any Company Plan in effect on the date hereof and listed in Part 4.1(a)(ix) of the Company Disclosure Schedule; (3) increases to total target cash opportunities (i.e., annual base salary or wage rates and target annual cash bonus opportunities) as set forth in Part 4.1(a)(ix) of the Company Disclosure Schedule; (4) payment of cash incentive compensation to the extent set forth in Part 4.1(a)(ix) of the Company Disclosure Schedule and (5) any other actions set forth in Part 4.1(a)(ix) of the Company Disclosure Schedule;
(x) except in the ordinary course of business and for renewals or extensions of any existing Material Contract or Material Real Property Lease entered into in the ordinary course of business, (i)(A) materially amend or terminate (except for terminations pursuant to the expiration of the existing term of any Material Contract or Material Real Property Lease) any Material Contract or Material Real Property Lease or (B) waive, release or assign any material rights under any Material Contracts or Material Real Property Leases, or (ii) enter into any Contract or agreement that, if in effect on the date of this Agreement, would constitute a Material Contract or Material Real Property Lease;
(xi) change any of its methods of financial accounting or accounting practices in any material respect other than as required by changes in GAAP;
(xii) make, change or revoke any Tax election, change or adopt any Tax accounting period or method of Tax accounting, amend any Company Return if such amendment would reasonably be expected to result in a Tax liability, file any Company Return prepared in a manner inconsistent with past practice, settle or compromise any material liability for Taxes or any Tax audit, claim, or other proceeding relating to a material amount of Taxes (except to the extent that a reserve for such Taxes has been established in the financial statements contained or incorporated by reference into the Company SEC Documents), enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar state, local or non-U.S. Legal Requirement) (except to the extent that a reserve for such Taxes has been established in the financial statements contained or incorporated by reference into the Company SEC Documents), request any Tax ruling from any Governmental Entity, surrender any right to claim a refund of Taxes, or, other than in the ordinary course of business, agree to an extension or waiver of the statute of limitations with respect to Taxes, to the extent, in each case, that such actions would reasonably be expected, individually or in the aggregate, to have a material adverse impact on any Tax liabilities of Parent or any of the Parent Subsidiaries (which would include the Company and the Company Subsidiaries) after the Closing Date;
(xiii) sell, transfer, assign, exclusively license, or otherwise dispose of to any third party (by merger, consolidation, operation of law, division or otherwise), or mortgage, encumber or exchange any material Intellectual Property owned, or purported to be owned, by the Company or any Subsidiary of the Company;
(xiv) make any capital expenditure that is not contemplated by the capital expenditure budget (the “CapEx Budget”) set forth in Part 4.1(a)(xiv) of the Company Disclosure Schedule (a “Non-Budgeted Capital Expenditure”), except that the Company or any Subsidiary of the Company may make any Non-Budgeted Capital Expenditure that, when added to all other Non-Budgeted Capital Expenditures made by the Company and the Company Subsidiaries in the same fiscal year (and with respect to the 2021 fiscal year, since the date of this Agreement) would not, in the aggregate, exceed twenty percent (20%) of the aggregate CapEx Budget for such fiscal year;
(xv) except as expressly required by applicable Legal Requirements or the Company’s Organizational Documents, convene (A) any special meeting of the Company’s stockholders other than the Company Stockholder Meeting or (B) any other meeting of the Company’s stockholders to consider a proposal that would reasonably be expected to impair, prevent or delay the consummation of the transactions contemplated hereby;
(xvi) enter into any agreement, understanding or arrangement with respect to the voting of any capital stock or other equity interests of the Company (including any voting trust), other than with respect to awards under the Company Equity Plan otherwise permitted under this Agreement or in connection with the granting of revocable proxies in connection with any meeting of the Company’s stockholders;
(xvii) adopt a plan of (A) complete or partial liquidation of the Company or any Subsidiary of the Company or (B) dissolution, merger, consolidation, division, restructuring, recapitalization or other reorganization, other than, in the case of clause (B), transactions between or among direct or indirect wholly owned Subsidiaries of the Company;
(xviii) (A) settle or compromise any litigation, claim, suit, action or proceeding, except for settlements or compromises that (1) involve solely monetary remedies with a value not in excess of $35,000,000 in the aggregate to be paid by the Company and its Subsidiaries, (2) do not impose any restriction on the Company’s business or the business of the Company Subsidiaries, (3) do not relate to any litigation, claim, suit, action or proceeding by the Company’s stockholders in connection with this Agreement or the Merger and (4) do not include an admission of liability or fault on the part of the Company or any Company Subsidiary, or (B) commence any material litigation or other claim, suit, action or proceeding, other than (1) in the ordinary course of business consistent with past practice or (2) commencing any counterclaim to preserve, protect or enforce any Company IP or material assets of the Company;
(xix) materially reduce the amount of insurance coverage or fail to renew or maintain any material existing insurance policies;
(xx) (A) amend any Company Permits in connection a manner that adversely impacts the Company’s ability to conduct its business in any material respect or (B) terminate or allow to lapse any material Company Permits;
(xxi) (A) fail to pay any issuance, renewal, maintenance and other payments that become due with a Sky Acquisition and not for speculative purposes; provided that respect to any material Company Registered IP or otherwise abandon, cancel, or permit to lapse any material Company Registered IP, other than in its reasonable business judgment or in the ordinary course of business consistent with past practice, or (B) authorize the disclosure to any third party of any material Trade Secret included in the Company shall consult with Parent prior to entering into hedging activities IP in connection with Indebtedness a way that results in loss of the type described in clauses (G) or (H) abovetrade secret protection, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing other than in the ordinary course of business consistent with past practice;
(vxxii) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) except in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinind
Appears in 2 contracts
Sources: Merger Agreement (Xilinx Inc), Merger Agreement (Advanced Micro Devices Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, that from and after the execution date of this Agreement and prior to until the First Effective Time (Time, unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed), and except as (1) otherwise expressly contemplated by this Agreement or as required by applicable LawLaw or Contracts existing as of the date of this Agreement, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) business of the Company Disclosure Letter)and its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, shall use its reasonable best efforts to conduct the Retained Business efforts, when in the ordinary course best interests of business consistent with past practice, and the Company shalland its Subsidiaries, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ their existing relations and goodwill with Governmental EntitiesEntities with jurisdiction over health-care related matters, customers, manufacturers (which shall not include the payment of additional money or concessions other than pursuant to existing contractual terms), suppliers, distributors, licensors, creditors, lessors, lessors and employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the present employees and agents of the Company and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless i) as otherwise expressly contemplated by this Agreement or as required by Contracts existing as of the date of this Agreement, (ii) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3iii) otherwise expressly disclosed as set forth in Section 5.01(b6.1(a) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws by laws or other applicable governing instruments or amend any term of the Shares, other than in furtherance of this Agreement;
(ii) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company that are not obligors or guarantors of third-party indebtedness, or adopt a plan of liquidation;
(iii) except as set forth in Section 6.1(a)(xi), acquire assets outside of the ordinary course of business from any other Person with an aggregate value or purchase price in excess of $750,000, other than capital expenditures within the Company’s capital expenditure budget as set forth in Section 6.1(a)(xi) of the Company Disclosure Letter;
(iv) enter into any material line of business other than the line of business in which the Company and its Subsidiaries is currently engaged as of the date of this Agreement or, except for the products set forth in Section 6.1(a)(iv) of the Company Disclosure Letter, distribute products other than the products that the Company and its Subsidiaries are currently distributing as of the date of this Agreement;
(v) other than the issuance of Shares (i) pursuant to the ESPP as contemplated by Section 4.5 or (ii) pursuant to Company Options granted prior to the date of this Agreement or as contemplated by Section 6.1(a)(xix), issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than amendments to the governing documents issuance of any shares by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair another wholly owned Subsidiary of the Initial Merger or the other TransactionsCompany), (B) split, combine, subdivide or reclassify its outstanding securities convertible or exchangeable into or exercisable for any shares of such capital stock stock, or any Rights;
(except for vi) other than in the ordinary course of business, create or incur any such transaction by a wholly owned subsidiary Lien (other than Permitted Liens) material to the Company or any of its Subsidiaries on any assets used in the businesses of the Company which remains or any of its Subsidiaries having a value in excess of $500,000;
(vii) make any loans, advances or capital contributions to, or investments in, any Person (other than the Company or any direct or indirect wholly owned Subsidiary after consummation of such transaction), the Company) in excess of $500,000 in the aggregate;
(Cviii) declare, set aside or pay any dividend or distribution payable (whether in cash, stock or property (or any combination thereof) in with respect of to any shares of its capital stock (of any Subsidiary, except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary Subsidiaries of the Company and pro rata dividends or distributions payable to another direct or indirect holders of interests in non-wholly owned Subsidiary Subsidiaries;
(ix) reclassify, split (including a reverse split), recapitalize, subdivide or repurchase, redeem or otherwise acquire, directly or indirectly, any of its capital stock or Rights;
(x) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) in the ordinary course of business not to exceed $500,000 in the aggregate or indebtedness for borrowed money incurred under existing credit facilities, (B) refinancings on commercially reasonable terms or (C) guarantees by the Company of indebtedness of wholly owned Subsidiaries of the Company or guarantees by Subsidiaries of indebtedness of the Company;
(2xi) normal semiannual cash dividends on the Common Stock except as described set forth in Section 5.01(b)(i6.1(a)(xi) of the Company Disclosure Letter, make or authorize any capital expenditure in excess of $750,000;
(xii) other than in the ordinary course of business, enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement (other than as permitted elsewhere in this Section 6.1(a));
(xiii) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP or except as the Company, based upon the advice of its independent auditors after consultation with Parent, determines in good faith is advisable to conform to best accounting practices;
(xiv) except as set forth in Section 6.1(a)(xiv) of the Company Disclosure Letter, provide an indemnity in respect of any pending or threatened civil, criminal or administrative actions, suits, claims, litigations, arbitrations, investigations or other proceedings for an amount to be paid by the Company or any of its Subsidiaries in excess of, or that would reasonably be expected to be in excess of, $250,000 or which would be reasonably likely to have any adverse impact on the operations of the Company or any of its Subsidiaries, or indemnify any Person other than pursuant to a contractual obligation to do so;
(xv) enter into any consent decree, enter a guilty or nolo contendre plea, settle any civil, criminal or administration actions, suits, claims, litigations, arbitrations, investigations or other proceedings for an amount in excess of $1,000,000 or enter into any settlement that would reasonably be expected to change in any material respect the Company’s or any of its Subsidiaries’ current methods of operations;
(xvi) other than in the ordinary course of business, (A) amend or modify in any material respect, or terminate or waive any material right or benefit under, any Material Contract (other than as permitted elsewhere in this Section 6.1(a)) or (B) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $500,000;
(xvii) except as required by Law, make any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement or adopt any method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods or settle or compromise any material tax liability;
(xviii) sell, lease, license or otherwise dispose of any material assets of the Company or its Subsidiaries except in the ordinary course of business or obsolete assets;
(xix) terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify any Company Benefit Plans, except new hire grants committed to in writing prior to the date of this Agreement in the ordinary and usual course of business; or
(xx) increase the salary, wage, bonus or other compensation payable or to become payable to the directors, officers or employees of the Company or any of its Subsidiaries, except in the ordinary and usual course of business; or
(xxi) agree or commit to do any of the foregoing. Notwithstanding anything to the contrary contained in this Section 6.1(a), to the extent they relate to the Partnerships, the Company’s obligations in this Section 6.1(a) shall be limited to taking such steps, such as the exercise of any veto rights, that are within the control of the Company and its Subsidiaries (Dother than the Partnerships).
(b) From the date of this Agreement until the Effective Time, except (i) as otherwise expressly required by this Agreement or other Contract existing on the date of this Agreement, (ii) as the Company may approve in writing (such approval not to be unreasonably withheld or delayed) or (iii) as set forth in Section 6.1(b) of the Parent Disclosure Letter, Parent will not, and will not permit its Subsidiaries to:
(i) adopt or propose any material change in Parent’s certificate of incorporation or by laws or amend any term of the shares of Parent Common Stock;
(ii) enter into any agreement with respect to, or consummate, any acquisition by Parent or its Subsidiaries of any Person or assets, the consummation of which would require the filing of a current report on Form 8-K pursuant to Item 2.01 thereof with the voting SEC and which would reasonably be expected to materially hinder or delay the transactions contemplated by this Agreement;
(iii) other than the issuance of shares of Parent Common Stock issued for fair value in arm’s length transactions and other than the issuance of shares in the ordinary course of business consistent with past practices pursuant to Parent employee benefit plans, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of Parent or any its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of Parent to Parent or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate Parent or any of its Subsidiaries to issue or sell any shares of such capital stock or such convertible or exchangeable securities;
(Eiv) purchasedeclare, set aside or pay any dividend or distribution (whether in cash, stock or property or any combination thereof) on any shares of Parent Common Stock or on any shares of capital stock of any Subsidiary, other than (A) by wholly owned Subsidiaries and pro rata dividends or distributions payable to holders of interests in non-wholly owned Subsidiaries and (B) Parent’s regular quarterly dividend, including any increases thereof, at record and payment dates consistent with past practices;
(v) reclassify, split (including a reverse split), recapitalize, subdivide or repurchase, redeem or otherwise acquire at prices above fair market value, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposesstock; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;or
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend agree or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Accredo Health Inc), Merger Agreement (Medco Health Solutions Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after Without limiting the execution Company's obligations under Section 6.5 of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writingAgreement, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by set forth in the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) corresponding section of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoingLetter or otherwise as expressly contemplated hereby, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time (unless Parent Cingular shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned withheld or delayed), the business of it and which determination its Subsidiaries shall take into account be conducted in the ordinary course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of the present employees and agents of the Company Overview Presentationand its Subsidiaries. Without limiting the Company's obligations under Section 6.5 of this Agreement and without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the Effective Time, the Company will not and will not permit its Subsidiaries to (unless Cingular shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed):
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except as for any such transactions among wholly-owned Subsidiaries of the Company that are not obligors or guarantors of third party indebtedness;
(1iii) required by applicable Lawacquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $50,000,000, (2) expressly required by other than acquisitions pursuant to Contracts to the Transaction Documents (including extent in connection with effect immediately prior to the Separation execution of this Agreement and the Distribution) or (3) otherwise expressly disclosed set forth in Section 5.01(b6.1(a)(iii) of the Company Disclosure Letter or as otherwise set forth in Section 6.1(a)(iii) of the Company Disclosure Letter;
(iv) other than pursuant to Contracts to the extent in effect as of immediately prior to the execution of this Agreement and set forth in Section 6.1(a)(iv) of the Company Disclosure Letter, and other than the issuance of shares of Common Stock upon the exercise of outstanding Company Options and pursuant to other equity-based awards granted under the Stock Plans and shares under the Company's 401(k) plan and the deferred compensation plans, in each case, in accordance with their terms, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) other than in connection with existing receivables facilities and securitizations and renewals thereof in the ordinary course of business, create or incur any Lien on assets of the Company shall not and shall not permit or any of its Subsidiaries to:that is material, individually or in the aggregate, to the Company and its Subsidiaries taken as a whole;
(ivi) except with respect other than acquisitions pursuant to SpinCo Contracts to the extent in effect as of immediately prior to the execution of this Agreement and set forth in Section 6.1(a)(vi) of the SpinCo Subsidiaries Company Disclosure Letter, make any loan, advance or capital contribution to or investment in any Person (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any a wholly-owned Subsidiary of the Company that would not prevent, delay or impair Company) in excess of $25,000,000 in the Initial Merger or the other Transactions), aggregate;
(B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or other distributions paid by a any direct or indirect wholly wholly-owned Subsidiary of the Company to another the Company or to any other direct or indirect wholly wholly-owned Subsidiary of the Company and periodic dividends and other periodic distributions by non-wholly-owned Subsidiaries consistent with past practices) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(viii) other than the redemption of the Series C Preferred Stock or the Series E Preferred Stock in accordance with the Company's certificate of incorporation, reclassify, combine, split, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares share of its capital stock stock;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) indebtedness for borrowed money incurred in the ordinary course of business not to exceed $50,000,000 in the aggregate, (B) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money on customary commercial terms, (C) guarantees incurred in compliance with this Section 6.1(a) by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (D) interest rate swaps on customary commercial terms, consistent with past practices and not to exceed $750,000,000 of notional debt in the aggregate;
(x) except as set forth in Section 6.1(a)(x) of the Company Disclosure Letter, make or authorize any capital expenditure;
(xi) enter into any Material Contract that would have ' been a Material Contact as described in clauses (J), (L) or (M) of Section 5.1(j)(i) had it been entered into prior to the execution of this Agreement, and other than in the ordinary course of business, enter into any other Material Contract that would have been a Material Contract as described in Section 5.1(j)(i) (other than as described in clauses (1J), (L) pursuant or (M)) had it been entered into prior to the forfeiture of, or withholding execution of Taxes this Agreement;
(xii) make any changes with respect toto accounting policies or procedures, Company Restricted Stock Unitsexcept as required by changes in GAAP or by Law or except as the Company, Company Deferred Stock Units based on the advice of its independent auditors and after consultation with Cingular, determines in good faith is advisable to conform to best accounting practices;
(xiii) settle any litigation or Company Performance Stock Units, other proceedings before or threatened to be brought before a Governmental Entity for an amount in each case in accordance with past practice and with excess of $10,000,000 or which would be reasonably likely to have any adverse impact on the terms operations of the Company Stock Plans as or any of its Subsidiaries or on any current or future litigation or other proceeding of the Company or any of its Subsidiaries; provided, that any litigation or other proceeding with respect to an item relating to Taxes may be settled for an amount that is not in effect excess of the amount reserved or accrued for such item on the most recent balance sheet contained in the Company Reports filed prior to the date of this Agreement (which reserve and accrual information shall be furnished by the Company to Cingular upon Cingular's request);
(xiv) other than in the ordinary course of business, amend or modify in any material respect, or terminate or waive any material right or benefit under any Material Contract;
(xv) except as modified required by Law, make any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement or adopt any material method therefor that is inconsistent with elections made, positions taken or methods used in accordance preparing or filing similar Tax Returns in prior periods. Notwithstanding the foregoing, the Company shall consult with Cingular and its Representatives prior to claiming any depreciation allowance under Section 168(k) of the terms of this AgreementCode;
(xvi) sell, lease, license, or (2) purchases, repurchases, redemptions or other acquisitions of securities otherwise dispose of any wholly owned Subsidiary assets of the Company by the Company or any other wholly owned Subsidiary its Subsidiaries except for ordinary course sales of mobile telephone equipment to customers of the Company, services provided in the ordinary course of business or obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $25,000,000 in the aggregate, other than pursuant to Contracts in effect prior to the execution of this Agreement and set forth in Section 6.1(a)(iii) of the Company Disclosure Letter or as otherwise set forth in Section 6.1(a)(iii) of the Company Disclosure Letter and other than any dispositions of assets to the extent used as consideration for acquisitions that are permitted pursuant to Section 6.1(a)(iii);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iiixvii) except as expressly required pursuant to existing written, binding agreements in effect prior to the execution of this Agreement, as otherwise required by any Company Plan as in effect on the date hereof: (A) establishLaw, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (Bwhich with respect to annual bonus plans and performance share awards is set forth in Section 6.1(a)(xvii) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its SubsidiariesDisclosure Letter), (Ci) increase the compensation, bonus enter into any commitment to provide any severance or pension, welfare termination benefits to (or other benefits of amend any existing arrangement with) any director, officer or employee of the Company or any of its Subsidiaries, except in (ii) increase the ordinary course benefits payable under any existing severance or termination benefit policy or employment agreement (other than as required to be increased pursuant to the existing terms of business consistent any such policy or agreement), (iii) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement) with past practice with respect to any director or officer of the Company or any of its Subsidiaries other than for new hires, (1iv) employees below establish, adopt, amend, terminate or make any new awards under any bonus, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any director, officer or employee of the level Company or any of Executive Vice President and its Subsidiaries (2v) employees at or above increase the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee employee, consultant or other service provider independent contractor of the Company or any of its Subsidiaries, or (Evi) amend the terms of any outstanding Company Option or other equity-based award; provided, that the Company shall in no event take any action to accelerate the vesting or payment of compensation or benefits under amend its severance plans, except as required by applicable Law;
(xviii) fail to initiate appropriate steps to renew any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of material FCC Licenses held by the Company or any of its SubsidiariesSubsidiaries that are scheduled to terminate prior to or within 60 days after the Effective Time;
(ivxix) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) engage in the ordinary course conduct of any business requiring the receipt or transfer of a License issued by a Governmental Entity other than engaging in the mobile wireless voice and data business in the U.S. and activities incident thereto, other than any other current lines of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations geographic locations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to as expressly permitted by Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v6.1(a)(iii) of the Company Disclosure Letter;
(vixx) except as otherwise permitted hereby with respect to the Retained Businessemployees, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of enter into any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses Contract with or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually engage in any event (material transaction with DoCoMo or any other than transactions among Affiliate of the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation AgreementsCompany;
(viixxi) with respect to the Retained Businessadopt a technology platform other than existing technologies, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Propertyanalog, which is governed by Section 5.01(b)(vi)TDMA, EDGE, GSM and GPRS), except for HSDPA or UMTS and W-CDMA (Aincluding in each case the standards set forth on Section 6.1(a)(xxi) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viiiDisclosure Letter);
(ixxxii) with respect to amend, modify or waive any provision under the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(vRights Agreement; and
(xxiii) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend agree or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date foregoing.
(b) Each of SBC and BellSouth will cause Cingular and Cingular Wireless to take all action necessary to consummate the agreement for such acquisition); provided that neither transactions contemplated by this Agreement subject to the Company terms and conditions hereof. Neither SBC nor BellSouth will take or permit any of its Retained Subsidiaries shall enter into to take any action that at the time of taking such transaction that would, or would action is reasonably be expected to, prevent, materially delay or materially impair likely to prevent the consummation of the Transactions;
Merger. Except as set forth in the corresponding section of the disclosure letter delivered by SBC to the Company at the time of entering into this Agreement (xthe "SBC Disclosure Letter"), neither SBC nor BellSouth shall, and each shall cause its Subsidiaries not to, prior to the Termination Date, (i) enter into any definitive agreement for the acquisition of any business or Person which provides commercial mobile wireless voice and data services offered to the public utilizing frequencies and spectrum licensed by the FCC, other than capital expenditures made the provision of such services in accordance de minimis amounts or (ii) take any action which would, at the time the action is taken, reasonably be expected to materially interfere with Section 5.01(b)(v) its ability to make available to Cingular or the Paying Agent as of the Effective Time funds sufficient for its Specified Interest of the Merger Consideration. Each of SBC and other than purchases BellSouth will, subject to the terms and licenses conditions of film and television and production programming (includinthis Agreement, make available to Cingular or the Paying Agent its Specified Interest of the Merger Consideration.
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Cingular Wireless LLC), Agreement and Plan of Merger (Cingular Wireless LLC)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, during the period from and after the execution date of this Agreement and prior through the earlier of the Closing or the termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law), (2) expressly required by the Transaction Documents (including as set forth in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(aPart 4.1(a) of the Company Disclosure Letter)Schedule, (3) as may be required by applicable Legal Requirements, (4) in connection with any COVID-19 Measures or (5) as expressly required by this Agreement, the Company shall, and shall cause each of its the Company Subsidiaries to, use its reasonable best efforts to conduct its business in the Retained Business ordinary course consistent in all material respects with past practice and to maintain and preserve intact its business organization and maintain satisfactory relationships with customers, suppliers and distributors and other Persons with whom the Company or any Company Subsidiary has material business relations. Without limiting the foregoing, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (1) to the extent Parent shall otherwise give its prior consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), (2) as set forth in Part 4.1(a) of the Company Disclosure Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly permitted or required by this Agreement, the Company shall not (and shall not permit any Company Subsidiary to), in each case by merger, consolidation, division, operation of law, or otherwise:
(i) amend the Company’s Organizational Documents or the Organizational Documents of any Company Subsidiary;
(ii) split, combine, subdivide, change, exchange, amend the terms of or reclassify any shares of the Company’s capital stock or other equity interests of the Company or any Company Subsidiary;
(iii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock or property) with respect to any shares of the Company’s capital stock or the capital stock or other equity interest of any Company Subsidiary, other than dividends or distributions only to the extent paid by any wholly owned Company Subsidiary to the Company or another wholly owned Subsidiary of the Company;
(iv) acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or assets, formation of a joint venture or otherwise) (A) any other Person, (B) any equity interest in any other Person, (C) any business, or (D) any assets, except (1) acquisitions by the Company from any wholly owned Subsidiary or among any wholly owned Subsidiaries of the Company, (2) the purchase of equipment, services, supplies and inventory in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed inbound licenses of Intellectual Property in Section 5.01(bthe ordinary course of business consistent with past practice;
(v) of except in connection with any transaction between the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) among any wholly owned Subsidiaries of the Company Disclosure Letter)Company, (D) enter into issue, sell, grant or otherwise permit to become outstanding any agreement with respect to the voting of its capital stockadditional shares of, or (E) purchasesecurities convertible or exchangeable for, repurchaseor options, redeem warrants or otherwise acquire rights to acquire, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any other equity interests, other than shares of its capital stock (other than (1) pursuant to Company Common Stock issuable upon exercise of Company Options or the forfeiture of, or withholding vesting of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock UnitsRSUs, in each case in accordance with past practice and with case, to the terms extent such Company Options or Company RSUs are outstanding as of the Company Stock Plans as in effect on the date of this Agreement and such exercise or settlement is in accordance with the terms thereof;
(vi) except as expressly contemplated by this Agreement, take any action to accelerate the vesting of any Assumed Company Option or any Assumed Company RSU Award (other than to implement any existing agreements or arrangement for such acceleration in effect as modified after of the date of this Agreement and set forth on the Company Disclosure Schedule);
(vii) except in accordance connection with any transaction between the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of Company and any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, among any wholly owned Subsidiaries of the Company that would not preventCompany, materially delay sell, assign, transfer, lease or materially impair the Transactionslicense to any third party, or encumber, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise);
(iii) except as expressly required by , any Company Plan as in effect on IP, Material Communications Permit, or right conferred thereby, or material assets of the date hereofCompany (including any Company Owned Real Property), other than: (A) establishsales of inventory, adopt, amend goods or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan services in the ordinary course of business consistent with past practice that does not materially increase or of obsolete equipment or assets in the cost ordinary course of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, business consistent with past practice; (B) grant pursuant to written Contracts or provide any transaction or retention bonuses to any director, officer, employee or other service provider commitments existing as of the date of this Agreement and set forth in Part 4.1(a)(vii) of the Company or any of its Subsidiaries, Disclosure Schedule; (C) increase the compensation, bonus or pension, welfare non-exclusive licenses granted to customers or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except third parties in the ordinary course of business consistent with past practice or (D) dispositions of assets which do not constitute Company IP, and with respect to which the fair market value of all such assets does not exceed $500,000 in the aggregate;
(1viii) directly or indirectly repurchase, redeem or otherwise acquire any shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable for any shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, except: (A) shares of Company Common Stock repurchased from employees below the level of Executive Vice President and (2) or consultants or former employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider consultants of the Company pursuant to the exercise of repurchase rights existing prior to the date of this Agreement; or any (B) shares of its SubsidiariesCompany Common Stock accepted as payment for the exercise price of options to purchase Company Common Stock pursuant to the Company Equity Plans or for withholding Taxes incurred in connection with the exercise, (E) take any action to accelerate the vesting or payment settlement of compensation or benefits under any Company Plan (including any equity-based awards)Options and Company RSUs, (F) change any actuarial or other assumptions used to calculate funding obligations as applicable, in accordance with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees terms of the Company or any of its Subsidiariesapplicable award;
(ivix) incur any Indebtedness indebtedness for borrowed money, guarantee any such indebtedness, issue or issue sell any warrants debt securities or other rights to acquire any Indebtednessdebt securities (directly, contingently or otherwise) or make any loans or advances or capital contributions to any other Person, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) for: (1) to repayment of indebtedness and reborrowings of such repaid amounts under the extent not drawn upon and payments are not triggered thereby, Existing Company Credit Facility in accordance with the terms thereof; (2) letters of credit, bank guarantees, security or performance bonds or similar credit support instruments at any time, not to exceed $2,000,000 in the ordinary course of business consistent with past practice; (3) advancement obligations under the Organizational Documents of the Company or the Company Subsidiaries or indemnification agreements with the Company or the Company Subsidiaries and (4) any indebtedness among the Company and its wholly owned Subsidiaries or among any wholly owned Subsidiaries of the Company (and guarantees by the Company or its Subsidiaries in respect thereof);
(x) (A) adopt, terminate or amend any Company Plan, (B) increase, or accelerate the vesting or payment of, the compensation or benefits of any director, independent contractor or current or former employee of the Company or any Company Subsidiary, (C) grant any rights to severance, retention, change in control or termination pay to any current or former director, independent contractor or current or former employee of the Company or any Company Subsidiary, (D) hire or promote any employee above the level of Vice President or whose annual base compensation exceeds $250,000, or (E) terminate the employment of any employee of the Company or any Company Subsidiary above the level of Vice President (other than for cause); except, in each case, for: (1) amendments to Company Plans determined by the Company in good faith to be required to comply with applicable Legal Requirements; (2) overdraft facilities as permitted by the terms of the Company Plans in effect on the date of this Agreement or as otherwise expressly contemplated by this Agreement; (3) hiring or promotion of employees below the level of Vice President and whose annual base compensation does not or will not (after giving effect to any such promotion) exceed $250,000; and (4) the grant of annual equity awards and payment of cash management programs, in each case issued, made incentive compensation as contemplated by Part 4.1(a)(x) of the Company Disclosure Schedule;
(xi) except for renewals or extensions of any existing Material Contract entered into in the ordinary course of business consistent with past practice, (Ei)(A) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, materially amend or terminate (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or except for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial terminations pursuant to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal expiration of the existing revolving and term loan facilities of the YES Facility and any refinancing thereofMaterial Contract) any Material Contract or (B) waive, release or assign any material rights under any Material Contracts, or (ii) enter into any Contract or agreement that, if in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of effect on the date of this Agreement in the ordinary course of business consistent Agreement, would constitute a Material Contract (other than Contracts entered into with past practice Top Customers or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing Top Suppliers in the ordinary course of business consistent with past practice);
(vxii) change any of its methods of financial accounting or accounting practices in any material respect other than as required by changes in GAAP;
(xiii) change or revoke any material Tax election, change or adopt any Tax accounting period or material method of Tax accounting, amend any material Company Return if such amendment would reasonably be expected to result in a material Tax liability, file any material Tax Return prepared in a manner materially inconsistent with respect past practice, settle or compromise any material liability for Taxes or any Tax audit, claim, or other proceeding relating to a material amount of Taxes, enter into any “closing agreement” within the Retained Businessmeaning of Section 7121 of the Code (or any similar state, local or non-U.S. Legal Requirement) if such agreement would reasonably be expected to result in a material Tax liability or have a material impact on Taxes, request any Tax ruling from any Governmental Entity, surrender any right to claim a material refund of Taxes, or, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% practice, agree to an extension or waiver of the amounts reflected in the Company’s capital expenditure budget for each statute of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) limitations with respect to a material amount of the Company Disclosure LetterTaxes;
(vixiv) with respect to the Retained Businesssell, transfer, leaseassign, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), or mortgage, encumber or exchange any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transferowned, or encumberpurported to be owned, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, including, for the avoidance of doubt, granting customary profit participation rights any sale, transfer, assignment, license, or entering into customary film other disposition of, or television financing partnerships mortgage, encumbrance or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant exchange of any shares such material Intellectual Property to or with any Affiliate of capital stock the Company (other than non-exclusive licenses granted in the ordinary course of business), or modify, amend, cancel, terminate, waive, release or assign any Company IP License or any securities convertible rights, claims, obligations or exchangeable benefits thereunder or enter into or exercisable forany Contract that would have been a Company IP License had it been entered into prior to the Effective Time, or in each case, with respect to any optionsnonmaterial Company IP License, warrants or other rights to acquire, any such shares for purposes except in the ordinary course of this Section 5.01(b)(viii)business;
(ixxv) make aggregate capital expenditures in excess of one hundred ten percent (110%) of the amounts contemplated by the annual capital expenditure budget set forth in Part 4.1(a)(xv) of the Company Disclosure Schedule;
(xvi) except as expressly required by applicable Legal Requirements or the Company’s Organizational Documents, convene (A) any special meeting of the Company’s stockholders other than the Company Stockholder Meeting or (B) any other meeting of the Company’s stockholders to consider a proposal that would reasonably be expected to impair, prevent or delay the consummation of the transactions contemplated hereby; provided, that nothing in this clause (xvi) shall prevent the Company from holding its annual meeting of stockholders for the election of directors and such other matters that shall be required to be brought before any such meeting under any applicable law, rule or regulation or that shall be brought before any such meeting by a stockholder of the Company who complies with the requirements of Section 1.3 of the bylaws of the Company;
(xvii) enter into any agreement, understanding or arrangement with respect to the Retained Businessvoting of any capital stock or other equity interests of the Company (including any voting trust), other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming awards under the Company Equity Plans otherwise permitted under this Agreement or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess connection with the granting of revocable proxies in connection with any meeting of the Company’s stockholders;
(xviii) adopt a plan of (A) complete or partial liquidation of the Company or any Subsidiary of the Company or (B) dissolution, merger, consolidation, division, restructuring, recapitalization or other reorganization;
(xix) commence, settle or compromise any litigation, claim, suit, action or proceeding, except for settlements or compromises that (A) involve solely monetary remedies with a value not in excess of $25,000,000 if 500,000 in the transaction is aggregate to be paid by the Company and its Subsidiaries, (B) do not impose any restriction on the Company’s business or the business of the Company Subsidiaries, (C) do not relate to any litigation, claim, suit, action or proceeding by the Company’s stockholders in connection with this Agreement or the Merger and (D) do not include an admission of liability or fault on the part of the Company or any Company Subsidiary;
(xx) materially reduce the amount of insurance coverage or fail to renew or maintain any material existing insurance policies;
(xxi) amend or terminate any Company Permits in a manner that adversely impacts the Company’s ability to conduct its business in any material respect;
(xxii) (A) fail to pay any issuance, renewal, maintenance and other payments that become due with respect to any material Company Registered IP or otherwise abandon, cancel, or permit to lapse any material Company Registered IP, other than in its reasonable business judgment or in the ordinary course and $50,000,000 in any event of business consistent with past practice, or (B) $50,000,000 individually or $200,000,000 authorize the disclosure to any third party of any material Trade Secret included in the aggregate Company IP in a way that results in loss of trade secret protection, other than in the ordinary course of business consistent with past practice; or
(xxiii) authorize, approve or enter into any yearagreement or make any commitment to take any of the actions described in clauses “(i)” through “(xxii)” of this sentence.
(b) Parent agrees that, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (1) to the extent the Company shall otherwise give its prior consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), (2) as set forth in Part 4.1(b) the Parent Disclosure Schedule, (3) as may be required by applicable Legal Requirements, (4) in connection with any COVID-19 Measures or (5) as expressly required by this Agreement, Parent shall, and shall cause the Parent Subsidiaries to, use reasonable best efforts to conduct its business in the ordinary course consistent in all material respects with past practice and to maintain and preserve intact its business organization. Without limiting the foregoing, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (1) to the extent the Company shall otherwise give its prior consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), (2) as set forth in Part 4.1(b) of the Parent Disclosure Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly permitted or required by this Agreement, Parent and Acquisition Sub shall not (and shall not permit any Parent Subsidiary to), in each case to acquire any business, whether by merger, consolidation, purchase division, operation of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that wouldlaw, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;otherwise:
(xi) other than capital expenditures made amend Parent’s or Acquisition Sub’s Organizational Documents or amend the Organizational Documents of any Parent Subsidiary in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinany manner that would be adv
Appears in 2 contracts
Sources: Merger Agreement (RigNet, Inc.), Merger Agreement (Viasat Inc)
Interim Operations. (a) The Except as set forth in the corresponding section of the Company Disclosure Schedule or otherwise as expressly provided herein, subject to applicable Law, the Company covenants and agrees as to itself and its Subsidiaries that, from the date of this Agreement until the Effective Time, the business of the Company and after its Subsidiaries shall be conducted only in the ordinary course and, to the extent consistent therewith, the Company and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations intact and maintain their existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, key employees and business associates and keep available the services of the present key employees of the Company and its Subsidiaries.
(b) Without limiting the generality of Section 7.1(a) and in furtherance thereof, except as set forth in the corresponding section of the Company Disclosure Schedule or as otherwise expressly provided herein, from the date of this Agreement until the Effective Time, the Company shall not and shall not permit its Subsidiaries to (unless Parent shall otherwise approve in writing, in its sole discretion):
(i) adopt or propose any change in its certificate of incorporation or By-Laws (or similar governing documents);
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company;
(iii) acquire assets outside of the ordinary course of business from any Persons with a purchase price in excess of $100,000 in the aggregate except pursuant to Contracts in effect as of the date of this Agreement;
(iv) other than (A) as required by the terms of Contracts in effect as of the date of this Agreement, (B) upon the exercise of outstanding Company Options or Company Common Warrants or warrants to purchase Series B Stock, (C) pursuant to the terms of the Debentures (to the extent required by such terms) or (D) upon conversion of outstanding shares of Series A Stock and Series B Stock, in each case, in accordance with their terms, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any Company Subsidiary (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for (i) dividends or other distributions by any direct or indirect wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly-owned Subsidiary of the Company, (ii) periodic dividends and other periodic distributions by non-wholly-owned Subsidiaries of the Company in the ordinary course of business, and (iii) declaration and payment of scheduled dividends with respect to the Series A Stock);
(vi) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(vii) incur any third-party indebtedness for borrowed money or guarantee indebtedness or any other obligation of another Person other than in the ordinary course of business consistent with past practice and in compliance with the Company’s existing Contracts;
(viii) enter into any Contract that would have been a Material Contract had it been entered into prior to the execution of this Agreement and prior Agreement, other than any such Contract (A) entered into in the ordinary course of business or (B) providing for any capital expenditure to the First extent permitted by Section 7.1(c)(ii);
(ix) other than in the ordinary course of business, amend or modify in any material respect, or terminate or waive any material right or benefit under, any Material Contract;
(x) make any changes with respect to accounting policies or practices, except as required by changes in GAAP or by Law;
(xi) settle any litigation or other proceedings before or threatened to be brought before a Governmental Entity or arbitral proceeding for an amount payable by or on behalf of the Company or any Subsidiary in excess of $100,000 in the aggregate for all such litigation or proceedings (exclusive of any amounts to be received by the Company in reimbursement of such settlement amount, whether under any insurance policy or indemnity, other than such amounts that are contested) or which would be reasonably likely to have any material adverse impact on the operations of the Company or any of its Subsidiaries or on any current or future litigation or other proceeding of the Company or any of its Subsidiaries;
(xii) sell, lease, license or otherwise dispose of any assets of the Company or its Subsidiaries except for sales of (A) products or services provided in the ordinary course of business or (B) other assets in aggregate amount not in excess of $100,000 in the aggregate, and other than pursuant to Contracts in effect as of the date of this Agreement;
(xiii) engage in the conduct of any new line of business; or
(xiv) agree, resolve or commit to do any of the foregoing.
(c) Without limiting the generality of Section 7.1(a) and in furtherance thereof, except as set forth in the corresponding section of the Company Disclosure Schedule or as otherwise expressly provided herein, from the date of this Agreement until the Effective Time Time, the Company shall not and shall not permit its Subsidiaries to (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned withheld or delayed, delayed and except as (1) required by applicable Law, (2) expressly required by which shall be subject to the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(aprocedures set forth on Schedule 7.1(c) of the Company Disclosure Letter)Schedule):
(i) other than pursuant to Contracts in effect as of the date of this Agreement, make any loan, advance or capital contribution to or investment in any Person (other than a wholly-owned Subsidiary of the Company) outside the ordinary course of business;
(ii) make or authorize any capital expenditure in excess of $100,000 in the aggregate;
(iii) except as required by Law, make any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement or adopt any material method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods;
(iv) other than pursuant to Contracts in effect as of the date of this Agreement or as otherwise required by Law, (A) enter into any new employment or compensatory agreements with, or increase the compensation and employee benefits of, any employee, consultant, or director of the Company shall, and shall cause each or any of its Subsidiaries to(including entering into any bonus, use severance, change of control, termination, reduction-in-force or consulting agreement or other employee benefits arrangement or agreement pursuant to which such person has the right to any form of compensation from the Company or any of its reasonable best efforts Subsidiaries), (B) hire any employee to conduct fill a position at the Retained Business level of (i) executive officer or (ii) vice president or above who reports directly to an executive officer, or (C) adopt or amend in any respect, or accelerate vesting or payment under, any Benefit Plan in the case of clauses (A) and (C) above other than in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;or
(v) with respect to the Retained Businessagree, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make resolve or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Moscow Cablecom Corp), Merger Agreement (Renova Media Enterprises Ltd.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from From and after the execution date of this Agreement and prior to until the First earlier of the Effective Time and the termination of this Agreement, except (unless the following exceptions (i)–(v), the “Interim Covenant Exceptions”) (i) as otherwise required or expressly permitted by this Agreement, (ii) as may be required by applicable Law, (iii) for any actions taken reasonably and in good faith as a result of COVID-19 or to respond to or comply with COVID-19 Measures, (iv) as may be consented to in writing by Parent shall otherwise approve in writing, (which approval consent shall not be unreasonably withheld, conditioned delayed or delayed, and except as conditioned); provided that Parent shall be deemed to have consented in writing if it provides no response or good faith request for additional information within five (15) required by applicable Law, Business Days after receiving a written request (2email sufficient) expressly required by from the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) Company for such consent or (3v) as otherwise expressly disclosed set forth in Section 5.01(a) 7.1 of the Company Disclosure Letter)Schedule, the Company shallshall use reasonable best efforts to, and shall cause each of its Subsidiaries to, to use its reasonable best efforts to to, conduct the Retained Business its business in all material respects in the ordinary course of business and, to the extent consistent with past practicetherewith, shall use, and the Company shall, and shall cause each of its Subsidiaries toto use, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to (i) preserve the Retained Businessits and its Subsidiaries’ organization intact assets and business organizations intact, (ii) maintain the Retained Business’ existing relations in effect all of its material foreign, federal, state and goodwill local licenses, permits, consents, franchises, approvals and authorizations and (iii) maintain satisfactory relationships with Governmental Entitiesits material customers, customerslenders, suppliers, distributors, licensors, creditorslicensees, lessors, employees and business associates distributors and others having material business dealings relationships with it; provided, however, that no action or failure to take action with respect to matters specifically addressed by the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersprovisions of Section 7.1(b) and keep available the services shall constitute a breach under this sentence unless such action or failure to take action would constitute a breach of the Company and its Subsidiaries’ present employees and agentssuch provision of Section 7.1(b).
(b) Without limiting From the generality ofdate of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article IX, other than pursuant to any Interim Covenant Exception, except that Parent may withhold, delay or condition its consent to actions contemplated by Section 7.1(b)(vii) or Section 7.1(b)(viii) (in each case to the extent relating to actions of the Company only and not of the Company’s Subsidiaries) in furtherance of, the foregoingParent’s sole discretion, the Company covenants shall not, and agrees as to itself and shall cause its Subsidiaries not to:
(i) adopt (A) any change in the Company’s Organizational Documents (except for immaterial or ministerial amendments) or (B) material changes to the Organizational Documents of any Subsidiary of the Company that, in the case of this clause (B), would be adverse to Parent;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, except for any such plan solely between or among the Wholly Owned Subsidiaries of the Company;
(iii) acquire, directly or indirectly by merger, consolidation, acquisition of stock or assets or otherwise, any business, Person, material properties or material assets from any other Person (other than the Company or its Wholly Owned Subsidiaries) with purchase price in excess of $25 million in any individual transaction or series of related transactions or $100 million in the aggregate, in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company to consummate the transactions contemplated by this Agreement prior to the Outside Date, other than acquisitions of inventory or other goods or services in the ordinary course of business;
(iv) transfer, sell, lease, license, divest, cancel or otherwise dispose of, any material properties or material assets (excluding any Intellectual Property Rights) of the Company or any of its Subsidiaries, including capital stock of any of its Subsidiaries or incur, permit or suffer to exist the creation of any material Encumbrance (other than a Permitted Encumbrance) upon, any such material properties, assets or any material Owned IPR, except (A) services provided in the ordinary course of business, (B) sales of obsolete assets in the ordinary course of business, (C) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $25 million individually or $100 million in the aggregate (other than pursuant to the terms of Company Material Contracts in effect prior to the date of this Agreement) and (D) sales of inventory or other goods in the ordinary course of business;
(v) except as set forth in Section 7.1(b)(xix), issue, sell, dispose of, grant, transfer, lease, license, guarantee, Encumber (other than with Permitted Encumbrances), or otherwise enter into any Contract or other agreement with respect to the voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or capital stock or other equity interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock or other equity interests or such convertible or exchangeable securities, other than (A) any such transaction or action by a Wholly Owned Subsidiary of the Company to the Company or between or among Wholly Owned Subsidiaries of the Company, (B) the issuance of shares of such capital stock, other equity interests or convertible or exchangeable securities in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Company Benefit Plans in effect on the Capitalization Date or (C) the issuance of shares of such capital stock, other equity interests or convertible or exchangeable securities in respect of Company Equity Awards granted after the date hereof without violation of this Agreement;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its Wholly Owned Subsidiaries or between or among any of its Wholly Owned Subsidiaries) in excess of $15 million individually or $30 million in the aggregate, other than (x) pursuant to existing contractual obligations as of the date of this Agreement or (y) in connection with sale or rental financing arrangements in connection with the sale of Company Products in the ordinary course of business;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company, (B) regular quarterly dividends, in an amount not to exceed $0.24 per share in each case, declared and paid at such times as are consistent with the Company’s historical practice over the twelve (12)-month period prior to the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned C) pro rata dividends or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required distributions by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (a Subsidiary other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any a Wholly Owned Subsidiary of the Company that would not preventin the ordinary course of business;
(viii) reclassify, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)redeem, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or any other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), other than (1A) pursuant to satisfy applicable Tax withholding and/or exercise prices upon vesting, settlement or exercise of any Company Equity Award outstanding on the forfeiture ofdate hereof or granted after the date hereof without violation of this Agreement, or withholding (B) any such transactions solely involving Wholly Owned Subsidiaries of Taxes the Company;
(ix) (A) incur any Indebtedness for borrowed money (including the issuance of any debt securities), or assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other person, except for guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with respect tothis Section 7.1(b), except for incurrences of Indebtedness and guarantees under the Company Restricted Stock UnitsRevolving and Term Loan Credit Agreement not in excess of $2.2 billion in the aggregate, the Receivables Agreement not in excess of $110 million in the aggregate and the Master Framework Agreement not in excess of $90 million in the aggregate, (B) prepay, redeem, repurchase, defease, satisfy, discharge, cancel or otherwise terminate any Indebtedness for borrowed money of the Company Deferred Stock Units or any Company Performance Stock UnitsSubsidiary other than payments of Indebtedness under the Company Credit Agreements, except, in each case of clauses (A) and (B) for any such transactions solely between or among the Company and/or its Wholly Owned Subsidiaries, or (C) amend, supplement or otherwise modify the Company Credit Agreements or the Company Indentures in accordance with past practice and with any manner that would increase the terms amount of indebtedness available thereunder, increase the cost to Parent to prepay, terminate, redeem, satisfy or discharge the indebtedness thereunder at Closing or otherwise impede the ability of the Parent to effectuate any prepayment, payment, termination, redemption, satisfaction or discharge thereunder at Closing;
(x) make or authorize any payment of, or commitment for, capital expenditures, other than (A) as contemplated by the Company’s capital budget set forth in Section 7.1(b)(x) of the Company Stock Plans as Disclosure Schedule, (B) to the extent reasonably necessary to protect human health and safety and (C) any unbudgeted capital expenditures not to exceed $5 million individually or $10 million in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of aggregate per annum without taking into account any wholly owned Subsidiary of the Company amounts permitted by the Company or any other wholly owned Subsidiary of the Companyforegoing clause (B);
(iixi) merge or consolidate with enter into any other PersonContract that would have been a Company Material Contract had it been entered into prior to this Agreement, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent business;
(xii) other than with past practice that does not respect to Company Material Contracts related to Indebtedness, which shall be governed by Section 7.1(b)(vi), Section 7.1(b)(ix) and Section 7.14, terminate, materially increase the cost of such amend, materially modify, or waive any material rights under, any Company Plan or benefits provided under such Company Plan based on the cost on the date hereofMaterial Contract, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except than in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesbusiness;
(ivxiii) incur cancel, modify or waive any Indebtedness debts or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of claims held by the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiarieshaving in each case a value in excess of $1 million individually or $5 million in the aggregate, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings other than debts or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed claims held against customers in connection with a Sky Acquisition and refinancings the sale or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the rental of Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement Products in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) solely between or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and and/or its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Wholly Owned Subsidiaries;
(viiixiv) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights except as expressly provided for by Section 7.12, fail to use commercially reasonable efforts to maintain in effect any material Insurance Policy, unless simultaneous with any termination, cancellation or entering into customary film lapse of such material Insurance Policy, replacement self-insurance programs are established by the Company or television financing partnerships one or contractual arrangements for film more of its Subsidiaries or television financing shall be deemed not replacement policies underwritten by reputable insurance carriers are in full force and effect, in each case, providing coverage substantially similar to be an issuancethe coverage under the terminated, sale cancelled or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii)lapsed material Insurance Policies;
(ixxv) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming Transaction Litigation or video game productionany Tax claim, audit, assessment or dispute, which is subject to shall be governed exclusively by Section 5.01(b)(x7.19 and Section 7.1(b)(xvii), spend respectively, settle or commit to spend compromise any Proceeding for an amount in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 5 million individually or $200,000,000 25 million in the aggregate in during any calendar year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or which would reasonably be expected to, to (A) prevent, materially delay or materially impair the consummation of the Transactionstransactions contemplated by this Agreement or (B) involve any criminal liability or result in any non-monetary obligation that is material to the Company and its Subsidiaries (taken as a whole);
(xxvi) make any material changes with respect to any financial accounting policies or procedures, except as required by GAAP or SEC rule or policy;
(A) make (other than in the ordinary course of business), change or revoke any material Tax election, (B) change any annual Tax accounting period, (C) change any material Tax accounting method, (D) file any amended Tax Return that is material, (E) enter into any closing agreement with respect to Taxes, (F) settle any material Tax claim, audit, assessment or dispute for an amount that materially exceeds the amount reserved with respect thereto, or (G) surrender any right to claim a refund of a material amount of Taxes;
(xviii) (A) sell, assign, transfer, divest or otherwise dispose of, or grant any exclusive license, to any material Owned IPR, except in the ordinary course of business, or (B) cancel, abandon or otherwise allow to lapse or expire any material Registered Owned IPR (or any rights of the Company or its Subsidiaries therein or thereto), other than at the end of its term or otherwise in the Company’s reasonable business judgment;
(xix) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or established after the date of this Agreement not in contravention of this clause (xix), (A) materially increase the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, except for (1) increases in compensation in the ordinary course of business, subject to the limitations set forth in Section 7.1(b)(xix) of the Company Disclosure Schedule and (2) the payment of cash incentive compensation for completed periods based on actual performance in the ordinary course of business, (B) become a party to, establish, adopt, amend in any material respect, commence participation in or terminate any material Company Benefit Plan, (C) grant any new awards, or amend or modify in any material respect the terms of any outstanding awards, under any Company Benefit Plan, (D) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment of, compensation or benefits under any Company Benefit Plan, (E) hire any employee to a position at the level of Vice President or above (other than to replace a departed employee who was not on the Company’s executive leadership team) or (F) terminate the employment of any employee who is a member of the Company’s executive leadership team other than for cause;
(xx) other than capital expenditures made in accordance the ordinary course of business, become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with Section 5.01(b)(va labor union, labor organization, works council or similar organization; or
(xxi) agree, authorize or commit to do any of the foregoing.
(c) Nothing set forth in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time or give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time, the Company and other than purchases its Subsidiaries shall exercise, consistent with the terms and licenses conditions of film this Agreement, complete control and television supervision over their respective operations.
(d) Notwithstanding anything to the contrary in this Agreement, each of Parent and production programming the Company shall not, and shall cause its respective controlled Affiliates not to directly or indirectly (includinwhether by merger, consolidation, or otherwise), acquire, purchase, lease, or license or otherwise enter into a transaction with (or agree to acquire, purchase, lease, or license or otherwise enter
Appears in 2 contracts
Sources: Merger Agreement (Hill-Rom Holdings, Inc.), Merger Agreement (Baxter International Inc)
Interim Operations. 1
(a) The Company covenants and agrees as to itself and its Subsidiaries that, during the period from and after the execution date of this Agreement and prior through the earlier of the Closing or the termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law), (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a4.1(a) of the Company Disclosure Letter)Schedule, (3) as may be required by applicable Legal Requirements, or (4) as expressly required by this Agreement, the Company shall, and shall cause each of its the Company Subsidiaries to, use its commercially reasonable best efforts to conduct its business in the Retained Business ordinary course of business; provided that any action expressly permitted by the remaining provisions of this Section 4.1(a) (including Section 4.1(a) of the Company Disclosure Schedule) will not constitute a violation of the foregoing. During the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (A) to the extent Parent shall otherwise give its prior consent in writing (in the case of subsections (iv), (vi), (viii), (ix), (x), (xii), (xiii), and (xvii) of this Section 4.1(a), such consent not to be unreasonably withheld, conditioned or delayed), (B) as set forth in Section 4.1(a) of the Company Disclosure Schedule, (C) as may be required by applicable Legal Requirements, or (D) as expressly required by this Agreement, the Company shall not (and shall not permit any Company Subsidiary to):
(i) amend the Company’s Organizational Documents or amend the Organizational Documents of any Company Subsidiary;
(ii) split, combine, subdivide, change, exchange, amend the terms of or reclassify any shares of the Company’s capital stock or other equity interests of the Company or any Company Subsidiary;
(iii) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock or property) with respect to any shares of the Company’s capital stock or the capital stock or other equity interest of any Company Subsidiary, other than dividends or distributions only to the extent paid by any wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(iv) acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or assets, formation of a joint venture or otherwise) (A) any other Person, (B) any equity interest in any other Person (other than investments in equity securities that constitute short term investments that are accounted for as cash equivalents), (C) any business or division of another Person, or (D) any material assets except, (1) acquisitions by the Company from any wholly owned Company Subsidiary or among any wholly owned Company Subsidiaries; (2) the purchase of equipment, supplies and inventory in the ordinary course of business or (3) inbound licenses or other grants or assignments of Intellectual Property in the ordinary course of business;
1 Note to W&S: Subject to ongoing review by the Company.
(v) except in connection with any transaction between the Company and any wholly owned Company Subsidiary or among any wholly owned Company Subsidiaries, issue, sell, grant or otherwise permit to become outstanding any additional shares of, or securities convertible or exchangeable for, or options, warrants or rights to acquire, any shares of its capital stock or other equity interests, other than shares of Company Common Stock issuable upon exercise of outstanding Company Options;
(vi) except in connection with any transaction between the Company and any wholly owned Company Subsidiary or among any wholly owned Company Subsidiaries, sell, assign, transfer, lease or license to any third party, or incur any Lien on any of its material tangible property or tangible assets, except for Company Permitted Encumbrances, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), any material Company IP or material tangible assets of the Company, other than: (A) sales of inventory, goods or services in the ordinary course of business in a manner consistent with past practice or of obsolete equipment or assets in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each ; (B) pursuant to written Contracts or commitments existing as of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned Agreement; or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside as security for any borrowings permitted by Section 4.1(a)(viii); or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement licenses granted to customers or other third parties in the ordinary course of business in a manner consistent with respect to the voting of its capital stock, past practice;
(vii) directly or (E) purchase, indirectly repurchase, redeem or otherwise acquire any shares of its the Company’s or any Company Subsidiary’s capital stock or equity interests, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable into or exercisable for any shares of its the Company’s or any Company Subsidiary’s capital stock or equity interests, except: (other than (1A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the forfeiture ofexercise of repurchase rights existing prior to the date of this Agreement; or (B) shares of Company Common Stock accepted as payment for the exercise price of Company Options or for withholding Taxes incurred in connection with the exercise, vesting or withholding settlement of Taxes with respect toCompany Options, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Unitsas applicable, in each case in accordance with past practice and with the terms of the applicable award;
(viii) incur (other than draws on existing revolving loans), redeem, repurchase, prepay (other than prepayments of revolving loans), defease, or cancel any indebtedness for borrowed money, guarantee any such indebtedness, issue or sell any debt securities or rights to acquire any debt securities (directly, contingently or otherwise) or make any loans or capital contributions to any other Person, except for any indebtedness among the Company Stock and its wholly owned Company Subsidiaries or among any wholly owned Company Subsidiaries (and guarantees by the Company or the Company Subsidiaries in respect thereof);
(ix) (A) adopt, terminate or amend any Company Plan except to the extent permitted by clauses (B), (C), (D) or (E) of this Section 4.1(a)(ix), (B) increase, or accelerate the vesting or payment of, the compensation or benefits of any member of the Company Board, current employee, or former employee of the Company or any Company Subsidiary, (C) grant any rights to severance, retention, change in control or termination pay to any member of the Company Board, current employee or former employee of the Company or any Company Subsidiary, (D) hire or promote any employee at or to the level of Vice President or above, or (E) terminate the employment of any employee of the Company or any Company Subsidiary whose annual base salary exceeds $100,000 (other than for cause); except, in each case, for: (1) amendments to Company Plans as determined by the Company in good faith to be required to comply with applicable Legal Requirements; (2) hiring any Person for employment (including by means of internal promotion) to fill any currently existing Vice President or higher position that becomes vacant after the date of this Agreement, and, notwithstanding anything to the contrary in this Section 4.1(a)(ix), provide such Person with compensation and benefits for such position consistent with past practice; (3) hiring any Person for employment in accordance with the Company’s present hiring plan made available to Parent or otherwise hiring an individual below the level of Vice President in the ordinary course of business in a manner consistent with past practice; (4) increases in compensation or benefits required pursuant to any Company Plan in effect on the date hereof; (5) increases to total target cash opportunities (i.e., annual base salary or wage rates and target annual cash bonus opportunities) in amounts that are in the ordinary course of business in a manner consistent with past practice; and (6) any other actions set forth in Section 4.1(a)(ix) of the Company Disclosure Schedule;
(x) except in the ordinary course of business, (i)(A) amend or terminate (except for terminations pursuant to the expiration of the existing term of any Material Contract) any Material Contract or (B) waive, release or assign any material rights under any Material Contracts, or (ii) enter into any Contract or agreement that, if in effect on the date of this Agreement Agreement, would constitute a Material Contract;
(xi) change any of its methods of financial accounting or accounting practices in any material respect other than as modified after required by changes in GAAP;
(xii) make (except for elections made in the ordinary course of business), change or revoke any material Tax election, change any Tax accounting period or material method of Tax accounting, amend any material Tax Return if such amendment would reasonably be expected to result in a material Tax liability, settle or compromise any material liability for Taxes or any Tax audit, claim, or other proceeding relating to a material amount of Taxes, enter into any agreement with a Governmental Entity relating to Taxes if such agreement would reasonably be expected to result in a material Tax liability, request any Tax ruling from any Governmental Entity, surrender any right to claim a material refund of Taxes, or, other than in the ordinary course of business, agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes;
(xiii) other than consignment of Company Products in the ordinary course of business, make any capital expenditure that is not contemplated by the capital expenditure budget (the “CapEx Budget”) set forth in Section 4.1(a)(xiii) of the Company Disclosure Schedule (a “Non-Budgeted Capital Expenditure”), except that the Company or any Company Subsidiary may make any Non-Budgeted Capital Expenditure that, when added to all other Non-Budgeted Capital Expenditures made by the Company and the Company Subsidiaries since the date of this Agreement would not, in accordance with the terms aggregate, exceed the aggregate CapEx Budget by more than $100,000;
(xiv) except as expressly required by applicable Legal Requirements or the Company’s Organizational Documents, convene (A) any special meeting of this Agreement) the Company’s shareholders other than the Company Shareholder Meeting or (2B) purchasesany other meeting of the Company’s shareholders to consider a proposal that would reasonably be expected to impair, repurchasesprevent or delay the consummation of the transactions contemplated hereby;
(xv) enter into any agreement, redemptions understanding or arrangement with respect to the voting of any capital stock or other acquisitions of securities of any wholly owned Subsidiary equity interests of the Company by (including any voting trust), other than with respect to awards under the Company Equity Plans otherwise permitted under this Agreement or in connection with the granting of revocable proxies in connection with any meeting of the Company’s shareholders;
(xvi) adopt a plan of (A) complete or partial liquidation of the Company or any Company Subsidiary or (B) dissolution, merger, consolidation, division, restructuring, recapitalization or other reorganization, other than, in the case of clause (B), transactions between or among direct or indirect wholly owned Subsidiary of the Company)Company Subsidiaries;
(iixvii) merge settle or consolidate compromise any litigation, claim, suit, action or proceeding, except for settlements or compromises other than (A) the payment, discharge or satisfaction, in the ordinary course of business in a manner consistent with any other Personpast practice, of liabilities reflected or reserved against in the Most Recent Company Balance Sheet, or restructure, reorganize (B) those that do not (x) impose any injunctive relief on the Company or completely or partially liquidate any Company Subsidiary (other than transactions confidentiality obligations), (y) involve the payment of money greater than $100,000 in excess of existing insurance coverage, and (z) do not include an admission of liability or fault on the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary part of the Company or any Company Subsidiary;
(xviii) materially reduce the amount of insurance coverage or fail to renew or maintain any material existing insurance policies;
(xix) (A) amend any Company Permits in a manner that adversely impacts the Company’s ability to conduct its business in any material respect or (B) terminate or allow to lapse any material Company Permits;
(xx) (A) fail to pay any issuance, renewal, maintenance and other payments that become due with respect to any material Company Registered IP or otherwise abandon, cancel, or permit to lapse any material Company Registered IP, other than in its reasonable business judgment or in the ordinary course of business in a manner consistent with past practice, or (B) authorize the disclosure to any third party of any material Trade Secret included in the Company IP in a way that results in loss of trade secret protection, other than in the ordinary course of business in a manner consistent with past practice;
(xxi) take or cause to be taken any action, or knowingly fail to take or cause to be taken any action, which action or failure to act would reasonably be expected to (A) prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code or (B) result in any of the conditions to the Mergers set forth in ARTICLE V not being satisfied; or
(xxii) authorize, approve or enter into any agreement or make any commitment to take any of the actions described in clauses (i) through (xxi) of this Section 4.1(a).
(b) Parent agrees that, during the period from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except (1) to the extent the Company shall otherwise give its prior consent in writing (such Subsidiary is consent not to be withheld, conditioned or delayed), (2) as set forth in Section 4.1(b) of the surviving entity in connection with an acquisition not otherwise prohibited Parent Disclosure Schedule, (3) as may be required by applicable Legal Requirements, or (4) as expressly required by this Agreement, Parent shall, and shall cause the Parent Subsidiaries to, use commercially reasonable efforts to conduct its business in the ordinary course of business. Parent agrees that, during the period from the date of this Agreement and other than mergers amongthrough the earlier of the Closing or the termination of this Agreement, except (A) to the extent the Company shall otherwise give its prior consent in writing, (B) as set forth in Section 4.1(b) of the Parent Disclosure Schedule, (C) as may be required by applicable Legal Requirements, or the restructuring(D) as expressly permitted or required by this Agreement, reorganization Parent shall not (and shall not permit any Parent Subsidiary to):
(i) amend Parent’s or liquidation of, any wholly owned Subsidiaries either of the Company Acquisition Subs’ Organizational Documents or amend the Organizational Documents of any Parent Subsidiary in any manner that would not prevent, be adverse in any material respect to the holders of Company Common Stock (after giving effect to the Mergers) or materially delay or materially impair the Transactions)ability of Parent to consummate the Mergers;
(ii) split, combine, subdivide, change, exchange, amend the terms of or reclassify any shares of Parent’s capital stock or other equity interests of the Company, except for any such transaction involving only wholly owned Parent Subsidiaries;
(iii) except as expressly required by declare, set aside, make or pay any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee dividend or other service provider of the Company distribution (whether payable in cash, stock or any of its Subsidiaries, (Cproperty) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made shares of Parent’s capital stock or the basis on which such contributions are determined capital stock or (G) forgive other equity interest of any loans Parent Subsidiary, other than dividends or distributions only to directors, officers the extent paid by any wholly owned Parent Subsidiary to Parent or employees of the Company or any of its Subsidiariesanother wholly owned Parent Subsidiary;
(iv) incur any Indebtedness acquire (by merger, consolidation, operation of law, acquisition of stock, other equity interests or issue any warrants assets, formation of a joint venture or other rights to acquire any Indebtedness, except otherwise) (A) any other Person, (B) any equity interest in the ordinary course any other Person (other than investments in equity securities that constitute short term investments that are accounted for as cash equivalents), (C) any business or division of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at another Person, or (D) any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial assets material to the Company and its the Company Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednesscase, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security acquisitions by Parent from any wholly owned Parent Subsidiary or performance bonds or similar credit support instruments and among any wholly owned Parent Subsidiaries; (2) overdraft facilities or cash management programsthe purchase of equipment, in each case issued, made or entered into supplies and inventory in the ordinary course of business consistent with past practice, business; (E3) commercial paper issued inbound licenses or other grants or assignments of Intellectual Property in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 2 contracts
Sources: Merger Agreement (Superior Drilling Products, Inc.), Merger Agreement (Drilling Tools International Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time and except (unless A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent shall otherwise approve may consent to in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned delayed or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Planconditioned) or (3D) otherwise expressly disclosed as set forth in Section 5.01(a6.1(a) of the Company Disclosure Letter)Schedule, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business protect and preserve in the ordinary course of business consistent with past practice, all material respects its assets and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact its business organizations and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, licensees, development collaboration or similar commercialization partners, manufacturers, suppliers, distributors, licensors, creditors, lessors, employees and other business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as required by applicable Laws, (C) as Parent may consent to the First Effective Time in writing (unless Parent shall otherwise approve in writing, which approval shall such consent not to be unreasonably withheld, conditioned delayed or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distributionconditioned) or (3D) otherwise expressly disclosed as set forth in Section 5.01(b6.1(a) of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws by-laws or other applicable governing instruments;
(ii) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of, individually or in the aggregate, $2,500,000, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than amendments to the governing documents issuance of any shares by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger another wholly owned Subsidiary or the other Transactions)issuance of Shares pursuant to Company Options, (BCompany Restricted Shares or the Convertible Senior Notes outstanding as of the date of this Agreement) split, combine, subdivide or reclassify its outstanding securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(except for v) create or incur any such transaction by a wholly owned subsidiary Lien material to the Company or any of its Subsidiaries on any assets of the Company which remains a or any of its Subsidiaries;
(vi) other than pursuant to the terms of Contracts in effect as of the date of this Agreement and provided to Parent prior to the date of this Agreement, make any loans, advances, guarantees or capital contributions to or investments in any Person (other than investments in cash and cash equivalents and other investments that would constitute short-term investments on the balance sheet of the Company and other than in the Company or any direct or indirect wholly owned Subsidiary after consummation of such transactionthe Company), ;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1A) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of to the Company or to another any other direct or indirect wholly owned Subsidiary of the Company or regular quarterly dividends not to exceed $0.10 per Share, declared and paid consistent with prior timing, and (B) any cash dividends paid to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) one of its wholly-owned Subsidiaries by a wholly-owned Subsidiary of the Company Disclosure Letter), (DCompany) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock, except from (other than (1A) pursuant holders of Company Options in full or partial payment of the exercise thereof and/or any applicable Taxes payable by such holder upon exercise of the Company Options or Company SARs or the lapse of restriction on Company Restricted Shares to the forfeiture of, extent required or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with permitted under the terms of the Company applicable Stock Plans as in effect on and award agreements or (B) former employees, directors or consultants following termination of their relationship with the date of this Agreement (or as modified after the date of this Agreement Company in accordance with applicable agreements providing for the terms repurchase of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)shares upon such termination;
(iiix) merge incur any indebtedness for borrowed money or consolidate with any other guarantee such indebtedness of another Person, or restructure, reorganize issue or completely sell any debt securities or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except for inter-company borrowings solely among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries in the ordinary course consistent with past practice;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Schedule and consistent therewith, make or authorize any capital expenditure;
(xi) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts, rights or claims thereunder; for purposes of this Section 6.1, the monetary reference in clause (A) of the definition of Material Contract shall be changed to $5,000,000; the monetary reference in clause (B) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (C) of the definition of Material Contract shall be changed to $2,500,000; the monetary reference in clause (D) of the definition of Material Contract shall be changed to $2,500,000; and the monetary reference in the definition of Personal Property Leases shall be changed to $2,500,000;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or applicable GAAP or statutory or regulatory accounting rules or interpretations with respect thereto;
(A) settle any litigation or other proceedings before a Governmental Entity except where the settlement is limited solely to (I) the release of claims and (II) the monetary payment by the Company or any Subsidiary does not exceed $2,000,000 (or $15,000,000 in the aggregate for all such settlements) or (B) commence, join, make an appeal with respect to a lawsuit, action, claim or similar proceeding other than (I) for the routine collection of bills, (II) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business, provided, that the Company consults with Parent prior to the filing or taking of any action with respect to such lawsuit, action, claim or similar proceeding, or (III) pursuant to this Agreement;
(xiv) file or amend any material Tax Return except in the ordinary course of business, settle or compromise any material Tax liability, make, change or revoke any material Tax election except to the extent consistent with past practice or as required by law, change any material method of Tax accounting, except as required by law, or take any action which would materially adversely affect the Tax position of the Company or of any of its Subsidiaries;
(xv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except sales of Company Products in the ordinary course of business consistent with past practice with respect and sales of obsolete assets, other than pursuant to Contracts in effect prior to the date of this Agreement;
(1xvi) employees below other than in the level ordinary course of Executive Vice President business, (A) transfer, sell, license, mortgage, pledge, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Intellectual Property Rights, (B) grant, extend, amend or abandon (except as required in the diligent prosecution of Owned Intellectual Property), waive or modify any material rights in or to Owned Intellectual Property, (C) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (2D) employees at fail to exercise a right of removal or above extension under any material Owned Intellectual Property;
(xvii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the level date hereof pursuant to Contracts or Benefit Plans which are listed on Section 6.1(a)(xvii) of Executive Vice President the Company Disclosure Schedule, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, other than routine amendments to qualified retirement plans or health and welfare plans (other than severance plans) that do not increase benefits or result in respect of increases of less than 7.5% of compensation relative to their materially increased administrative costs, (B) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company or its Subsidiaries, (C) pay any bonus or pension, welfare or other benefits prior to such changeincentive compensation under any Benefit Plan in excess of the amount earned based on actual performance, (D) increase accelerate the severance vesting of or termination payments or benefits payable lapsing of restrictions with respect to any director, officer, employee equity-based compensation or other service provider of the Company or long-term incentive compensation under any of its SubsidiariesBenefit Plan, (E) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (F) pay any severance in excess of what is legally required under the terms of any Benefit Plan or applicable Law, (G) take any action to accelerate fund or secure the vesting or payment of compensation or benefits any amounts under any Company Plan (including any equity-based awards)Benefit Plan, (FH) change any actuarial or other assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP, (I) hire any executive officer or any employee or consultant with respect to any Company Plan or to change the manner maximum annual cash compensation opportunities in which contributions to excess of $200,000, provided, that such plans new hire’s compensation and benefits are made in the ordinary course consistent with past practice and are consistent with the other requirements set forth in this Agreement, (J) enter into any collective bargaining agreement or the basis on which such contributions are determined other agreement with a labor union, works council or similar organization or (GK) forgive terminate without cause the employment of any loans officer of the Company;
(xviii) subject to Section 6.2, take any action or omit to take any action that is reasonably likely to prevent, interfere with or delay the consummation of the Merger or result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any formal written communications or group oral presentations to the directors, officers or employees of the Company or any of its Subsidiaries;Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication (which comments shall not be unreasonably withheld or delayed), and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(ivc) incur any Indebtedness or issue any warrants or other rights Subject to acquire any IndebtednessSection 6.5, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) Parent shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company take or permit any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiariestake any action that is reasonably likely to prevent, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent interfere with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made Merger or result in accordance with Section 5.01(b)(v) and other than purchases and licenses any of film and television and production programming (includinthe conditions to the Merger set forth in Article VII not being satisfied.
Appears in 2 contracts
Sources: Merger Agreement (Medicis Pharmaceutical Corp), Merger Agreement (Valeant Pharmaceuticals International, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental EntitiesAuthorities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless Parent shall A) as otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents this Agreement, (including B) as Parent may approve in connection with the Separation and the Distributionwriting (such approval not to be unreasonably withheld or delayed) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) adopt or propose any change in its Certificate of Formation or By-Laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with respect a value or purchase price in the aggregate in excess of $250,000 in any transaction or series of related transactions, other than acquisitions pursuant to SpinCo and Company Contracts in effect as of the SpinCo date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than in the case issuance of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any shares by a wholly-owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly-owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien material to the Company or any of its Subsidiaries not incurred in the ordinary course of business consistent with past practice, except for any Permitted Liens;
(vi) (A) make any loan or loan commitment to any Person which would, when aggregated with all outstanding loans or loan commitments or any renewals or extensions thereof made to such Person and any Affiliate or immediate family member of such Person, exceed $500,000 or (B) splitpurchase or sell any loan or loan participation, combineindividually or in bulk, subdivide in one or reclassify its outstanding shares a series of capital stock related transactions in excess of $500,000 in the aggregate, in each case, without first informing the deputy chief credit officer of Hanmi Bank two (except for 2) full Business Days prior to taking such action and considering in good faith his views and receiving the approval of United Central Bank’s Chief Executive Officer, at a minimum, and any such transaction committee as required by a wholly owned subsidiary of United Central Bank’s current loan authority policy and administration. Neither the Company which remains a wholly owned Subsidiary after consummation nor any of such transaction)its Affiliates shall forgive any loans to directors, officers or employees;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (otherwise, with respect to or declare or make any combination thereof) in respect of distribution on, any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly wholly-owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company any other direct or (2indirect wholly-owned Subsidiary) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock;
(viii) except to make changes that are required by applicable Law or to satisfy contractual obligations existing as of the date hereof which are listed on Section 6.1(a)(viii) of the Company Disclosure Letter, (A) terminate, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plans, other than routine amendments to health and welfare plans (other than severance plans) that do not increase benefits or result in materially increased administrative costs, (B) grant any salary or wage increase, other than annual increases in salary and wages for employees who are not officers by no more than 5% in the aggregate in the ordinary course of business consistent with past practice, (C) pay any bonus or incentive compensation in excess of the amount earned based on actual performance, (D) grant any new award, amend the terms of outstanding awards or change the compensation opportunity under any Benefit Plan, (E) purchaseset any bonus metrics or targets, repurchase(F) pay any severance in excess of payments by the Company or its Subsidiaries made in the ordinary course of business consistent with past practice, redeem (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, other than as required by GAAP (I) hire any employee or consultant with annualized cash compensation opportunities in excess of $150,000, other than to fill vacancies of persons who are not officers or (J) terminate any officer or other person with an annual compensation opportunity in excess of $150,000 other than for “cause”;
(ix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock;
(x) incur any indebtedness for borrowed money or assume, guarantee, endorse or otherwise as an accommodation become responsible for the long-term indebtedness of any other Person (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan deposits and similar liabilities in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider indebtedness of the Company’s Subsidiaries to the Company or any of its Subsidiaries, and (C) increase short term advances from the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except Federal Home Loan Bank in the ordinary course of business consistent with past practice practice);
(xi) except as set forth in the capital budgets set forth in Section 6.1(a)(xi) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $250,000 in the aggregate during any twelve (12) month period;
(xii) enter into any contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xiii) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(1xiv) employees below enter into any settlement, compromise or similar agreement with respect to, any action, suit, proceeding, order or investigation before a Governmental Authority, individually or with respect to multiple actions, suits, proceedings, orders or investigations arising generally out of the level same set of Executive Vice President facts or circumstances, for an amount greater than $250,000 in excess of applicable and (2) employees at confirmed insurance coverage or above specific loss reserves reflected on the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationCompany Interim Financial Statements, bonus or pension, welfare any obligation or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider liability of the Company in excess of such amount, or would impose any material restriction on the business of Parent or the Surviving Corporation or create adverse precedent for claims that are reasonably likely to be material to Parent, the Company or the Surviving Corporation;
(xv) amend, modify or terminate any Material Contract, or cancel, modify or waive any material debts or claims held by it or waive any rights having in each case a value in excess of $500,000 other than any loan restructures or workouts in the ordinary course of business and following prior consultation with the deputy chief credit officer of Hanmi Bank;
(xvi) sell, transfer, lease, license, guarantee, mortgage, pledge, encumber or otherwise create any Lien on, dispose of or discontinue any of its assets, deposits, business or properties (other than sales of loans and loan participations pursuant to Section 6.1(a)(vi)) except in the ordinary and usual course of business consistent with past practice and in a transaction that, together with all other such transactions, is not material to the Company and its Subsidiaries, taken as a whole;
(xvii) except as required by applicable Law or the Federal Reserve Board, the FDIC, the CDBO or the TDB, (A) implement or adopt any material change in its interest rate and other risk management policies, procedures or practices, (B) fail to follow in all material respects, the Company’s or its applicable Subsidiary’s existing policies or practices with respect to managing its exposure to interest rate and other risk or (C) fail to use commercially reasonable efforts to avoid any material increase in the Company’s aggregate exposure to interest rate risk;
(xviii) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(xix) (A) other than in accordance with the Company’s or any of its Subsidiaries’ investment policies in effect on the date hereof or in securities transactions as provided in (B) below, make any investment either by contributions to capital, property transfers or purchase of any property or assets of any Person or (EB) take other than purchases of direct obligations of the United States of America or obligations of United States government agencies which are entitled to the full faith and credit of the United States of America, in any action to accelerate case with a remaining maturity at the vesting time of purchase of one year or payment less, purchase or acquire securities of compensation or benefits under any type; provided, however, that the Company Plan shall notify Parent of the purchase of any investment security in writing within one (including any equity-based awards1) Business Day after such purchase, and such notice shall describe in detail the investment securities purchased and the price thereof), and provided, further, that the Company shall consult with Parent from time to time regarding the Company’s investment securities policies and consider in good faith the views of Parent with respect thereto.
(Fxx) change (A) commence or settle any actuarial litigation or other assumptions used to calculate funding obligations proceeding with respect to any liability for material Taxes, take any action which is reasonably likely to have an adverse impact on the Tax position of the Company Plan or or, after the Merger, which is reasonably likely to change have an adverse impact on the manner in which contributions to such plans are made Tax position of Parent or the basis on which such contributions are determined Surviving Corporation, (B) except in the ordinary and usual course of business consistent with past practice, make or change any material express or deemed Tax election, file any amended Tax Return or change any of its methods of reporting income or deductions for Tax purposes or (GC) forgive take any loans other action with respect to Taxes that is outside the ordinary and usual course of business or inconsistent with past practice;
(xxi) make application for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production office or other significant office or operations facility of it or any of its Subsidiaries;
(xxii) enter into any new line of business or, other than in the ordinary course of business consistent with past practice, change in any material respect its lending, investment, underwriting, risk and asset liability management and other banking and operating, securitization and servicing policies, as applicable (including any change in the maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof), except as required by applicable Law or policies imposed by any Governmental Authority; or
(xxiii) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any written or oral communications to the directors, officers or employees of the Company or any of its Subsidiaries;Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(ivc) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) Parent shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company knowingly take or permit any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have take any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which action that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect reasonably likely to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair prevent the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinMerger.
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Hanmi Financial Corp), Merger Agreement (Hanmi Financial Corp)
Interim Operations. (a) The Each of the Company and Parent covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent or the Company, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) otherwise expressly contemplated by this Agreement, as provided in any Contract in effect as of the date of this Agreement, or as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in the ordinary course of business consistent with past practiceOrdinary Course and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) associates. Without limiting the generality of, of and in furtherance of, of the foregoing, from the Company covenants and agrees date of this Agreement until the Effective Time, except as to itself and its Subsidiaries thatotherwise expressly: (i) contemplated by this Agreement; (ii) contemplated by any Contract entered into prior to, from and concurrently with or after the date of this Agreement and prior by Parent with respect to the First Effective Time Other Parent Transactions (unless Parent shall as such Contract may be amended, supplemented or otherwise approve modified from time to time); (iii) required by applicable Law or the terms of any Contract in writingeffect on the date of this Agreement, (iv) as approved in writing (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) other Party; or (3v) otherwise expressly disclosed set forth in the corresponding subsection of Section 5.01(b) 7.1 of the Company Disclosure Letter), as it relates to the Company and its Subsidiaries, or on Section 7.1 of the Parent Disclosure Letter, as it relates to Parent and its Subsidiaries, each Party, on its own account, shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments make any material change to the governing documents nature of its business and operations;
(ii) make any Subsidiary change to its Organizational Documents as in effect on the date of this Agreement in any manner that would reasonably be expected to prohibit, prevent or materially impede, hinder or delay the ability of such Party to satisfy any of the Company that would not preventconditions to, delay or impair the Initial consummation of, the Merger or the other Transactions;
(iii) (A) merge or consolidate itself or any of its Subsidiaries with any other Person (expressly excluding, for the avoidance of doubt, any of the Other Parent Transactions), or (B) splitadopt a plan or agreement of complete or partial liquidation, combinedissolution, subdivide restructuring, recapitalization or reclassify its outstanding shares of capital stock (other reorganization, in each case, except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends such transactions solely between or distributions paid by a direct among, or indirect solely involving, such Party and one or more of its wholly owned Subsidiaries, or a Subsidiary of the Company to another direct such Party and one or indirect more wholly owned Subsidiary Subsidiaries of the Company or to the Company or such Subsidiary, (2) normal semiannual cash dividends on as would not reasonably be expected to result in a Company Material Adverse Effect or Parent Material Adverse Effect, as applicable, or (3) as would not reasonably be expected to prohibit, prevent or materially impede, hinder or delay the Common Stock as described in Section 5.01(b)(i) ability of such Party to satisfy any of the conditions to, or the consummation of, the Merger or the other Transactions;
(iv) except as required by the Company Disclosure Letter)Agreement, (D) issue, sell, grant, transfer or authorize the issuance, sale or grant, or otherwise enter into any agreement Contract with respect to the voting of, any of its capital stockpartnership interests, or (E) purchaselimited liability company interests, repurchase, redeem or otherwise acquire any shares of its capital stock or any equity interests, as applicable (other than the issuance of partnership interests, limited liability company interests, shares of capital stock or equity interests (A) by its wholly owned Subsidiary to it or another of its wholly owned Subsidiaries or (B) in respect of equity-based awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement), or securities convertible or exchangeable into or exercisable for any partnership interests, limited liability company interests, shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable forequity interests, as applicable, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any kind to acquire any partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, or such convertible or exchangeable securities;
(v) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, or securities convertible or exchangeable into or exercisable forfor any partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable;
(vi) waive, release, assign, settle or compromise any claim, action or proceeding, including any state or federal regulatory proceeding seeking damages or injunction or other equitable relief, which waiver, release, assignment, settlement or compromise would reasonably be expected to result in a Company Material Adverse Effect or Parent Material Adverse Effect, as applicable;
(vii) other than in the Ordinary Course, make, change or revoke any material Tax election, adopt or change any material Tax accounting method, file any material amended Tax Return, settle any material Tax claim, audit, assessment or dispute for an amount materially in excess of the amount reserved or accrued on such Party’s most recent consolidated balance sheet included in the Parent Reports or Company Reports, as applicable, or surrender any optionsright to claim a refund of a material amount of Taxes;
(viii) make any material changes with respect to accounting policies, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii)except as required by changes in GAAP;
(ix) with respect make or declare any dividends or distributions to the Retained Businessholders of Common Units or Parent Common Stock, in each case, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition)Ordinary Course; provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;or
(x) other than capital expenditures made agree, authorize or commit to do any of the foregoing.
(b) Notwithstanding anything to the contrary in accordance this Agreement, a Party’s obligations under Section 7.1(a) to take an action or not to take an action, or to cause its Subsidiaries to take an action or not to take an action, shall, with Section 5.01(b)(vrespect to any Persons (and their respective Subsidiaries) controlled by such Party, or in which such Party otherwise has a voting interest, but that are not wholly owned Subsidiaries of such Party or have public equity holders, only apply (i) to the extent permitted by the organizational documents and other than purchases governance arrangements of such entity and licenses its subsidiaries, (ii) to the extent a Party is authorized and empowered to bind such entity and its subsidiaries and (iii) to the extent permitted by the Party’s or its Subsidiaries’ duties (fiduciary or otherwise) to such entity and its subsidiaries or any of film and television and production programming (includinits equity holders.
Appears in 2 contracts
Sources: Merger Agreement (Enbridge Energy Management L L C), Merger Agreement (Enbridge Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after From the execution date of this Agreement and prior through the earlier of the Closing or the termination of this Agreement, except as otherwise expressly contemplated by this Agreement (including, for the avoidance of doubt, Exhibit A), required by applicable Law, disclosed in Section 5.4 of the Seller Disclosure Schedule or with respect to the First Effective Time Retained Plants, Retained Plant Assets, Retained Plant Liabilities, Put Assets and Put Liabilities, and except for commercially reasonable actions taken in response to a business emergency or other unforeseen operational matters (unless Parent but limited to necessary repairs due to breakdown or casualty and in the reasonable judgment of Seller for no longer than is required by any such emergency or unforeseen matter and with prompt notice thereafter to IPH with respect to such actions taken, and in no event later than 48 hours after the taking of such actions), Seller shall cause AER and each of its Subsidiaries to (1) conduct their respective businesses only in the ordinary course of business consistent with past practice and (2) use reasonable best efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers, suppliers, Governmental Entities and others having business relationships with them. Without limiting the generality of the foregoing, from the date of this Agreement through the earlier of the Closing or the termination of this Agreement, except as otherwise approve expressly contemplated by this Agreement (including, for the avoidance of doubt, Exhibit A), required by applicable Law, disclosed in writingSection 5.4 of the Seller Disclosure Schedule or with respect to the Retained Plants, Retained Plant Assets, Retained Plant Liabilities, Put Assets and Put Liabilities, without IPH’s prior written consent (which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shallSeller shall not in respect of AER and each of its Subsidiaries, and shall cause AER and each of its Subsidiaries not to:
(i) (A) amend or propose to amend their respective certificates of incorporation or by-laws or equivalent organizational documents, use (B) split, combine or reclassify their outstanding membership interests or capital stock or (C) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Transferred Company or its reasonable best efforts Subsidiaries;
(ii) issue, sell, transfer, pledge, encumber or dispose of, or agree to conduct issue, sell, transfer, pledge, encumber or dispose of, any membership interests or shares of capital stock or any other class of debt or equity securities of the Retained Business Transferred Company or its Subsidiaries (it being understood that Seller makes no such covenant with respect to any shares of EEI not owned directly or indirectly by the Transferred Company), or any options, warrants or rights of any kind to acquire any membership interests or shares of capital stock or any other class of debt or equity securities of the Transferred Company or its Subsidiaries (it being understood that Seller makes no such covenant with respect to any shares of EEI not owned directly or indirectly by the Transferred Company);
(iii) (A) except for Intercompany Accounts to be cancelled or otherwise settled as of the Closing pursuant to Section 5.7, incur, assume, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any Debt, (B) merge or consolidate with any Person or make any material acquisition of any assets, businesses, stock or other properties in excess of $375,000, other than acquisitions of (1) inventory, materials or supplies in the ordinary course of business consistent with past practicepractice or (2) already contracted by Seller, and the Transferred Company shall, and shall cause each or any of its Subsidiaries to, solely prior to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time Agreement, (unless Parent shall otherwise approve in writingC) sell, which approval shall not be unreasonably withheldlease, conditioned transfer, pledge, dispose of or delayedencumber any assets, and which determination shall take into account the Company Overview Presentationrights, and except as securities or businesses, other than sales or dispositions of (1) required by applicable Lawelectricity, obsolete, damaged or broken equipment or other commodities or Derivative Products, in each case, in the ordinary course of business consistent with past practice and subject to the terms of Section 5.4(a)(xiii), (2) expressly required already contracted by Seller, the Transaction Documents (including in connection with Transferred Company or any of its Subsidiaries prior to the Separation and the Distribution) date of this Agreement, or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall items or materials not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than exceeding $375,000 in the case of clause (A))aggregate, (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement binding Contract with respect to the voting foregoing;
(iv) (A) accelerate the receipt of its capital stockamounts due with respect to any receivables, (B) lengthen the period for payment of accounts payable, or (EC) purchasefail to make any payment as it comes due, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes except in connection with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Unitsa good faith dispute and, in each case of clauses (A), (B) and (C), other than in accordance the ordinary course of business consistent with past practice to maintain customary levels of working capital for the operation of the business of the Transferred Company and with its Subsidiaries;
(v) other than as required by the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Benefit Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing collective bargaining agreement or extending a broadly applicable material Company Plan pursuant to actions in the ordinary course of business consistent with past practice that does apply uniformly to, respectively, Transferred Company Employees and similarly situated other employees of Seller and its Affiliates (without regard to EEI Employees) or EEI Employees and similarly situated other employees of Seller and its Affiliates, not (A) enter into, amend or extend any collective bargaining or other labor agreements (B) enter into or amend any employment, severance or special pay agreement with any Transferred Company Employee or EEI Employee, provided that Seller or its Affiliates may enter into retention agreements (which may include customary severance provisions) for which Seller is solely liable, (C) increase the annual base salary of any Transferred Company Employee or EEI Employee or (D) adopt, enter into, or amend any Transferred Company Benefit Plan or, except as would not materially increase costs to IPH, adopt, enter into or amend, any Seller Benefit Plan in respect of Transferred Company Employees or EEI Employees;
(vi) other than in the cost ordinary course of such business, cause the Transferred Company Plan or benefits provided its Subsidiaries to hire any individual or permit the Transferred Company or its Subsidiaries to terminate the employment of any individual other than for cause;
(vii) modify in any material respect the Commodity Risk Policy, the Company Trading Guidelines or any similar policy, other than modifications that are more restrictive to the Transferred Company and its Subsidiaries;
(viii) effect or permit a “plant closing,” “mass layoff” or similar event under such Company Plan based on the cost on Worker Adjustment and Retraining Notification Act or any corresponding state or local Laws (collectively, the date hereof“WARN Act”) without (A) the consent of IPH and (B) complying with all provisions of the WARN Act;
(ix) make any change in methods, principles or practices of financial accounting in effect, except insofar as may be required by a change in GAAP or Law;
(x) (A) make or change any material Tax election, (B) grant change an annual accounting period or provide adopt or change any transaction material accounting method with respect to Taxes, (C) amend any Tax Return, (D) enter into any closing agreement, settle or retention bonuses compromise any proceeding with respect to any director, officer, employee material Tax claim or other service provider of assessment relating to the Transferred Company or any of its Subsidiaries, (CE) increase the compensationsurrender any right to claim a refund of a material amount of Taxes, bonus or pension, welfare (F) consent to any extension or other benefits of any director, officer or employee waiver of the limitation period applicable to any material Tax claim or assessment relating to the Transferred Company or any of its Subsidiaries, except in each case, to the extent such action could reasonably be expected to result in a material increase in the Tax Liabilities of IPH or any of its Affiliates after the Closing;
(xi) waive, release, settle or compromise any pending or threatened Action, other than waivers, releases, settlements or compromises of any Action in the ordinary course of business consistent with past practice where the amount paid in such does not exceed $150,000 individually or $1,000,000 in the aggregate and where such waiver, release, settlement or compromise (A) does not impose future restrictions or requirements on the Business or the Transferred Company and its Subsidiaries or any of their respective assets or properties and (B) are paid or otherwise irrevocably satisfied in full prior to Closing (it being understood that this clause (xi) shall not apply with respect to Tax matters, which shall be governed by clause (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awardsx), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries);
(ivxii) incur any Indebtedness or issue any warrants or other rights fail to acquire any Indebtedness, except (A) maintain in the ordinary course of business consistent with past practice full force and effect insurance coverage in a principal form and amount not to exceed $400,000,000 equivalent in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial all material respects to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except insurance coverage currently maintained with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Transferred Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, Subsidiaries and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, their assets and properties;
(C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (Dxiii) (1A) to the extent not drawn upon and payments are not triggered therebyenter into, letters of creditassume, bank guaranteesamend, security modify, terminate (partially or performance bonds or similar credit support instruments and completely) (2i) overdraft facilities or cash management programs, in each case issued, made or any Material Contract (including any Contract that would have been a Material Contract had it been entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement) that would be reasonably expected to involve the payment or receipt by AER or one of its Subsidiaries in excess of $1,000,000 for each individual Contract or series of related Contracts (including, for the avoidance of doubt, the Put Option Agreement in and the ordinary course of business consistent with past practice or in connection Put Option Asset Purchase Agreement), (ii) Material Contracts with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities term in connection with Indebtedness excess of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, one year and (Liii) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, any other Material Contract other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in (B) enter into, assume, amend, modify, terminate (partially or completely) (except as such termination is required pursuant to Section 5.8) or waive, or amend rights or obligations under, any Affiliate Contracts or Subsidiary Contracts or any other Contract the aggregate not in excess existence of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in which would have been required to be disclosed on Section 5.01(b)(v3.17(a) of the Company Seller Disclosure LetterSchedule; provided, further, with respect to both (A) and (B) above, Seller shall not take or forego taking, or permit any of its Affiliates to take or forego taking, any action the effect of which could cause or result in (immediately or with the passage of time) the occurrence of any of the restricted actions specified in (A) or (B) above;
(vixiv) unless necessary to maintain the specified Minimum Coal Inventory, and notwithstanding clause (xiii) above, enter into any contract for the purchase of coal with a term of greater than 12 months, or amend or modify any existing contract for the purchase of coal to extend the term of such contract for more than 12 months; and
(xv) agree or commit to do or engage in any of the foregoing. For the avoidance of doubt, the parties acknowledge that any hedging activities, including, without limitation, forward-hedging programs and the use of derivative financial instruments such as forward contracts, futures contracts, options contracts and financial swap contracts, by the Transferred Company and its Subsidiaries in accordance with management programs and policies and/or for reducing Seller’s financial obligations with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose Post-Closing Credit Support to the extent permitted by Section 5.9(c) of any material Intellectual Property; provided that this clause (vi) Agreement shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not be considered activities “in the ordinary course or $75,000,000 individually in of business”; provided that any event such programs and policies (other than transactions among including the Commodity Risk Policy and the Company and its wholly owned Retained Subsidiaries), (DTrading Guidelines) licenses, sales, letting lapse, abandonment and cancellations shall have been in effect as of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement and shall have been made available to IPH.
(b) Notwithstanding the above provisions of this Section 5.4, prior to Closing, Seller may, and may cause its Affiliates to, remove all Cash from the Transferred Company or any of its Subsidiaries to Seller or its Subsidiaries, in such manner as Seller shall determine (provided that it does not violate any existing contractual obligations, including the Indenture); provided that (i) Seller may not permit the distribution or dividend of any assets (other than Cash in accordance with this Section 5.4(b)) or properties of the existing terms Transferred Company and its Subsidiaries to any of the Transferred Company’s equity holders, (ii) Seller may not remove from the Transferred Company or any of its Subsidiaries any Insurance Proceeds and must leave at the Transferred Company and its Subsidiaries an amount in Cash equal to, and must maintain in segregated accounts for the benefit of the Transferred Company or its applicable Subsidiary, all such awards Insurance Proceeds, (iii) in addition to any aggregate Cash amount to be transferred to Genco pursuant to Section 5.7, Seller shall cause to be retained at Closing at Genco an aggregate amount of Cash equal to the sum of (w) $70,000,000, (x) the Put Option Down Payment ($100,000,000), (y) the Put Option Additional Purchase Price (in an amount equal to at least $33,000,000) and (z) the Company Stock Plansamount, if any, by which the Alternative Gas Plant Transaction Consideration exceeds the sum of (A) the Put Option Down Payment and (B) Investment Preferred Stock the Put Option Additional Purchase Price (as defined subject to the proviso in the Bridge Facilityfirst sentence of Section 5.24(d)) (such sum, the “Genco Retained Cash”), (iv) Seller shall cause to be retained at Closing at AERG an aggregate amount in Cash equal to $7,689,000 (or the gross proceeds of the sales described in item (Ci) by wholly owned Subsidiaries on Section 3.7(a) of the Seller Disclosure Schedule to the Company extent completed at Closing) (the “AERG Retained Cash”) and (v) Seller shall cause to be retained at Closing at AEM an aggregate amount of Cash equal to $15,000,000 (the “AEM Retained Cash”). Notwithstanding anything to the contrary herein or elsewhere, but subject to any other wholly owned Subsidiary of the Company; provided thatSection 5.9(a), for the avoidance of doubt, granting customary profit participation rights Seller shall have the right to any Cash or entering into customary film or television financing partnerships or contractual arrangements for film or television financing instrument posted as collateral, which right shall be deemed not to be an issuanceconsidered in the Marketing Company Note.
(c) Except as otherwise expressly contemplated by this Agreement or required by applicable Law, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes during the period from the date of this Section 5.01(b)(viii);
(ix) Agreement to the Closing Date, IPH shall not, and, with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(vclauses (ii) and other than with respect to film and television production and programming or video game production(iii) shall cause its Affiliates not to, which is subject to Section 5.01(b)(xwithout the prior written consent of Seller, (i), spend or commit to spend in excess except as set forth on Section 5.4(c) of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any yearIPH Disclosure Schedule, in each case to acquire any businessamend, whether by merger, consolidation, purchase of property or assets, licenses repeal or otherwise modify its certificate of incorporation, bylaws or comparable organizational documents in a manner that would materially and adversely affect the transactions contemplated by this Agreement, (valuing ii) take any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided action or willfully fail to take any action that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, is intended or would may reasonably be expected to result in any of the conditions to the Closing set forth in Article VIII not being satisfied, or (iii) agree to, preventor make any commitment to, materially delay or materially impair the consummation engage in any of the Transactions;
(x) other than capital expenditures made in accordance with actions prohibited by this Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin5.4(c).
Appears in 2 contracts
Sources: Transaction Agreement (Ameren Energy Generating Co), Transaction Agreement (Dynegy Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use from and after the date hereof until the earlier of the Closing and the termination of this Agreement (unless Purchaser shall otherwise approve in writing), and except as otherwise expressly required by this Agreement or as required by a Governmental Entity or applicable Law, conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course of business and, to the extent consistent with past practicetherewith, shall use and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use their respective commercially reasonable efforts to preserve the Retained Businessmaintain its and its Subsidiaries’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customersclients, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatforegoing sentence, from and after the date hereof until the earlier of the Closing and the termination of this Agreement, except as otherwise expressly required by this Agreement, required by a Governmental Entity or applicable Law, expressly required by the terms of any Company Material Contract in effect prior to the date of this Agreement (correct and prior complete copies of which have been made available to Purchaser) or entered into following the First Effective Time date of this Agreement in accordance with the terms of this Section 3.1, as approved in writing by Purchaser (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed set forth in Section 5.01(b3.1(b) of the Company Disclosure Letter)Schedule, the Company shall not and shall cause its Subsidiaries not permit to:
(1) adopt or propose any change in its Organizational Documents (other than to correct scrivener’s errors or immaterial or ministerial amendments);
(2) merge or consolidate with any other person, except for any such transactions solely among wholly owned Subsidiaries of the Company or in connection with any acquisition permitted by clause (3) below, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material restrictions on its properties, assets, operations or businesses;
(3) acquire assets or equity interests outside of the ordinary course of business from any other person with a value or purchase price in the aggregate in excess of $10,000,000; provided, however, that the Company shall provide notification to Purchaser in the event that the Company or any of its Subsidiaries to:acquires assets or equity interests outside of the ordinary course of business from any other person with a value or purchase price in the aggregate in excess of $1,000,000;
(i4) except issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or otherwise enter into any contract or other agreement, understanding or arrangement (whether oral or written) with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A))voting of, (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except of the Company or capital stock or other equity interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such transaction shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than (A) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (I) by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to the Company or another direct or indirect wholly owned Subsidiary of the Company Company, (II) to the Other Investor (provided that notice shall be provided to Purchaser of any such issuance no less than five business days prior to such issuance), (III) pursuant to any present employee, director or to consultant benefit plan or program of or assumed by the Company or (2) normal semiannual cash dividends any of its Subsidiaries or any present employee agreements or arrangements or programs, including the issuance of performance shares, restricted shares, options or similar securities in an aggregate amount and on the Common Stock as described terms separately disclosed to Purchaser on February 20, 2024, (IV) in connection with any acquisition permitted by clause (3) above, or (V) in connection with any earn-out, deferred or contingent payment obligations required by the terms of any acquisition contract in effect prior to the date of this Agreement or entered into following the date of this Agreement in accordance with the terms of this Section 5.01(b)(i3.1 or (B) proxies or voting agreements solicited by or on behalf of the Company Disclosure Letterin connection with the 20% Approval);
(5) reclassify, (D) enter into split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any agreement with respect to the voting of its capital stock, other equity interests or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (or other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Unitsequity interests, in each case except in accordance connection with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary tax withholding obligations of the Company);
(ii6) merge or consolidate with incur any other Personindebtedness for borrowed money in excess of $10,000,000 in the aggregate, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: for (A) establish, adopt, amend or terminate any material Company Plan or amend the terms indebtedness in replacement of any outstanding equity-based awards other than any such action taken existing indebtedness for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or borrowed money on terms substantially consistent with or more beneficial favorable to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinreplaced,
Appears in 2 contracts
Sources: Investment Agreement (AlTi Global, Inc.), Investment Agreement (AlTi Global, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, During the period from and after the execution date of this Agreement and prior to until the First Effective Time Acceptance Date (unless Parent shall otherwise approve or until termination of this Agreement in writing, which approval shall not be unreasonably withheld, conditioned or delayedaccordance with Article 7 hereof (the “Termination Date”)), and except (i) as (1) may be required by applicable Law, (2ii) expressly as may be agreed in writing by Parent (which consent, or lack thereof, may not be unreasonably delayed), (iii) as may be required by this Agreement or (iv) as set forth in Section 5.1 of the Transaction Documents Company Disclosure Schedule, the Company covenants and agrees with Parent that (including A) the business of the Company and its Subsidiaries shall be conducted in the ordinary course and consistent with past practice, and, to the extent consistent therewith, the Company and its Subsidiaries shall use their commercially reasonable efforts to preserve intact their current business organizations, to keep available the services of their current officers and key employees, and to preserve their relationships with material customers, suppliers, licensors, licensees, advertisers, distributors and other third parties having business dealings with them, and to preserve in all material respects the goodwill of their respective businesses; provided, however, that no action by the Company or any of its Subsidiaries with respect to matters addressed specifically by any specific provision of clause (B) of this Section 5.1 shall be deemed a breach of this clause (A) of Section 5.1 unless such action would constitute a breach of such specific provision of clause (B), and (B) the Company shall not, and (as applicable) shall not permit any of its Subsidiaries to:
(a) (i) authorize for issuance, issue, deliver, sell, or agree to issue, deliver or sell, or pledge or otherwise encumber, any shares of capital stock or any other securities convertible into, or any rights, warrants or options to acquire, any such shares, except for issuances of Shares upon the exercise of Options outstanding as of the date of this Agreement or purchase rights under the Company ESPP, or (ii) repurchase, redeem or otherwise acquire, any shares of capital stock or other equity interests, except for the repurchase of Shares in connection with the Separation vesting of Restricted Shares under, and in accordance with the terms of, the Stock Option Plans and the Distribution agreements executed thereunder;
(b) (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it, (ii) alter through merger, liquidation, reorganization, restructuring or in any other fashion its corporate structure or ownership, (iii) amend or otherwise change the Company Certificate or Company Bylaws or the certificate of incorporation, bylaws or equivalent organizational documents of any Subsidiary, or (iv) split, combine or reclassify any shares of its capital stock;
(c) declare, set aside or pay any dividends on (whether in cash, stock or property), or make any other distributions in respect of, any of its capital stock, except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or another of its wholly owned Subsidiaries with respect to capital stock;
(d) (i) grant or agree to any material increase in the compensation or fringe benefits of, or pay any bonus to or enter into any new employment, severance or termination agreement, or amend any existing employment, severance or termination agreement with any current or former director, officer or employee except for (A) increases in compensation and payment of bonuses expressly required under employment agreements, bonus plans and other Company Plans, agreements and arrangements existing as contemplated of the date of this Agreement, (B) ordinary course raises granted to non-officer employees in connection with regularly scheduled performance reviews and (C) entering into offer letters with newly-hired non-officer employees, the terms and conditions of which shall be substantially similar to the terms and conditions of the forms previously provided to Parent and Purchaser, and which shall not provide for a term of employment or severance payments (other than those generally made pursuant to applicable Company policy, if any); (ii) become obligated under any employee benefit plan that was not in existence on the date hereof, or amend, modify or terminate any Company employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof, except as required by Law or the terms of any such plan; or (iii) pay any benefit not required by any plan or arrangement as in effect as of the date of this Agreement (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise required or permitted by the Final Step Planterms of this Agreement);
(e) acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing all or substantially all the assets or capital stock or other equity interests of, any business or any corporation, limited liability company, partnership or other business organization, other than purchases of assets in the ordinary course of business consistent with past practice and not in excess of $100,000;
(3f) sell, lease, license, mortgage or otherwise expressly disclosed encumber or subject to any lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any lien or otherwise dispose of, any of its properties or assets other than (i) properties or assets not in Section 5.01(aexcess of $100,000 in one instance or $200,000 in the aggregate, (ii) in the ordinary course of business consistent with past practice, (iii) non-exclusive trademark and logo licenses granted by the Company to partners for marketing purposes in the ordinary course of business and that have a term of one year or less remaining or that are terminable without penalty upon 60 days or less notice; (iv) nonexclusive licenses granted by the Company in the ordinary course of business to customers for such customers’ use of the Company Disclosure Letter)Company’s products and services, (v) liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company shallin accordance with GAAP, and shall cause (vi) liens of landlords, carriers, warehousemen, mechanics and materialmen that are incurred in the ordinary course of business, in each instance for amounts not yet due and payable;
(g) incur, assume or pre-pay any indebtedness for borrowed money or enter into any agreement to incur, assume or pre-pay any indebtedness for borrowed money, except for (i) payments required or permitted and the incurrence of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business indebtedness in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions financing of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan capital expenditures in the ordinary course of business consistent with past practice that does and not materially increase the cost in excess of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries$50,000;
(ivh) incur make or forgive any Indebtedness loans, advances or issue any warrants or other rights to acquire any Indebtednesscapital contributions to, except (A) in guarantees for the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement benefit of, or to refinanceinvestments in, existing Indebtedness on then prevailing market terms any party, other than loans between or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect and cash advances to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings Company’s or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not Subsidiary’s employees for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), reimbursable travel and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) business expenses incurred in the ordinary course of business consistent with past practice and in guarantees made by the aggregate not in excess of 120% Company of the obligations of any of its Subsidiaries for the benefit of such Subsidiary;
(i) assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any person other than the Company and its Subsidiaries, enter into any “keep well” or other agreement to maintain any financial statement condition of any person other than the Company and its Subsidiaries, or enter into any arrangement having the economic effect of any of the foregoing;
(j) fail to maintain insurance covering risks of such types and in such amounts reflected in as are consistent with the Company’s capital expenditure budget for each of 2017past practices, 2018 and 2019 set forth in Section 5.01(b)(v) of or cancel or terminate any material insurance policy that names the Company Disclosure Letteras beneficiary or loss payable payee;
(vik) with respect to establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries, or (ii) Subsidiaries organized outside of the Retained BusinessUnited States and its territorial possessions;
(l) amend, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon modify or otherwise dispose waive any term of any material Intellectual Property; provided that this clause of its outstanding securities;
(vim) shall not restrict enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, except as required by Law;
(An) ordinary course non-exclusive licenses settle or ordinary course security interests in connection with the production compromise any pending or financing of film and television programming threatened suit, action, claim or video game productionlitigation, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not except in the ordinary course of business and where such settlement or compromise would result in payments (individually and not in the aggregate), net of insurance, by the Company of less than $75,000,000 individually in 100,000;
(o) change any event of the material accounting policies, practices or procedures (other than transactions among including material Tax accounting policies, practices and procedures) used by the Company and its wholly owned Retained Subsidiaries)Subsidiaries as of the date hereof, (D) licenses, sales, letting lapse, abandonment and cancellations except as may be required as a result of Intellectual Property that is used a change in applicable Law or held for use exclusively in the SpinCo Business and (E) Affiliation AgreementsGAAP;
(viip) make or change any material tax election, make or change any material method of accounting with respect to the Retained BusinessTaxes or compromise any material Tax liability or file any material amended Tax Return, transferexcept in each case as required by applicable Law;
(q) pay, leasedischarge or satisfy any claims, licenseliabilities or obligations (absolute, sellaccrued, assignasserted or unasserted, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon contingent or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)otherwise), except for (A) salesother than the payment, leases, licenses discharge or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or $100,000,000 individually reserved against in any event or (B) transactions among the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice, or payments otherwise expressly permitted by the Retained Subsidiariesterms of this Agreement;
(viiir) except with respect transfer or license to SpinCo and any third party any Company Intellectual Property (other than pursuant to a contract in effect as of the SpinCo Subsidiaries, issue, deliver, sell, grant, transferdate of this Agreement), or encumber, amend or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, modify any shares contract in effect as of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the relating to Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained BusinessIntellectual Property, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not grant in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any business of non-cash consideration at its fair market value as exclusive trademark and logo licenses that have a term of the date of the agreement for such acquisition); provided one year or less remaining or that neither are terminable without penalty upon 60 days or less notice and that are granted by the Company nor any of its Retained Subsidiaries shall enter into any such transaction that wouldto partners for marketing purposes, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and non-exclusive licenses to customers in connection with the provision of film and television and production programming the Company’s or its Subsidiaries’ services; and
(includins) agree or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Best Buy Co Inc), Merger Agreement (Napster Inc)
Interim Operations. (a) The Company covenants Crown and agrees King each covenant and agree as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent Crown or King, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1otherwise expressly contemplated by this Agreement or as set forth in Section 7.1(a) required by applicable Lawof such Party’s Disclosure Letter, (2i) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in all material respects in the ordinary course of business consistent with past practice, Ordinary Course and the Company shall, and shall cause each of its Subsidiaries to, solely (ii) to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributorslicensors, licensorslicensees, creditors, lessors, employees Service Providers and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees Service Providers and agents, except as otherwise expressly contemplated by this Agreement.
(b) Without limiting the generality of, of and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatof Section 7.1(a), from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise (unless Parent shall otherwise approve w) expressly contemplated by this Agreement, (x) required by applicable Law, (y) as approved in writing, writing by the other Party (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3z) otherwise expressly disclosed set forth in Section 5.01(b7.1(b) of the Company such Party’s Disclosure Letter), the Company each Party, on its own account, shall not and shall not permit any of cause its Subsidiaries not to:
(i) make or propose any change to such Party’s Organizational Documents or, except for amendments that would both not materially restrict the operations of such Party’s businesses and not reasonably be expected to prevent, materially delay or materially impair the ability of such Party to consummate the Transactions, the Organizational Documents of any of such Party’s Subsidiaries, including, in the case of King, King Sub’s Organizational Documents;
(ii) except for any such transactions among its direct or indirect wholly owned Subsidiaries, (A) merge or consolidate itself or any of its Subsidiaries with any other Person, or (B) restructure, reorganize or completely or partially liquidate;
(iii) acquire assets outside of the Ordinary Course from any other Person (A) with a fair market value or purchase price in excess of $10,000,000 in the aggregate in any transaction or series of related transactions (including incurring any Indebtedness related thereto), in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or (B) that would reasonably be expected to prevent, materially delay or materially impair the ability of such Party to consummate the Transactions, in each case, other than acquisitions of inventory or other goods in the Ordinary Course and transactions among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or of any of its Subsidiaries (other than in the case issuance of clause (A)), shares (A) amend by its certificate direct or indirect wholly owned Subsidiary to it or another of incorporation its direct or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)indirect wholly owned Subsidiaries, (B) split, combine, subdivide or reclassify its in respect of equity-based awards outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary as of the Company which remains a wholly owned Subsidiary after consummation date of such transaction)this Agreement, or (C) granted in accordance with Section 7.1(b)(xvi) in each of clauses (B) and (C), in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance (other than any Permitted Encumbrances) over any material portion of such Party’s and its Subsidiaries’ consolidated properties and assets that is not incurred in the Ordinary Course on any of its assets or any of its Subsidiaries, except for Encumbrances (A) that are required by or automatically effected by Contracts in place as of the day hereof, (B) that do not materially detract from the value of such assets or (C) that do not materially impair the operations of such Party or any of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from Crown and any of its direct or indirect wholly owned Subsidiaries or to or from King and any of its direct or indirect wholly owned Subsidiaries, as applicable, or in accordance with Section 7.1(b)(xvi)) in excess of $1,000,000 in the aggregate;
(vii) except to the extent expressly provided by, and consistent with, Section 7.1(b)(vii) of such Party’s Disclosure Letter, declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or to the Company modify in any material respect its dividend policy;
(viii) reclassify, split, combine, subdivide or redeem, purchase (2through such Party’s share repurchase program or otherwise) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock, other than with respect to (A) the capital stock or other equity interests of a direct or indirect wholly owned Subsidiary of such Party or (B) the acquisition of shares of Crown Common Stock or King Common Stock, as applicable, tendered by Service Providers in connection with a cashless exercise of Crown Options or King Options, as applicable, outstanding as of the date of this Agreement or in order to pay Taxes in connection with the exercise or vesting of Crown equity awards or King equity awards, as applicable, outstanding as of the date of this Agreement or granted in accordance with Section 7.1(b)(xvi), pursuant to the terms of the Crown Stock Plan or King Stock Plan, as applicable, and the applicable award agreement, in the Ordinary Course;
(ix) except to the extent expressly provided by, and consistent with, Section 7.1(b)(ix) of such Party’s Disclosure Letter, make or authorize any payment of, or accrual or commitment for, capital expenditures, except any such expenditure (A) not in excess of $180 million in the aggregate during any consecutive twelve (12) month period (other than capital expenditures within the thresholds set forth in Section 7.1(b)(ix) of such Party’s Disclosure Letter), (1B) pursuant expenditures not in excess of $50 million (net of insurance proceeds) in the aggregate that such Party reasonably determines are necessary to avoid a material business interruption or maintain the forfeiture of, safety and integrity of any asset or withholding property or (C) paid by any direct or indirect wholly owned Subsidiary to such Party or to any other direct or indirect wholly owned Subsidiary of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Unitssuch Party, in each case in accordance with past practice response to any unanticipated and subsequently discovered events, occurrences or developments (provided, that such Party will use its reasonable best efforts to consult with the terms other Party prior to making or agreeing to any such capital expenditure);
(x) other than in the Ordinary Course or in connection with any transaction or potential transaction described on Section 7.1(a) of such Party’s Disclosure Letter, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, adversely amend, modify, supplement or waive, terminate, assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract other than (A) expirations and renewals of any such Contract in the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement Ordinary Course in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofContract, (B) grant non-exclusive licenses under Intellectual Property owned by Crown and its Subsidiaries or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company King or any of its Subsidiaries, as applicable, in each case, granted in the Ordinary Course, or (C) increase the compensation, bonus any agreement among such Party and its direct or pension, welfare indirect wholly owned Subsidiaries or other benefits of any director, officer among such Party’s direct or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its indirect wholly owned Subsidiaries;
(ivxi) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) than in the ordinary course of business consistent Ordinary Course or with past practice in a principal amount respect to amounts that are not material to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company such Party and its Subsidiaries, taken as a whole, than existing Indebtednesscancel, modify or waive any debts or claims held by it or any of its Subsidiaries or waive any rights held by it or any of its Subsidiaries except debts or claims among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xii) settle or compromise, or offer or propose to settle or compromise any material Proceeding, including before a Governmental Entity, except in accordance with a maturity date the parameters set forth in Section 7.1(b)(xii) of such Party’s Disclosure Letter; provided, that no more than 10 years after such settlement or compromise, or offer in respect thereof, may involve any injunctive or other non-monetary relief which, in either case, imposes any material restrictions on the date business operations of the Contract evidencing such IndebtednessParty and its Subsidiaries or Affiliates;
(xiii) amend any material financial accounting policies or procedures, except as required by changes to GAAP;
(Bxiv) except make, change or revoke any material election with respect to the Bridge FacilityTaxes, in replacement change any material Tax accounting method or period, enter into any material closing agreement with respect to Taxes, enter into any material Tax sharing, allocation or indemnification agreement or arrangement, settle, compromise or otherwise finally resolve any material Tax claim, audit, assessment or dispute, surrender any right to claim a refund of a material amount of Taxes, or fail to file when due (taking into account any available extensions) any material Tax Return;
(xv) transfer, sell, lease, divest, cancel, abandon, allow to lapse or expire or otherwise dispose of, or permit or suffer to refinanceexist the creation of any Encumbrance upon, existing Indebtedness on then prevailing market terms any assets (tangible or on terms substantially consistent with intangible), product lines or more beneficial businesses material to the Company it and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi))Subsidiaries, except for in connection with (A) sales of or non-exclusive licenses of the foregoing provided in the Ordinary Course, (B) sales of obsolete assets, (C) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock not including services or sales of inventory in the Retained Subsidiariesordinary course of business) with a fair market value not in excess of $50,000,000 individually if the transaction is not 150 million in the ordinary course or $100,000,000 individually aggregate other than pursuant to Material Contracts in any event or (B) transactions among effect prior to the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transferdate of this Agreement, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable entered into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on after the date of this Agreement in accordance with this Agreement and (D) sales among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xvi) except as required by the existing terms of any Benefit Plan as in effect on the date of this Agreement, as permitted under this Agreement or as required by applicable Law, increase or change the compensation or benefits payable to any Service Provider other than in the Ordinary Course; provided, that, notwithstanding the foregoing, except as expressly disclosed in Section 7.1(b)(xvi) of such Party’s Disclosure Letter or required pursuant to a Crown Benefit Plan or King Benefit Plan, as applicable, in effect as of the date of this Agreement, the Parties shall not: (A) grant any new long-term incentive or equity-based awards and or amend or modify the Company Stock Plansterms of any such outstanding awards under any Crown Benefit Plan or King Benefit Plan, as applicable, (B) Investment Preferred Stock (as defined in the Bridge Facility) grant any retention or transaction bonuses, (C) increase or change the compensation or benefits payable to any executive officer (other than changes in health and welfare benefits that are generally applicable to all salaried Service Providers in the Ordinary Course), (D) terminate, enter into, amend or renew any material Benefit Plan, other than routine amendments to health and welfare plans (other than severance plans) that do not materially increase benefits or result in a material increase in administrative costs, or, other than as permitted by wholly owned Subsidiaries Section 7.1(b)(xvi) of such Party’s Disclosure Letter, adopt any compensation or benefit arrangement that would be a material Benefit Plan if it were in existence as of the date of this Agreement, (E) accelerate the vesting of any compensation for the benefit of any Service Provider, (F) increase or change the severance terms applicable to any Service Provider, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) other than as required by GAAP, change any assumptions required by GAAP used to calculate funding or contribution obligations under any Benefit Plan, or increase or accelerate the funding or contribution obligations under any Benefit Plan, or increase or accelerate the funding rate in respect of any Benefit Plan or (I) terminate the employment of any executive officer (other than for cause) or hire any new executive officer (other than as a replacement hire receiving substantially similar terms of employment); provided, that, to the Company extent that a Party intends to hire an individual to replace a named executive officer of such Party, such Party shall first consult in good faith with the other Party prior to, and with respect to, the hiring of such individual;
(xvii) recognize any labor union, works council, or to other labor organization or employee representative as the representative of any other wholly owned Subsidiary of the Company; provided thatemployees of the Party or its Subsidiaries, or become a party to, establish, adopt, amend, commence negotiations for or terminate any collective bargaining agreement or other labor-related Contract with a labor union, works council, or other labor organization or employee representative, in each case, other than as required by applicable Law;
(xviii) incur any Indebtedness (including the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant issuance of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any optionsdebt securities, warrants or other rights to acquire, acquire any debt security) or guarantee any such shares Indebtedness, except for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not Indebtedness for borrowed money incurred in the ordinary course Ordinary Course under Crown’s or King’s, as applicable, revolving credit facilities and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase other lines of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value credit existing as of the date of this Agreement, (B) guarantees by Crown or any direct or indirect wholly owned Subsidiary of Crown of Indebtedness of Crown or any other direct or indirect wholly owned Subsidiary of Crown, (C) guarantees by King or any direct or indirect wholly owned Subsidiary of King of Indebtedness of King or any other direct or indirect wholly owned Subsidiary of King, (D) Indebtedness incurred in connection with a refinancing or replacement of existing Indebtedness (but in all cases which refinancing or replacement shall not increase the agreement aggregate amount of Indebtedness permitted to be outstanding thereunder and in each case on customary commercial terms consistent in all material respects with the Indebtedness being refinanced or replaced), (E) Indebtedness incurred pursuant to letters of credit, performance bonds or other similar arrangements in the Ordinary Course, (F) interest, exchange rate and commodity swaps, options, futures, forward contracts and similar derivatives or other hedging Contracts (1) not entered for such acquisition); provided that neither speculative purposes and (2) entered into in the Company nor any Ordinary Course and in compliance with its risk management and hedging policies or practices in effect on the date of its Retained Subsidiaries shall enter into any such transaction that wouldthis Agreement, or would reasonably be expected to, prevent, materially delay (G) Indebtedness incurred among such Party and its direct or materially impair the consummation of the Transactionsindirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xxix) convene any special meeting (or any adjournment or postponement thereof) of each Party’s respective stockholders other than capital expenditures made the Crown Stockholders Meeting or King Stockholders Meeting, as applicable; or
(xx) agree or commit to do any of the foregoing.
(c) Nothing contained in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinthis Agreement s
Appears in 2 contracts
Sources: Merger Agreement (C&J Energy Services, Inc.), Merger Agreement (Keane Group, Inc.)
Interim Operations. (a) The Except as required by applicable Law or expressly contemplated by this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)Time, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time (unless Parent shall otherwise approve in writingTime, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1A) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3B) otherwise expressly disclosed contemplated by this Agreement or as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter, or (C) Parent may approve in writing (such approval not to be unreasonably withheld), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) adopt or propose any change in its articles of incorporation or by-laws or other similar governing documents;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with respect a value or purchase price in the aggregate in excess of $25 million in any transaction or series of related transactions, other than acquisitions pursuant to SpinCo and Contracts in effect as of the SpinCo date of this Agreement;
(iv) except for the issuance of Shares upon the exercise of Company Options or upon the vesting or settlement of Company Units, Deferred Shares or Company Awards, in all cases outstanding on the date of this Agreement, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than in the case issuance of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any shares by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(except for v) create or incur any such transaction by a wholly owned subsidiary Lien material to the Company or any of its Subsidiaries on any assets of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its Subsidiaries having a value in excess of $5 million;
(vi) make any loans, advances, guarantees or capital stock contributions to or investments in any Person (except for (1) other than the Company or any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company) in excess of $25 million in the aggregate;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to another any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of to the Company or to the Company any other direct or (2indirect wholly owned Subsidiary) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement Contract with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock;
(other than (1ix) pursuant to the forfeiture ofincur, or withholding of Taxes enter into, amend, modify or terminate any Contract with respect to, any indebtedness for borrowed money or guarantee, or enter into, amend, modify or terminate any guarantee of, such indebtedness of another Person, or issue, sell, enter into, amend, modify or terminate any debt securities or warrants or other rights to acquire any debt security of the Company Restricted Stock Unitsor any of its Subsidiaries, except for (i) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed $25 million in the aggregate, (ii) indebtedness for borrowed money incurred in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company Deferred Stock Units of indebtedness of wholly owned Subsidiaries of the Company or (iv) interest rate swaps that the Company Performance Stock Units, in each case in accordance or any of its Subsidiaries enters into on customary commercial terms consistent with past practice and with not to exceed $20 million in notional amount in the terms aggregate;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Stock Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $5 million in the aggregate during any 12 month period;
(xi) other than in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract (under clause (A), (B), (C), (D), (E) or (F) of the definition of such term) or an IP Contract had it been entered into prior to this Agreement;
(xii) make any changes with respect to financial accounting policies or procedures, except as required by changes in GAAP or the rules or policies of the Public Company Accounting Oversight Board;
(xiii) settle any litigation or other proceedings before a Governmental Entity (A) for an amount in excess of $1.25 million or any obligation or liability of the Company in excess of such amount, (B) on a basis that would result in (I) the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Entity that would restrict the future activity or conduct of the Company or any of its Subsidiaries or (II) a finding or admission of a violation of Law or violation of the rights of any Person by the Company or any of its Subsidiaries, or (C) that is brought by any current, former or purported holders of any capital stock or debt securities of the Company or any of its Subsidiaries relating to the transactions contemplated by this Agreement;
(xiv) other than in the ordinary course of business consistent with past practice, amend, modify or terminate any Material Contract (under clause (A), (B), (C), (D), (E) or (F) of the definition of such term) or IP Contract, or cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $500,000 or in the aggregate a value in excess of $5 million;
(xv) make any material Tax election or material change in any Tax election, change or consent to change the Company’s or any of its Subsidiaries’ method of accounting for Tax purposes, file any material amended Tax Return or enter into any settlement or compromise of any material Tax liability of the Company or any of its Subsidiaries;
(xvi) transfer, sell, assign, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of (A) the i2 government software assets or business, (B) the marketing services business, (C) capital stock of any of its Subsidiaries or (D) any other material assets, product lines, operation rights or businesses of the Company or its Subsidiaries, except in the case of subclause (D), (x) in connection with services provided in the ordinary course of business and sales of obsolete assets, (y) except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $10 million in the aggregate and (z) other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvii) except as required pursuant to Company Benefit Plans set forth in Sections 5.1(h)(i) and 5.1(h)(viii) of the Company Disclosure Letter as in effect on the date of this Agreement (Agreement, or as modified after the date otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any of this Agreement in accordance with the terms of this Agreement) its Subsidiaries, directors, officers or (2) purchasesemployees, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge increase the compensation, bonus or consolidate with pension, welfare, severance or other benefits of, pay any other Personbonus to, or restructuremake any new equity awards to any of its or its Subsidiaries’ directors, reorganize officers or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongemployees, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Benefit Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofawards, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (Eiv) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any of the Company Plan (including any equity-based awards)Benefit Plans, (Fv) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP, or (Gvi) forgive any loans to any of its or of any of its Subsidiaries’ directors, officers or employees;
(xviii) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in ARTICLE VII not being satisfied; or
(xix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any written material broad-based communications to the directors, officers or employees of the Company or any of its Subsidiaries;Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(ivc) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) Parent shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company knowingly take or permit any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have take any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which action that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect reasonably likely to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair prevent the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinMerger.
Appears in 2 contracts
Sources: Merger Agreement (Choicepoint Inc), Merger Agreement (Reed Elsevier PLC)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned delayed or delayedconditioned), and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a) 6.1 of the Company Disclosure Letter)) and except as required by applicable Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly provided in this Agreement, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned delayed or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Lawconditioned), (2C) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter)Letter or (D) as required by applicable Laws, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions by-laws or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers otherwise enter into any agreements or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongarrangements imposing material changes or restrictions on its assets, operations or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in excess of $1 million in the aggregate, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary and as permitted by Section 6.1(a)(vii)), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than, in each case, (A) the issuance of Shares upon conversion of the Debentures, (B) the issuance of Shares pursuant to Company Awards, including upon exercise thereof and (C) the issuance of Shares in connection with “cashless” or “net settled” exercises of Company Awards);
(v) create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries (other than the exclusions set forth in clauses (A), (B), (C) and (F) of the definition of Encumbrance);
(vi) make any loans, advances, guarantees (other than guarantees of service granted in the ordinary course of business) or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $500,000 in the aggregate during any 12-month period;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary or regular quarterly dividends not to exceed $0.055 per share payable in cash, declared and paid consistent with prior timing) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices, provided that the aggregate amount of outstanding indebtedness for borrowed money will not exceed $60 million at any one time or (B) interest rate swaps on customary commercial terms consistent with past practice and in compliance with the Company’s risk management policies in effect on the date of this Agreement and not to exceed $500,000 of notional debt in the aggregate;
(x) except as expressly set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $1 million in the aggregate during any 12-month period;
(xi) enter into any Contract that (A) would have been a Material Contract had it been entered into prior to the date of this Agreement or (B) is not terminable without liability within one year of the date of this Agreement and involves payment or receipt by the Company and its Subsidiaries of more than $5 million over the entire term of such Contract, except in the case of each of (A) and (B), for customer, vendor or technology licensing Contracts entered into in the ordinary course of business consistent with past practice that do not contain any of the provisions referred to in Section 5.1(j)(i)(D) and, in the case of vendor and technology licensing Contracts, do not have a term of longer than twelve (12) months;
(xii) make any material changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles;
(xiii) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $250,000 or any obligation or liability of the Company Plan in excess of such amount;
(xiv) (A) amend or modify any Material Contract in any material respect or in a manner adverse to the Company or its Subsidiaries, (B) terminate any Material Contract or (C) cancel, modify or waive any debts or claims held by it or waive any rights in each case other than in the ordinary course of business and having a value in excess of $250,000;
(xv) make any material Tax election, settle any material Tax claim or change any material method of Tax accounting;
(xvi) (A) grant, extend, amend (except as required in the diligent prosecution of the Intellectual Property), waive or modify any material rights in or to, nor sell, assign, lease, license, let lapse, abandon or cancel, or extend or exercise any option to sell, assign, lease or license, any material Intellectual Property, in each case, other than in the ordinary course of business, (B) fail to diligently prosecute the Company’s and its Subsidiaries’ patent and trademark applications or (C) fail to exercise a right of renewal or extension under any material inbound license for material Intellectual Property;
(xvii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or otherwise dispose of any material assets, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except in connection with services provided in the ordinary course of business or sales of obsolete assets;
(xviii) hire any employee or individual independent contractor with total expected annual compensation, excluding commissions, in excess of $150,000, other than to fill vacancies arising in the ordinary course of business at compensation levels consistent with past practice;
(xix) except as required pursuant to Benefit Plans or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any Employee or any director or officer of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus opportunity or pension, welfare, severance or other benefits of, pay any bonus (other than the 2009 Bonus which may be paid in the ordinary course of business consistent with past practice and in accordance with its terms as in effect on the date hereof: of this Agreement), or make any new equity awards to any Employee or any director or officer of the Company or any of its Subsidiaries, (Aiii) establish, adopt, amend or terminate any material Company Benefit Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofawards, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (Eiv) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including Benefit Plan, to the extent not already provided in any equity-based awards)such Benefit Plan, (Fv) enter into or establish any (1) employment, severance, change in control, termination, deferred compensation or other similar agreement with any Employee or any director or officer of the Company or any of its Subsidiaries or (2) other agreement, program or policy that would otherwise qualify as a material Benefit Plan had it been in place as of the date of this Agreement (it being understood and agreed that such plan, program or policy that cannot be terminated at any time by the Company or after Closing, Parent, without liability in excess of $500,000 in the aggregate is deemed per se material); (vi) change any discount rate assumptions or materially change any other actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP; or (Gvii) forgive any loans to Employees, directors or officers of the Company;
(xx) knowingly take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Closing set forth in Article VII not being satisfied; or
(xxi) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any written or material broad-based oral communications to the directors, officers or employees of the Company or any of its Subsidiaries;Subsidiaries pertaining to the effect upon employment, compensation or benefit matters that will result as a consequence of the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(ivc) incur any Indebtedness or issue any warrants or other rights to acquire any IndebtednessFrom the date of this Agreement until the Effective Time, except (A) as otherwise expressly provided in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednessthis Agreement, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to as the Company and its Subsidiariesmay approve in writing (such approval not to be unreasonably withheld, taken as a whole, than the Indebtedness being replaced conditioned or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednessdelayed), (C) intercompany Indebtedness among as set forth in Section 6.1(c) of the Company and its wholly owned Subsidiaries, Parent Disclosure Letter or (D) (1) to the extent as required by applicable Laws, Parent will not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security knowingly take or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or permit any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have take any obligations action or omit to take any action that is reasonably likely to result in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial conditions to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 Closing set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall Article VII not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinbeing satisfied.
Appears in 2 contracts
Sources: Merger Agreement (RR Donnelley & Sons Co), Merger Agreement (Bowne & Co Inc)
Interim Operations. (a) The Company covenants Unless theglobe otherwise agrees in writing and agrees except as to itself and its Subsidiaries thatotherwise expressly contemplated by this Agreement, from and after between the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)Closing, the Company shall, and the Sellers shall cause each of its Subsidiaries the Company and the Subsidiary to, (i) conduct the business of the Company and the Subsidiary only in the ordinary course and consistent with past practice; (ii) use its reasonable best efforts to conduct preserve and maintain their assets and properties and the Retained Business current relationships of the Company and the Subsidiary with their respective customers, suppliers, advertisers, distributors, agents, officers and Employees and other Persons with which the Company and the Subsidiary have significant business relationships; (iii) use reasonable best efforts to maintain all of the material assets owned or used by the Company and the Subsidiary in the ordinary course of business consistent with past practice, ; (iv) continue capital expenditures substantially in accordance with the timing and amounts forecast for capital expenditures as set forth in the schedule of capital expenditures previously provided by the Company shallto theglobe; (v) maintain insurance in full force and effect substantially comparable in amount, scope and shall cause each coverage to that in effect on the date of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, this Agreement; (vi) use commercially reasonable best efforts to preserve the Retained Business’ organization intact goodwill and maintain ongoing operations of the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and the Subsidiary; (vii) maintain the books and records of the Company and the Subsidiary in the usual, regular and ordinary manner, on a basis consistent with past practice; (viii) perform and comply in all material respects with its Subsidiaries’ present employees Commitments; and agents(ix) comply in all material respects with applicable Laws.
(b) Without limiting the generality ofExcept as expressly contemplated by this Agreement, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after between the date of this Agreement and the Closing, the Company will not, and the Sellers will cause the Company and the Subsidiary not to, do any of the following without the prior written consent of theglobe:
(i) create any Encumbrance on any material properties or assets (whether tangible or intangible) of the Company or the Subsidiary;
(A) other than inventory in the ordinary course of business, sell, assign, transfer, lease or otherwise dispose of or agree to sell, assign, transfer, lease or otherwise dispose of any assets of the Company or the Subsidiary or (B) cancel any indebtedness owed to the First Effective Time Company or the Subsidiary;
(unless Parent iii) merge or consolidate with any Person;
(iv) acquire assets or capital stock of or other equity interests in any Person;
(v) (A) issue, incur, create, assume or otherwise become liable for any Indebtedness, (B) assume, grant, guarantee or endorse, or make any other accommodation or arrangement making the Company or the Subsidiary responsible for, any Liabilities of any other Person, (C) make any loans, advances or capital contributions to, or investments in, any Person or (D) repay any amounts owing under any Indebtedness;
(vi) change any method of accounting or accounting practice used by the Company or the Subsidiary;
(vii) (A) enter into or adopt or amend any existing Commitment relating to severance, (B) enter into or adopt or amend any existing severance plan, (C) enter into or adopt or amend any Commitment with any Employee or any Company Employee Plan (including, without limitation, the plans, programs, agreements and arrangements referred to in Section 3.20), (D) grant any options or awards pursuant to equity-based plans, or (E) grant any increases in compensation (except compensation increases associated with promotions and annual reviews in the ordinary course of business, which such compensation increases shall otherwise approve in writingbe subject to the prior written approval of theglobe, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:;
(iviii) except make any change in the Company's or the Subsidiary's Tax accounting methods, any new election with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation Taxes or bylaws (any modification or comparable governing documents) (other than amendments to the governing documents revocation of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement existing election with respect to the voting Taxes or settle or otherwise dispose of its capital stockany Tax audit, dispute, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock UnitsTax proceeding, in each case in accordance with past practice and with without theglobe's express written consent thereto.
(ix) accelerate or delay the terms purchase of supplies or inventory, the shipment or sale of inventory, the collection of accounts or notes receivable or the payment of accounts or notes payable or accrued liabilities or expenses or otherwise operate the respective businesses of the Company Stock Plans as in effect on and the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereofSubsidiary, in each case, so long in a manner that would be inconsistent with past practice;
(x) except as the aggregate principal amount thereof does not exceed $2,500,000,000set forth in Schedule 5.2(b)(x), (J) hedging engage in compliance any transaction with the hedging strategy any of the Company as Stockholders or any of the date of this Agreement in the ordinary course of business consistent their Affiliates;
(xi) enter into, modify, terminate, amend, or waive, release or assign any rights or claims with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior respect to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing Commitment other than in the ordinary course of business consistent with past practice;
(vxii) with respect allow the lapse of any rights of ownership or use by the Company or the Subsidiary of any Company Intellectual Property right;
(xiii) repurchase, redeem or otherwise acquire or exchange any share of Company Common Stock, issue or sell any additional shares of the capital stock of, or other equity interests in, the Company or the Subsidiary, or issue or sell any securities convertible into or exchangeable for such shares or equity interests, or issue or grant any options, warrants, calls, subscription rights or other rights of any kind to acquire additional shares of such capital stock, such other equity interests or such securities;
(xiv) amend the Retained BusinessCompany's Certificate of Incorporation, other than with respect to acquisitions as amended, or Amended and Restated Bylaws or the Subsidiary's Memorandum and Articles of businessesAssociation or equivalent organizational documents of either the Company or the Subsidiary;
(xv) declare, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x)set aside, make or commit to pay any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses dividend or other dispositions of any properties or assets distribution (excluding capital stock of the Retained Subsidiaries) with a fair market value not whether in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiariescash, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, property or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viiicombination thereof);
(ixxvi) with respect take any action that is reasonably likely to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not result in the ordinary course representations and $50,000,000 warranties set forth in Article III becoming false or inaccurate in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value material respect as of the date Closing Date; or
(xvii) agree to take any of the agreement for such acquisitionactions referred to in this Section 5.2(b); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin.
Appears in 2 contracts
Sources: Merger Agreement (Theglobe Com Inc), Merger Agreement (Theglobe Com Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time or the termination of this Agreement in accordance with its terms (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned or delayed), and except as (1) otherwise expressly contemplated or permitted by this Agreement or required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution Law or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a7.1(a) of the Company Disclosure Letter)Schedule, the Company shall, and its Subsidiaries shall cause each the business of it and its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business be conducted in the ordinary course of business consistent with past practice, and the Company shall, it and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributorsofficers, licensorsemployees, creditors, lessors, employees lenders and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agentsassociates.
(b) Without limiting the generality ofof the foregoing, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date hereof until the Effective Time or the termination of this Agreement and prior to the First Effective Time in accordance with its terms, except (unless A) as otherwise specifically contemplated or permitted by this Agreement, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and which determination shall take into account the Company Overview Presentation, and except (C) as (1) is required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Law or (3D) otherwise expressly disclosed as set forth in Section 5.01(b7.1(b) of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and adopt any change in (A) the SpinCo certificate of incorporation or bylaws of the Company or (B) the other applicable governing instruments of the Subsidiaries (other than of the Company that, in the case of clause (A)B), would adversely affect Parent;
(ii) except pursuant to a transaction expressly permitted by any of Sections 7.1(b)(iii) or 7.1(b)(xiv), merge, amalgamate or consolidate the Company or any of its Subsidiaries with any other Person;
(iii) make any acquisition in excess of $50 million for all acquisitions in the aggregate, of the capital stock or other ownership interests of any other Person or the business or assets that comprise a business or product line of any other Person, whether by way of stock purchase, asset purchase, merger, consolidation or otherwise, except for acquisitions of inventory or supplies in the ordinary course of business;
(iv) other than (A) amend its certificate the issuance of incorporation Shares upon the settlement of Company Equity Awards outstanding as of the date hereof or bylaws (or comparable governing documentsissued in accordance with Section 7.1(b)(xvii) (other than amendments to the governing documents of any Subsidiary of the Company that would not preventand dividend equivalents thereon, delay or impair the Initial Merger or the other Transactionsif applicable), (B) split, combine, subdivide or reclassify its outstanding the issuance of shares of capital Company Subsidiary stock (except for any such transaction by a wholly owned subsidiary of to the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company, (C) as required to another direct comply with any Benefit Plan, Benefit Agreement or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends other written agreement as in effect on the Common Stock as described in date of this Agreement and set forth on Section 5.01(b)(i7.1(b)(iv) of the Company Disclosure Letter)Schedule, or (D) enter into any agreement with respect to the voting of its capital stockdispositions permitted by clause (xiv), or (E) purchaseissue, repurchasesell, redeem or otherwise acquire dispose of, grant any shares of its capital stock or other ownership interests of the Company or any of its Subsidiaries or securities convertible or exchangeable into or exercisable for any shares of its such capital stock or other ownership interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock, ownership interests or such convertible or exchangeable securities;
(v) make any loans, advances or capital contributions to or investments in any Person (other than (1A) to the Company or its wholly owned Subsidiaries, (B) as required pursuant to any Contract made available to Parent in the forfeiture ofdata room prior to the date hereof, (C) extensions of trade credit in the ordinary course of business and (D) loans, advances or withholding capital contributions in the aggregate of Taxes less than $15,000,000);
(vi) authorize, declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, other ownership interests or other securities, property or otherwise, with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms to any of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions its capital stock or other acquisitions of securities of ownership interests (except dividends or distributions by any direct or indirect wholly owned Subsidiary of the Company by to the Company or to any other wholly owned direct or indirect Subsidiary of the Company); provided, that the Company may, at its election, pay quarterly cash dividends in accordance with its past practice (including with respect to timing of declaration, record and payment dates and amount) but in no event in an amount that would exceed $0.23 per Share per fiscal quarter; provided, further, that the Company shall in no event declare any dividend that would be payable after the Effective Time;
(iivii) merge reclassify, split, combine, subdivide or consolidate with redeem, purchase or otherwise acquire, directly or indirectly, any of the capital stock of the Company or other Person, ownership interests or restructure, reorganize securities convertible or completely exchangeable into or partially liquidate exercisable for any shares of the capital stock of the Company or other ownership interests of the Company (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity acquisitions in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongcashless exercises of Company Stock Options or vesting or payment of Company Equity Awards, or Tax withholdings on the restructuring, reorganization vesting or liquidation of, any wholly owned Subsidiaries payment of the Company that would not prevent, materially delay or materially impair the TransactionsEquity Awards);
(iiiviii) except as expressly required by incur, assume, issue, modify, renew, syndicate, guarantee, prepay, refinance or otherwise become liable for any Company Plan as in effect on the date hereof: Indebtedness (directly, contingent or otherwise) (other than (A) establish, adopt, amend or terminate any material Company Plan or amend the terms letters of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan credit issued in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofpractice, (B) grant for borrowings in the ordinary course of business under (1) the Existing Credit Facility or provide (2) the Company’s commercial paper program, (C) any transaction Indebtedness between the Company and any of its Subsidiaries or retention bonuses between the Subsidiaries of the Company or (D) in an amount not to exceed $50,000,000) or acquire or redeem, offer to acquire or redeem, or exercise any directorright to make an offer to acquire or redeem the 3.375% Notes due November 1, officer2020;
(ix) make any capital expenditures, employee other than (A) capital expenditures in 2014 not in excess of the aggregate amount set forth in the Company’s capital expenditure plan for 2014 previously provided to Parent or capital expenditures in 2015 in an amount not in excess of 110% of the aggregate amount set forth in the Company’s 2014 capital expenditure plan and (B) any additional capital expenditures not described in clause (A) so long as the aggregate amount of such capital expenditures made pursuant to this clause (B) does not exceed $10,000,000 in the aggregate; provided, however, that the Company and its Subsidiaries shall be permitted to make emergency capital expenditures in an amount not to exceed $10,000,000 in the aggregate;
(x) make any material changes with respect to financial or Tax accounting methods of reporting income, deductions or other service provider items to financial accounting purposes, except as required by applicable Law or by changes in GAAP;
(xi) other than (A) Dissenting Shares (which are the subject of Section 4.2(f)), (B) stockholder litigation (which is the subject of Section 7.16) and (C) as contemplated by Section 7.5, settle or propose to settle any litigation, arbitration or other proceeding by or before a Governmental Entity (x) for a monetary amount in excess of $10,000,000 in the aggregate, (y) that imposes any material equitable or material non-monetary relief on the Company, any of its Subsidiaries or any of its officers or directors or (z) that requires the admission of wrongdoing by the Company or any of its Subsidiaries of a nature that would reasonably be expected to have any material adverse effect on any division of the Company or any of its Subsidiaries, (C) increase the compensation, bonus Subsidiaries or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company that disparages Parent or any of its Subsidiaries;
(ivxii) incur any Indebtedness change its fiscal or issue any warrants or other rights to acquire any IndebtednessTax year or, except to the extent required by Law, make or change any material Tax election;
(xiii) enter into any settlement, compromise or closing agreement with respect to any material Tax Liability or Tax refund or file any amended Tax Return with respect to any material Tax or surrender any right to claim a material refund of Taxes (except to the extent the consequences thereof are adequately reserved in accordance with GAAP in the Company Reports);
(xiv) sell, lease, license, transfer or otherwise dispose of any of its properties or assets (including capital stock of any Subsidiary of the Company) with a value in excess of $20,000,000 (including the value of any assumed liabilities), other than (A) sales or other dispositions of inventory and other assets in the ordinary course of business, (B) the licensing or sublicensing of Intellectual Property in the ordinary course of business consistent with past practice in a principal amount not or (C) as required pursuant to exceed $400,000,000 existing Contracts made available to Parent in the aggregate at dataroom prior to the date hereof;
(xv) (A) abandon, voluntarily permit to lapse before expiration, any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial Company IP that is material to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, or (B) except with respect sell, transfer or license to the Bridge Facility, in replacement of, any third-person or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial otherwise extend any Company IP that is material to the Company and its Subsidiaries, taken as a whole, other than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date non-exclusive licenses of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of Intellectual Property rights granted by the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(vxvi) except in the ordinary course of business, enter into or assume any swap, cap, floor, collar, futures contract, forward contract, option and any other derivative financial instrument, contract or arrangement, based on any commodity, security, instrument, asset, rate or index of any kind or nature whatsoever, whether tangible or intangible, (including for interest rate and foreign exchange rate hedging), except foreign exchange hedging on customary commercial terms in compliance with respect the Company’s hedging policies in effect on the date hereof;
(xvii) except as required pursuant to a Benefit Plan or Benefit Agreement in effect on the Retained Businessdate hereof or as set forth in Section 7.1(b)(xvii) of the Company Disclosure Schedule, (A) grant or provide any severance or termination payments or benefits to any Employees or Other Service Providers, (B) increase the compensation or pay or establish any award or bonus to or for any Employees or Other Service Providers, (C) establish, adopt, terminate or materially amend any Benefit Plan or Benefit Agreement or any plan, program, arrangement, policy or agreement that would be a Benefit Plan or Benefit Agreement if it were in existence on the date hereof, other than with respect to acquisitions Benefit Plans and Benefit Agreements that are not described in clause (D) below and in cases where such adoption, termination or amendment applies only to non-Executive Officers of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties the Company or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with Subsidiary of the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) Company in the ordinary course of business consistent with past practice and to the extent that such action would not reasonably be expected to result in material expense or Liability to the Company or any of its Subsidiaries, (D) grant any equity or equity-based awards, long-term incentive awards or retention awards, (E) hire any new employee of the Company or any Subsidiary of the Company or engage any other individual to provide services to the Company or any Subsidiary of the Company, other than with respect to non-Executive Officers of the Company or any Subsidiary of the Company in the aggregate not in excess ordinary course of 120% business consistent with past practice and with respect to Executive Officers as needed to replace such Executive Officer, (F) terminate the employment of any current Employee or the engagement of any current contractor of the amounts reflected Company or any Subsidiary of the Company, other than in the Company’s capital expenditure budget ordinary course of business consistent with past practice or for cause, (G) negotiate, enter into, amend, modify or terminate any Collective Bargaining Agreement, or (H) waive, limit, release or condition any Restrictive Covenant obligation or any Employee or Other Service Provider; provided, however, that the foregoing clauses (A) – (H) shall not restrict the Company or any of its Subsidiaries from entering into or making available to newly hired employees or to Employees in the context of promotions based on job performance or workplace requirements, including replacement of an open position, in each case in the ordinary course of 2017business, 2018 plans, agreements, benefits and 2019 set forth compensation arrangements (but not including equity or equity-based awards) that have a value that is consistent with the past practice of making compensation and benefits available to newly hired or promoted employees in similar positions; provided, further, that the consent of Parent shall be required in the event of a promotion or hiring to the Executive Officer level unless such promotion or hiring is to replace an Executive Officer. For purposes of this Section 5.01(b)(v7.1(b), the “Executive Officers” are those individuals listed on Section 7.1(b)(xvii) of the Company Disclosure LetterSchedule;
(vixviii) with respect adopt or enter into a plan or agreement of complete or partial liquidation or dissolution of the Company;
(xix) grant any Lien on any material assets of the Company or any of its Subsidiaries other than Permitted Liens;
(xx) enter into any new line of business that would be material to the Retained BusinessCompany and its Subsidiaries, transfertaken as a whole, leaseoutside the businesses being conducted by the Company and its Subsidiaries on the date hereof and any reasonable extensions thereof, licenseother than in the ordinary course;
(xxi) enter into any Contract that, sellafter giving effect to the Merger, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon would limit or otherwise dispose restrict in any material respect Parent or any of its respective Affiliates (other than the Company and its Subsidiaries), from engaging or competing in any line of business, in any location or with any Person;
(xxii) materially amend or modify, extend, terminate, sublease or grant any waiver under, any Material Contract or any Contract that would constitute a Material Contract if entered into prior to the date hereof (other than the expiration or renewal of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests Material Contract in connection accordance with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licensesits terms), in each ease case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less other than $35,000,000 individually if the transaction is not in the ordinary course of business;
(xxiii) enter into any transactions, agreements, arrangements or $75,000,000 individually in understandings with any event significant holder of Shares or their respective affiliated entities (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations that would be required to be disclosed under Item 404 of Intellectual Property that is used or held for use exclusively in Regulation S-K promulgated under the SpinCo Business and (E) Affiliation AgreementsSecurities Act;
(viixxiv) with respect to terminate the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose employment of any properties Executive Officer without cause or assets (including capital stock change the terms and conditions of employment of any of its Retained Subsidiaries but not including any Intellectual Property, Executive Officer in a manner which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with would constitute “good reason” under a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among Contract between the Company and the Retained Subsidiaries;such Executive Officer; or
(viiixxv) except with respect agree, authorize or commit, whether or not in writing, to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, do any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing
Appears in 2 contracts
Sources: Merger Agreement, Merger Agreement (Sigma Aldrich Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from From and after the execution and delivery of this Agreement until the earlier of the Effective Time and the termination of this Agreement and prior abandonment of the transactions contemplated by this Agreement pursuant to Article IX, except (i) as otherwise required, contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (ii) as set forth in Section 7.1(a) of the First Effective Time Company Disclosure Schedule or (unless iii) as Parent shall otherwise approve consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned delayed or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letterconditioned), the Company (A) shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve conduct their respective businesses in the Retained Business’ organization intact Ordinary Course of Business in all material respects, (B) shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to (x) maintain the Retained Business’ all existing relations relationships and goodwill with Governmental Entities, key customers, suppliers, distributors, licensors, creditors, lessors, employees suppliers and business associates and others other persons having material business dealings relationships with the Retained Business Company and its Subsidiaries and (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersy) and keep available the services of the officers and key employees of the Company and its Subsidiaries’ present employees , and agents.
(bC) Without without limiting the generality of, and in furtherance of, of the foregoing, the Company covenants shall not, and agrees as to itself and shall cause its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company,
(iii) adopt or enter into a plan of restructuring, reorganizing, dissolving, recapitalizing, complete or partial liquidation or similar transaction;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(v) acquire or agree to acquire by merger, consolidation, acquisition of stock, equity or assets or otherwise, any business, Person, division, properties or assets from any other Person, other than purchases or acquisitions of assets in the Ordinary Course of Business with a fair market value or purchase price not in excess of $1 million in any individual transaction or $2 million in the aggregate;
(vi) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon any properties or assets (excluding Intellectual Property Rights) material to the Company, except in connection with (A) sales of obsolete assets or (B) sales, leases, licenses or other dispositions of assets, in each case with a -50- fair market value (as reasonably determined by the Company) not in excess of $500,000 in any individual transaction or $1 million in the aggregate;
(vii) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo Subsidiaries voting of or transfer any shares of capital stock of the Company or capital stock or other equity or equity-based interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents delivery of any Common Shares upon (1) the conversion of either the Preferred Shares (including in respect of dividends accumulated on the Preferred Shares) in accordance with the terms of the Preferred Shares or (2) the conversion of the Company Notes in accordance with the Indenture and the exercise of the Capped Call Transactions in accordance with the Capped Call Confirmations (B) the issuance of Preferred Shares in connection with the payment of dividends on the Preferred Shares in accordance with the terms of the Preferred Shares or (B) the issuance of shares of such capital stock, other equity securities or convertible or exchangeable securities (1) by a Wholly Owned Subsidiary of the Company that would not preventto the Company or another Wholly Owned Subsidiary of the Company, delay (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans in effect as of the Capitalization Time or impair (3) pursuant to the Initial Merger ESPP in accordance with its terms and subject to Section 4.3(g));
(viii) make any loans, advances, guarantees or capital contributions to or investments in any Person in excess of $200,000 in the aggregate (other Transactionsthan between the Company and any of its Wholly Owned Subsidiaries in the Ordinary Course of Business);
(ix) declare, set aside, establish a record date for accrue, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock or other equity interests (and for the avoidance of doubt, excluding the Company Notes) of the Company or its Subsidiaries, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company or (B) dividends payable to the holders of Preferred Shares, payable in cash or Preferred Shares, in accordance with the terms of the Preferred Shares;
(x) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock redeem, purchase or otherwise acquire (except for or offer to do any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transactionforegoing), (C) declaredirectly or indirectly, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, other equity interests or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (or other equity interests, other than (1A) pursuant the withholding of Common Shares to satisfy the forfeiture of, payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock UnitsEquity Awards outstanding as of the date of this Agreement, in each case case, in accordance with past practice and with their terms and, as applicable, the terms of the Company Stock Plans as in effect on as of the date Capitalization Time and (B) pursuant to an exercise of this Agreement (or as modified after the date of this Agreement Capped Call Transactions in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)their terms;
(iixi) merge incur or consolidate with assume any other Personindebtedness for borrowed money, guarantee any indebtedness for borrowed money or restructure, reorganize enter into a “keep well” or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President similar arrangement in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to indebtedness for borrowed money except for any such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount indebtedness not to exceed $400,000,000 2.5 million individually or $5 million in the aggregate at aggregate;
(xii) incur, make or authorize any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement payment of, or to refinanceaccrual or commitment for, existing Indebtedness on then prevailing market terms capital expenditures, or on terms substantially consistent with any obligations or more beneficial to the Company and its Subsidiaries, taken liabilities in connection therewith -51- except as a whole, than the Indebtedness being replaced contemplated by or refinancedreasonably related to, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided107.5% of the aggregate amounts set forth in, furtherthe Company’s capital budget set forth in Section 7.1(a)(xii) of the Company Disclosure Schedule;
(xiii) enter into, that the Separation Agreement shall provide that SpinCo shall assume the obligations of terminate or materially amend any Contract pursuant to which the Company or any of its Subsidiaries purchase from a third party service provider Software (“Third Party IT Contracts”) (other than in the Ordinary Course of Business with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided Contract that the involve aggregate principal amount annual payments of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii300,000);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 2 contracts
Sources: Merger Agreement (Voya Financial, Inc.), Merger Agreement (Voya Financial, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to until the First Effective Time (unless Parent shall otherwise approve consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned or delayed)), and except (x) as (1) required otherwise expressly required, contemplated or permitted by applicable Lawthis Agreement, (2y) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a7.1(a) of the Company Disclosure LetterLetter or (z) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business its business in the ordinary course of business consistent with past practicepractice in all material respects and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it shall use commercially its reasonable best efforts to preserve the Retained Business’ organization its business organizations substantially intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, production companies, distributors, licensees, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) it and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality oflimiting, and in furtherance of, the foregoing, from the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date execution of this Agreement and prior until the Effective Time, except (1) as otherwise expressly required, contemplated or permitted by this Agreement, (2) as set forth in Section 7.1(a) of the Company Disclosure Letter or (3) as required by applicable Laws (including any Law issued in response to the First Effective Time COVID-19 (or SARS-CoV-2) virus), the Company will not (unless Parent shall otherwise approve consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:):
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws bylaws;
(ii) merge or comparable governing documentsconsolidate the Company with any other Person or restructure, reorganize or completely or partially liquidate;
(iii) acquire any assets outside of the ordinary course of business consistent with past practice from any other Person for consideration in excess of $5,000,000 in any individual transaction or series of related transactions or $20,000,000 in the aggregate;
(iv) issue, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Company (other than amendments the issuance of shares in respect of the settlement of Company Equity Awards outstanding as of the date hereof (or issued after the date hereof in accordance with the terms of this Agreement) in accordance with their terms and, as applicable, the Company Stock Plans as in effect on the date hereof or as the same may be amended in accordance with the terms of this Agreement), securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien (other than any Permitted Lien) that would be material to the governing documents of Company, taken as a whole, on any Subsidiary assets of the Company;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person, other than advances to Company that would not preventEmployees in respect of travel or other related business expenses, delay in each case in the ordinary course of business consistent with past practice;
(vii) declare, set aside, make or impair the Initial Merger pay any dividend or the other Transactions)distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(Bviii) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)redeem, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire or offer to redeem, repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect toshares to satisfy withholding Tax obligations upon the exercise, vesting or settlement of Company Restricted Stock Units, Company Deferred Stock Units Equity Awards outstanding as of the date hereof (or Company Performance Stock Units, in each case issued after the date hereof in accordance with past practice and with the terms of this Agreement) in accordance with their terms and, as applicable, the Company Stock Plans as in effect on the date of this Agreement (hereof or as modified after the date of this Agreement same may be amended in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(iiix) merge incur any indebtedness for borrowed money with an aggregate principal amount in excess of $5,000,000 or consolidate with any other guarantee such indebtedness of another Person, or restructure, reorganize issue or completely sell any debt securities or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except debt security of the Company;
(Ax) make or authorize any capital expenditure in the ordinary course excess of business consistent with past practice in a principal amount not to exceed $400,000,000 5,000,000 individually or in the aggregate at during any time outstanding twelve (12)-month period beginning on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the hereof;
(xi) enter into any Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as that would have been a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Material Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or had it been entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing other than in the ordinary course of business consistent with past practice;
(vxii) amend, modify, cancel or terminate any Material Contract, lease or sublease, or cancel, modify or waive any material debts or claims held by it or waive any material rights, in each case other than in the ordinary course of business consistent with past practice;
(xiii) amend any material License in any material respect, or allow any such License to lapse, expire or terminate, other than (A) amendments, renewals or extensions of Licenses in the ordinary course of business consistent with past practice or (B) non-renewal or non-extension of Licenses that are not necessary to conduct the Company’s business as then conducted;
(xiv) except as expressly provided for by Section 7.12, amend, modify, terminate or cancel a material insurance policy (or reinsurance policy) or self-insurance program of the Company in effect as of the date hereof, unless, simultaneous with such termination or cancellation, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing or self-insurance programs, in each case, providing coverage equal to or greater than the coverage under the terminated or canceled policies for substantially similar premiums, as applicable, are in full force and effect;
(xv) make any changes with respect to the Retained Businessaccounting policies or procedures, except as required by GAAP or by applicable Law;
(xvi) other than with respect to acquisitions of businessesTransaction Litigation, which is subject governed by Section 7.14(c), settle or compromise any Proceeding which would reasonably be expected to Section 5.01(b)(ix(A) prevent or materially delay or impair the consummation of the Mergers or the other transactions contemplated by this Agreement, (B) involve any material injunctive or equitable relief or impose material restrictions on the Company’s business, taken as a whole, or (C) involve any criminal liability or any admission of material wrongdoing or material wrongful conduct by the Company;
(xvii) (A) make, change or revoke any material Tax election, (B) enter into any settlement or compromise of any material Tax liability, (C) file any amended Tax Return with respect to any material Tax, (D) adopt or change any method of Tax accounting or Tax accounting period, (E) enter into any closing agreement relating to any material Tax, (F) agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax, (G) surrender any right to claim a material Tax refund or (H) fail to file when due (taking into account any applicable extensions) any material Tax Return required to be filed with respect to the Company in a jurisdiction where the Company currently files such Tax Returns;
(xviii) transfer, sell, lease, license, mortgage, surrender, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, rights, properties or businesses (including Intellectual Property Rights) with a fair market value in excess of $5,000,000, in the aggregate, except (A) for sales or other dispositions of obsolete assets, (B) for transfers, sales or other dispositions of inventory in the ordinary course of business consistent with past practice, (C) pursuant to Contracts in effect prior to the date hereof, (D) for non-exclusive licenses in the ordinary course of business or (E) for abandonments, non-renewals or non-extensions of Intellectual Property Rights that are not material to the conduct of the Company’s business as then conducted;
(xix) except as required pursuant to the terms of any Benefit Plan in effect as of the date hereof, or as adopted or amended following the date hereof in accordance with this Agreement, or in the ordinary course of business consistent with past practice (including approval from the Company Board or the compensation committee thereof, as applicable), (A) materially increase in any manner the compensation or consulting fees, bonus or pension or welfare benefits of any Company Employee, (B) materially reduce compensation or benefits with respect to any Company Employees, (C) grant any severance, termination, retention or change-in-control pay to any Company Employee, (D) become a party to, establish, adopt, materially amend, commence participation in or terminate any material Benefit Plan or any arrangement that would have been a material Benefit Plan had it been in existence as of the date hereof, (E) grant any new Company Equity Awards or amend or modify the terms of any outstanding Company Equity Awards, (F) take any action to accelerate the vesting, lapsing of restrictions or payment, or to fund or in any other way secure the payment, of compensation or benefits provided to any Company Employee or (G) forgive any loans or issue any loans to Company Employees;
(xx) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a trade union, labor union, works council or similar organization;
(xxi) materially amend any Privacy Policies or the operation or security of any IT Assets used in its business in any manner that is materially adverse to the Company, in each case other than as required by applicable Law;
(xxii) (A) enter into any new line of business other than any line of business in which the Company is engaged (or plans to be engaged) in as of the date of this Agreement or (B) form or acquire securities or ownership interests in a Person which would constitute its Subsidiary; or
(xxiii) agree, commit, arrange, authorize, resolve or enter into any understanding to do any of the foregoing.
(b) Parent covenants and agrees that, from the execution of this Agreement until the Effective Time (unless the Company shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)), and except (x) as otherwise expressly required, contemplated or permitted by this Agreement, (y) as set forth in Section 7.1(b) of the Parent Disclosure Letter or (z) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), Parent shall, and shall cause each of its Subsidiaries to, use its and their reasonable best efforts to conduct its business in the ordinary course of business consistent with past practice in all material respects and, to the extent consistent therewith, Parent shall, and shall cause each of its Subsidiaries to, use its and their reasonable best efforts to preserve its business organizations substantially intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, production companies, distributors, licensees, licensors, creditors, lessors, employees and business associates and others having material business dealings with it and keep available the services of its present employees and agents. Without limiting, and in furtherance of, the foregoing, from the execution of this Agreement until the Effective Time, except (1) as otherwise expressly required, contemplated or permitted by this Agreement, (2) as set forth in Section 7.1(b) of the Parent Disclosure Letter or (3) as required by applicable Laws (including any Law issued in response to the COVID-19 (or SARS-CoV-2) virus), Parent shall not, and shall cause each of its Subsidiaries not to (unless the Company shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)):
(i) adopt or propose any change in the certificate of incorporation or bylaws of Parent, Merger Sub or Merger Sub II;
(ii) merge or consolidate Parent, Merger Sub or Merger Sub II with any other Person, other than with respect any merger or consolidation of Parent in which Parent is the surviving Person;
(iii) completely or partially liquidate Parent, Merger Sub or Merger Sub II;
(iv) issue, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of Parent, securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to film and television production and programming (including sports rights) with third parties acquire any shares of such capital stock or video game productionsuch convertible or exchangeable securities, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures in each case other than (A) in connection with the repair or replacement issuance of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if equity awards under the portion of which that is not covered by insurance is less than $100,000,000) or (B) Parent Stock Plan in the ordinary course of business consistent with past practice and (B) the issuance of shares in the aggregate not in excess of 120% respect of the amounts reflected in the Company’s capital expenditure budget for each settlement of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) equity awards outstanding as of the Company Disclosure Letterdate hereof (or issued after the date hereof) in accordance with their terms and, as applicable, the Parent Stock Plan;
(v) 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;
(vi) with respect to the Retained Businessreclassify, transfersplit, leasecombine, licensesubdivide or redeem, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon purchase or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses acquire or ordinary course security interests in connection with the production or financing of film and television programming or video game productionoffer to redeem, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon repurchase or otherwise dispose of any properties acquire, directly or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance ofindirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable forfor any shares of its capital stock (other than the withholding of shares to satisfy withholding Tax obligations upon the exercise, vesting or settlement of equity awards outstanding as of the date hereof (or issued after the date hereof) under the Parent Stock Plan in accordance with their terms and, as applicable, the Parent Stock Plan); or
(vii) agree, commit, arrange, authorize, resolve or enter into any optionsunderstanding to do any of the foregoing.
(c) Subject to Section 7.2(f), warrants from the execution of this Agreement until the Effective Time, the Company shall not terminate, amend, modify or other rights waive any provision of any confidentiality agreement, Standstill Agreement or similar agreement to acquirewhich the Company is a party and shall use reasonable best efforts to enforce, to the fullest extent permitted under applicable Law, the provisions of any such sharesagreement, in each case except to the extent the Company Board or the Special Committee determines in good faith after consultation with its outside legal counsel that such action or failure to take such action would be inconsistent with the directors’ fiduciary duties under applicable Law.
(Ad) for any Shares issued pursuant Nothing contained in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the Company’s operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company Restricted Stock Unitsshall exercise, Company Performance Stock Units consistent with the terms and Company Deferred Stock Units outstanding on conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations, if any.
(e) From the date of this Agreement until the earlier to occur of the Effective Time and the termination of this Agreement in accordance with the existing terms of such awards and the Company Stock Plansset forth in Article IX, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor Parent shall, and neither the Company nor Parent shall permit any of its Retained Subsidiaries shall enter into any such transaction that wouldto, take, or agree or commit to take, any action (except as otherwise expressly permitted by Section 7.2 or Section 7.3 of this Agreement), including proposing or undertaking any merger, consolidation or acquisition, in each case, that would reasonably be expected to, preventindividually or in the aggregate, prevent or materially delay or materially impair the consummation of the Transactions;
(x) Mergers and the other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includintransactions contemplated by this Agreement.
Appears in 2 contracts
Sources: Merger Agreement (BridgeBio Pharma, Inc.), Merger Agreement (BridgeBio Pharma, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, ) and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution Laws or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed provided for in Section 5.01(a) this Agreement, each of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use shall conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course of business consistent with past practice, practice and the Company shall, and it shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ intact its business organization intact and maintain the Retained Business’ existing relations and goodwill relationships with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) third parties and keep available the services of the Company its present officers and its Subsidiaries’ present employees and agents.
(b) employees. Without limiting the generality of, and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly permitted by this Agreement, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(ia) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate articles of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by applicable governing instruments;
(b) merge or consolidate the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than transactions in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary capital stock of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongor any its Subsidiaries, or the restructuringsecurities convertible or exchangeable into or exercisable for any shares of such capital stock, reorganization or liquidation ofany options, warrants or other rights of any wholly owned Subsidiaries kind to acquire any shares of the Company that would not prevent, materially delay such capital stock or materially impair the Transactions)such convertible or exchangeable securities;
(iiid) except as expressly required by materially and adversely modify, terminate or renew any Company Plan as Material Contract or any Contract that would be a Material Contract if in effect existence on the date hereof: , (Ai) establishexcept in the ordinary course of business, adoptor (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, amend or terminate result in any material Company Plan violation or amend the terms breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any outstanding equity-based awards obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) 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 the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such action taken capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for purposes any shares of replacingsuch capital stock, renewing except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or extending a broadly applicable material guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company Plan or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice that does and not materially increase to exceed $250,000 of notional debt in the cost aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company Plan or benefits provided under such Company Plan based on its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the cost on ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date hereofof this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (Bi) grant or provide any transaction severance or retention bonuses termination payments or benefits to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (Diii) increase establish, adopt, amend or terminate any Benefit Plan or amend the severance or termination payments or benefits payable to terms of any director, officer, employee or other service provider of the Company or any of its Subsidiariesoutstanding equity-based awards, (Eiv) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including Benefit Plan, to the extent not already provided in any equity-based awards)such Benefit Plan, (Fv) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP; or (Gvi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(ivp) incur take any Indebtedness action or issue omit to take any warrants or other rights action that is reasonably likely to acquire result in any Indebtedness, except (A) in of the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial conditions to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the date of the Contract evidencing such Indebtedness, CIA;
(Br) except with respect to the Bridge Facility, in replacement of, knowingly take or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or permit any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have take any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which action that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect reasonably likely to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair prevent the consummation of the Transactions;Merger; or
(xs) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses agree, authorize or commit to do any of film and television and production programming (includinthe foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Encore Medical Corp), Merger Agreement (Compex Technologies Inc)
Interim Operations. Except as set forth in the ▇▇▇▇▇▇▇ Disclosure Letter, in the case of ▇▇▇▇▇▇▇, the Cardiac Disclosure Letter, in the case of Cardiac, or as otherwise expressly contemplated hereby, without the prior consent of the other party (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval consent shall not be unreasonably withheld, conditioned withheld or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), from the Company date hereof until the Effective Time, ▇▇▇▇▇▇▇ and Cardiac shall, and shall cause each of its their respective Subsidiaries to, use its reasonable best efforts to conduct the Retained Business their business in all material respects in the ordinary course of business consistent with past practice, and the Company shall, practice and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to (i) preserve intact its present business organization, (ii) maintain in effect all material licenses, approvals and authorizations, including, without limitation, all material licenses and permits that are required by applicable Laws for the Retained Business’ organization intact operation of its business and maintain the Retained Business’ (iii) preserve existing relations relationships with its key employees, its key agents, and goodwill with Governmental Entities, its material customers, supplierslenders, distributors, licensors, creditors, lessors, employees and business associates suppliers and others having material business dealings relationships with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) it. Without limiting the generality of, and in furtherance of, of the foregoing, except as set forth in the Company covenants and agrees ▇▇▇▇▇▇▇ Disclosure Letter, in the case of ▇▇▇▇▇▇▇, or the Cardiac Disclosure Letter, in the case of Cardiac, or as to itself and its Subsidiaries thatotherwise expressly contemplated by this Agreement, from and after the date of this Agreement and hereof until the Effective Time, without the prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) consent of the Company Disclosure Letter)other party, the Company neither ▇▇▇▇▇▇▇ nor Cardiac shall, nor shall not and shall not either permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (Aa) amend its certificate of incorporation or bylaws (or comparable similar governing documents);
(b) (other than amendments take any action that would prevent or materially impair the ability of it to consummate the transactions contemplated by this Agreement, including actions that would be reasonably likely to prevent or materially impair its ability to obtain any consent, registration, approval, permit or authorization required to be obtained from any Governmental Entity prior to the governing documents Effective Time in connection with the execution and delivery of any Subsidiary this Agreement and the consummation of the Company that would not prevent, delay or impair the Initial Merger or Mergers and the other Transactions), transactions contemplated by this Agreement;
(Bc) split, combine, subdivide combine or reclassify its outstanding any shares of its capital stock (except for or any such transaction by a wholly of its Subsidiaries which are not wholly-owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) or declare, set aside or pay any dividend or other distribution payable (whether in cash, stock or property (or any combination thereof) in respect of its capital stock or any securities of any of its Subsidiaries which are not wholly-owned, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of any of its Subsidiaries which are not wholly-owned;
(d) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of its capital stock (except for (1) of any dividends class or distributions paid by a direct any securities convertible into or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stockexercisable for, or (E) purchaseany rights, repurchasewarrants or options to acquire, redeem or otherwise acquire any shares of its such capital stock or any securities such convertible or exchangeable into or exercisable for any shares of its capital stock (securities, other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establishthe issuance of ▇▇▇▇▇▇▇ Common Shares or Cardiac Common Shares, adoptas the case may be, amend or terminate any material Company Plan or amend upon the terms exercise of any stock options outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider the issuance of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except stock options in the ordinary course of business consistent to purchase up to 75,000 ▇▇▇▇▇▇▇ Common Shares or 350,000 Cardiac Common Shares, as the case may be, pursuant to the ▇▇▇▇▇▇▇ Stock Plans or Cardiac Stock Plan, as the case may be, in accordance with past practice with respect their present terms except that no such stock options shall be issued to (1) employees below the level any executive officer of Executive Vice President ▇▇▇▇▇▇▇ or Cardiac; and (2C) employees at or above the level issuance of Executive Vice President in respect of increases of less than 7.5% of compensation relative ▇▇▇▇▇▇▇ Common Shares pursuant to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries▇▇▇▇▇▇▇ ESPP;
(ive) other than expenses incurred in connection with this transaction such as reasonable legal and accounting expenses, and investment banking expenses, incur any Indebtedness capital expenditures or issue any warrants obligations or other rights to acquire any Indebtednessliabilities in respect thereof, except for those (Ai) contemplated by its capital expenditure budget, (ii) incurred in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement ofbusiness, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and (iii) not otherwise described in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, clauses (Ci) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, and/or (Dii) (1) to the extent not drawn upon and payments which are not triggered therebyin excess of an aggregate of $100,000;
(f) acquire (whether pursuant to merger, letters stock or asset purchase or otherwise) in one transaction or series of creditrelated transactions any assets of or equity interests in any Person;
(g) sell, bank guaranteeslease, security license, encumber or performance bonds or similar credit support instruments and otherwise dispose of any assets (2including, without limitation, intellectual property rights), other than (i) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (Eii) commercial paper issued equipment and property no longer used in the operation of its business, and (iii) sales or other dispositions of assets related to discontinued operations;
(h) incur any indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities or warrants or rights to acquire any debt securities or guarantee any debt securities of others or request any advances in respect of, or make any drawdowns on, any existing indebtedness which advance or drawdown (together with other advances or drawdowns made after the date of this Agreement) exceeds $100,000 in the aggregate;
(i) enter into, amend, modify or terminate any material contract, agreement or arrangement or otherwise waive, release or assign any material rights, claims or benefits thereunder, except in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, business;
(Fi) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing except in the ordinary course of business consistent with past practice, or as required by Law or by an agreement existing on the date hereof, increase the amount of compensation of any director or executive officer or make any increase in or commitment to increase any employee benefits, (ii) except as required by Law or by an agreement existing on the date hereof, adopt any severance program or grant any material severance or termination pay to any director, officer or employee, (iii) adopt or implement any employee retention program or other incentive arrangement not in existence on the date hereof or amend in any material respect such program or arrangement, (iv) adopt any additional employee benefit plan or, except in the ordinary course of business, make any material contribution to any existing plan (other than as required by Law or such plan), or (v) except as may be required by Law or pursuant to any agreement existing on the date hereof, amend in any material respect any ▇▇▇▇▇▇▇ Employee Plan or Cardiac Employee Plan, as the case may be;
(vk) with respect to change its (x) methods of accounting in effect at December 31, 2004, except as required by changes in GAAP or by Regulation S-X of the Retained BusinessExchange Act, as concurred in by its independent public accountants or (y) fiscal year;
(l) other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and practice, make any Tax election or enter into any settlement or compromise of any Tax liability that in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Lettereither case is material to its business;
(vim) with respect to the Retained Businesspay, transferdischarge, leasesettle or satisfy any claim, licenseliability or obligation (absolute, sellaccrued, assignasserted or unasserted, let lapsecontingent or otherwise) other than (y) for an amount of $100,000 or less, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (Az) ordinary course non-exclusive licenses repayment of indebtedness or ordinary course security interests in connection with the production or financing payment of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreementscontractual obligations when due;
(viin) commence any Action other than in accordance with respect past practice, or settle or propose to the Retained Businesssettle, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien any Action for material money damages or restrictions upon or otherwise dispose of its operations;
(o) take any properties or assets (including capital stock of action that would cause any of its Retained Subsidiaries but not including representations and warranties herein to become untrue in any Intellectual Propertymaterial respect; and
(p) agree, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses resolve or other dispositions of otherwise commit to do any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Cardiac Science Inc), Merger Agreement (Quinton Cardiology Systems Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time Time, except as expressly contemplated or permitted by this Agreement or required by applicable Law or with the prior written approval of Parent (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned delayed or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letterconditioned), the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course. To the extent consistent with the foregoing and except as otherwise consented to by Parent (which consent shall not be unreasonably withheld, delayed or conditioned), the Company and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having other Persons with whom the Company or its Subsidiaries has a material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) relationship. Without limiting the generality of, and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and until the Effective Time, except (w) as otherwise expressly contemplated or permitted by this Agreement, (x) with the prior written approval of Parent (not to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned delayed or delayedconditioned), and which determination shall take into account the Company Overview Presentation, and except (y) as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Law or (3z) otherwise expressly disclosed as set forth in Section 5.01(b5.1(a) of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws by-laws or other applicable governing instruments;
(ii) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person;
(iii) make any acquisition (whether by merger, consolidation, or acquisition of stock or assets) of any interest in any Person or any division or assets thereof other than (A) acquisitions in the ordinary course of business with a value or purchase price in the aggregate not in excess of $2,000,000 in any transaction or series of related transactions, or (B) acquisitions pursuant to Contracts in effect as of the date of this Agreement, true and complete copies of which have been made available to Parent;
(iv) issue, sell, pledge, grant, transfer, encumber or otherwise dispose of any shares of capital stock of the Company or any of its Subsidiaries, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of the Company or any of its Subsidiaries (other than amendments (A) the issuance of shares of Class A Common Stock upon the settlement of Company Options or Company Restricted Stock Awards, (B) in satisfaction of obligations pursuant to Contracts or Plans existing as of the governing documents of any date hereof, (C) by a wholly-owned Subsidiary of the Company that would not prevent, delay to the Company or impair another wholly-owned Subsidiary of the Initial Merger or the other Transactions)Company, (BD) the issuance of equity awards permitted by clause (xii) below or (E) the issuance of shares of Class A Common Stock pursuant to the terms of an ESPP offering permitted under Section 2.8(c));
(v) make any loans, advances (other than pursuant to Government Contracts in the ordinary course of business) or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $2,000,000 in the aggregate;
(vi) declare, set aside, establish a record date for, make or pay any dividend or other distribution (whether payable in cash, stock, property or otherwise) with respect to any of its capital stock (except dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary);
(vii) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)redeem, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant the acquisition of any shares of Class A Common Stock tendered by current or former employees or directors in order to pay Taxes in connection with the forfeiture of, settlement of Company Options or withholding of Taxes with respect to, Company Restricted Stock Units, Awards and other than in connection with a customary cashless exercise of Company Deferred Stock Units Options);
(viii) incur or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (enter into any agreement to incur any indebtedness for borrowed money or as modified after the date of this Agreement in accordance with the terms of this Agreement) issue or (2) purchases, repurchases, redemptions sell any debt securities or other acquisitions of warrants or rights to acquire any debt securities of any wholly owned Subsidiary of the Company by the Company or any of its Subsidiaries or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person (other wholly than the Company or any direct or indirect wholly-owned Subsidiary of the Company)) for borrowed money, except to fund operations in the event the U.S. Congress allows for a lapse in federal agencies’ authority to appropriate funds or curtails funding for nonessential activities in certain federal agencies or departments under the Company’s existing revolving credit facility in an aggregate amount not to exceed the maximum amount authorized under that agreement at any time to be outstanding;
(iiix) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate except (other than transactions of the type contemplated by A) as set forth in Section 5.01(b)(vii5.1(a)(ix) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongDisclosure Schedule, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iiiB) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice or (C) for expenditures related to operational emergencies, make or authorize any capital expenditure in excess of $2,000,000 in the aggregate;
(x) settle or compromise any litigation, claim or other proceeding against the Company or any of its Subsidiaries other than settlements or compromises where the amounts paid by the Company or any of its Subsidiaries in settlement or compromise do not exceed $2,000,000, in the aggregate; provided that does the foregoing shall not materially increase permit the cost Company or any of such Company Plan its Subsidiaries to settle any litigation, claim or benefits provided under such Company Plan based other proceeding that would impose material restrictions or changes on the cost on business or operations of the date hereofCompany or any of its Subsidiaries;
(xi) transfer, sell, lease, license, mortgage, pledge, surrender, abandon or allow to lapse or expire or otherwise dispose of, or grant any Lien other than any Permitted Lien on, any material amount of assets, rights (including Intellectual Property), properties, product lines or businesses of the Company or its Subsidiaries, other than (A) in the ordinary course of business, (B) pursuant to Contracts existing as of the date hereof or (C) transactions solely among the Company and/or its wholly-owned Subsidiaries;
(xii) except to satisfy contractual obligations pursuant to Contracts, or as required under Plans existing as of the date hereof or as set forth in Section 5.1(a)(xii) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (A) grant, pay or commit to grant or provide pay any transaction material severance or retention bonuses termination pay, (B) enter into any Plan with any director or executive officer of the Company, (C) adopt any new employee benefit plan or arrangement or amend, modify or terminate any existing Plan or ERISA Plan in a manner that materially increases the cost associated with such Plan or ERISA Plan, (D) make any new equity awards to any current or former director, executive officer, employee or other service provider consultant of the Company or any of its Subsidiaries, (CE) otherwise increase the compensation, bonus or pension, welfare commit to increase any compensation or other employee benefits of payable to any director, officer or employee of the Company or any of its Subsidiaries, except Subsidiaries or (F) fund or in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination any way secure any payments or benefits payable to under any directorPlan;
(xiii) adopt or enter into a plan or agreement of complete or partial liquidation, officerdissolution, employee merger, consolidation or other service provider reorganization of the Company or any of its Subsidiaries, Subsidiaries (E) take any action to accelerate other than the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awardsMerger), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(ivA) incur modify, amend or terminate any Indebtedness or issue any warrants or Material Contract other rights to acquire any Indebtedness, except than (A1) in the ordinary course of business consistent with past practice in a principal amount not or (2) modifications or amendments which are immaterial, or (B) enter into any new Contract or agreement that, if entered into prior to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednessthis Agreement, (Bwould have been required to be listed in Section 3.15(a) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to of the Company and its Subsidiaries, taken Disclosure Schedule as a whole, Material Contract other than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice (it being understood that the foregoing exception to this clause (B) shall not permit the entry into any Contract with an Affiliate or a “related person” (as such term is defined in item 404(a) of Regulation S-K under the Exchange Act));
(xv) except as may be required by a change in GAAP or applicable Law, make any material change in its financial accounting principles, policies, or practices;
(A) make any Tax election or take any position on a Tax Return filed on or after the date of this Agreement or adopt any method therein that is inconsistent with elections made, positions taken or methods used in preparing or filing similar returns in prior periods unless such position, election or method is pursuant to applicable Law or the Code, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return that would result in a principal amount not change in Tax liability, taxable income or loss, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to exceed $250,000,000 in the aggregate at any time outstandingTax liability, or (F) Indebtednessgive or request any waiver of a statute of limitation with respect to any Tax Return, the proceeds of which will be used to finance all provided, that such election, settlement, amended Tax Return or any other action described in the foregoing portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (FSection 5.1(a)(xvi) shall not exceed $9,000,000,000; providedrequire prior written consent of Parent if all such actions, furtherin the aggregate, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect would not reasonably be expected to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations result in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial cost to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;500,000; or
(viiixvii) except with respect to SpinCo and the SpinCo Subsidiariesagree, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of foregoing.
(b) Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the agreement for such acquisition); provided that neither right to control or direct the Company nor Company’s or any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair Subsidiaries’ operations prior to the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinEffective Time.
Appears in 2 contracts
Sources: Merger Agreement (Providence Equity Partners VI L P), Merger Agreement (Sra International Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, during the period from and after the execution date of this Agreement and prior through the earlier of the Closing or the date of termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law), (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a4.1(a) of the Company Disclosure Letter, (3) as required by applicable Legal Requirements (including any applicable Covid-19 Measures that are Legal Requirements) or (4) as expressly required by this Agreement (including any action permitted by Section 4.21), the Company shall, and shall cause each of its the Company Subsidiaries to, use conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course of business in all material respects and in a manner consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable best efforts to maintain and preserve intact its business organization, keep available the Retained Business’ organization intact and services of key employees, maintain the Retained Business’ existing relations and goodwill satisfactory relationships with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees distributors and business associates other commercial counterparties and others having maintain its material business dealings with the Retained Business assets and properties in their current condition (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers normal wear and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) tear excepted). Without limiting the generality of, and in furtherance of, the foregoing, during the Company covenants and agrees as to itself and its Subsidiaries that, period from and after the date of this Agreement and prior through the earlier of the Closing or the date of termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law), (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed as set forth in Section 5.01(b4.1(a) of the Company Disclosure Letter), (3) as required by applicable Legal Requirements or (4) as expressly required by this Agreement, the Company shall not (and shall not permit any of its Subsidiaries Company Subsidiary to:):
(i) amend the Company’s Organizational Documents or the Organizational Documents of any Company Subsidiary (except for immaterial amendments to the Organizational Documents of any Company Subsidiary which would not reasonably be expected to materially delay or prevent the consummation of the Closing or would reasonably be expected to adversely impact Parent and the Parent Subsidiaries);
(ii) split, combine, subdivide, amend the terms of or reclassify any shares of the Company’s capital stock or the capital stock of any Company Subsidiary (other than any wholly owned Company Subsidiary) (or any securities convertible into any of the foregoing);
(iii) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) with respect to SpinCo and any shares of the SpinCo Subsidiaries Company’s capital stock or the capital stock of any Company Subsidiary, except for dividends or other distributions paid by any wholly owned Company Subsidiary to the Company or another wholly owned Company Subsidiary;
(iv) (A) form any Subsidiary that would constitute a Company Subsidiary, (B) make any capital contributions to, or investments in, any other Person (including any officer, director, Affiliate, agent or consultant of the Company or any Company Subsidiary) other than to wholly owned Company Subsidiaries that are not H▇▇▇▇▇ Satellite Systems Corporation or any “Restricted Subsidiary” under the Secured Indenture or the Unsecured Indenture or (C) acquire (by merger, consolidation, acquisition of stock or assets, formation of a joint venture or otherwise) (1) any other Person, (2) any equity interest in any other Person, (3) any business, or (4) any assets, except, in the case of clause (A)C), (A) amend its certificate of incorporation in one or bylaws (more transactions with respect to which the aggregate consideration for all such transactions does not exceed $5,000,000 and which would not reasonably be expected to materially delay or comparable governing documents) (other than amendments to prevent the governing documents of any Subsidiary consummation of the Company that would not preventClosing;
(v) issue, delay sell, grant or impair the Initial Merger otherwise permit to become outstanding any additional shares of, or the other Transactions)securities convertible or exchangeable for, (B) splitor options, combinewarrants or rights to acquire, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock or the capital stock of any Company Subsidiary, other than: (except for (1A) any dividends or distributions paid by shares of capital stock of a direct or indirect wholly owned Subsidiary of the Company issued to either the Company or another direct wholly owned Subsidiary of the Company; (B) shares of Company Common Stock issuable upon exercise of Company Options or indirect the vesting of Company RSU Awards outstanding on the date of this Agreement; (C) pursuant to the Company ESPP in accordance with the terms of this Agreement; and (D) shares of Company Class A Common Stock issuable upon conversion from other classes of Company Common Stock in accordance with the Company Articles.
(vi) except in a transaction solely between the Company and any wholly owned Subsidiary of the Company or solely among any wholly owned Subsidiaries of the Company, sell, assign, transfer, lease or license to any third party, or encumber (other than Company Permitted Encumbrances), or otherwise dispose of, any Company IP or any material assets of the Company Company, other than: (A) sales of inventory or of obsolete assets in the ordinary course of business; (2B) normal semiannual cash dividends pursuant to written Contracts or commitments existing as of the date of this Agreement and set forth on the Common Stock as described in Section 5.01(b)(i4.1(a)(vi) of the Company Disclosure Letter), ; (C) non-exclusive licenses of Company IP granted in the ordinary course of business; or (D) enter into disposals of any agreement with respect immaterial Company Registered IP resulting from a cancellation, abandonment or failure to renew any immaterial Company Registered IP in the voting ordinary course of its capital stock, business;
(vii) directly or (E) purchase, indirectly repurchase, redeem or otherwise acquire any shares of its the Company’s capital stock stock, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable into or exercisable for any shares of its the Company’s capital stock stock, except: (other than (1A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the forfeiture ofexercise of repurchase rights binding on the Company and existing prior to the date of this Agreement; or (B) shares of Company Common Stock accepted as payment for the exercise price of Company Options outstanding on the date of this Agreement pursuant to the applicable Company Equity Plan or for withholding Taxes incurred in connection with the exercise, vesting or withholding settlement of Taxes with respect toCompany Options and Company RSU Awards outstanding on the date of this Agreement, Company Restricted Stock Unitsas applicable, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement applicable award;
(viii) (A) incur any indebtedness for borrowed money, guarantee any such indebtedness, issue or as modified after the date of this Agreement in accordance with the terms of this Agreementsell any debt securities or rights to acquire any debt securities (directly, contingently or otherwise) or make any loans or advances to any other person; (2B) purchasesincur any Lien on any of its material property or assets, repurchasesexcept for Company Permitted Encumbrances; or (C) enter into any transactions that amend or otherwise alter available capacity under Section 4.7 of either the Unsecured Indenture or the Secured Indenture;
(ix) (A) adopt, redemptions terminate or materially amend any Company Plan or any collective bargaining or other acquisitions of securities labor agreement, (B) increase, or accelerate the vesting or payment of, the compensation or benefits of any wholly owned Subsidiary director, independent contractor or employee of the Company by the Company or any Company Subsidiary, other wholly owned Subsidiary of than, (1) in the Company);
(ii) merge or consolidate with event the Closing has not occurred by March 1, 2024, increases in base salary to any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which such individuals who are not restricted thereby and other than mergers directors or consolidations of a Subsidiary officers of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan Subsidiary in the ordinary course of business consistent with past practice that does do not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except exceed 5% in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President aggregate and (2) employees at or above the level of Executive Vice President increases in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, connection with promotions permitted under clause (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (C) grant any rights to severance, retention, change in control or termination pay to any director, independent contractor or employee of the Company or any Company Subsidiary, (D) hire or promote any employee to a position with the Company or any Company Subsidiary with an annual rate of base salary in excess of $300,000 or a title of Senior Vice President or higher, or (E) commercial paper issued terminate the employment of any employee of the Company or any Company Subsidiary with an annual rate of base salary in excess of $300,000 or a title of Senior Vice President or higher (other than for cause), except for: (1) amendments to Company Plans determined by the Company in good faith to be required to comply with applicable Legal Requirements; and (2) increases required pursuant to any Company Plan as in effect on the date of this Agreement;
(x) other than in the ordinary course of business consistent with past practice in a principal amount not (A) amend, supplement or otherwise modify or terminate any Material Contracts or waive, release or assign any material rights under any Material Contracts (except for (1) terminations pursuant to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion expiration of the Dividend existing term of any Material Contract and (and fees and expenses in connection therewith2) or for general corporate purposes; provided that extensions at the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations option of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness Company Subsidiary under the Bridge Facility, refinancings or replacements terms thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing exercised in the ordinary course of business consistent with past practice), or (B) enter into any Contract that, if in effect on the date of this Agreement, would constitute a Material Contract;
(vxi) change any of its methods of financial accounting or accounting practices in any material respect other than as required by changes in GAAP;
(xii) (A) make, change or revoke any material Tax election, (B) change or adopt any Tax accounting period or material method of Tax accounting, (C) amend any material Company Return, (D) settle or compromise any liability for material Taxes or any Tax audit, claim, or other proceeding relating to any material Taxes, (E) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar state, local or non-U.S. Legal Requirement), (F) request any Tax ruling from any Governmental Entity, (G) surrender any right to claim a refund of material Taxes or (H) extend or waive (other than automatically granted extensions and waivers) of the statute of limitations with respect to a material amount of Taxes;
(xiii) make any capital expenditure that is not contemplated by the capital expenditure budget set forth in Section 4.1(a)(xiii) of the Company Disclosure Letter (a “Company Non-Budgeted Capital Expenditure”), except that the Company or any Subsidiary of the Company may make any Company Non-Budgeted Capital Expenditure that, when added to all other Company Non-Budgeted Capital Expenditures made by the Company and the Company Subsidiaries since the date of this Agreement, would not exceed $5,000,000, individually, or $10,000,000, in the aggregate;
(xiv) convene any annual or special meeting (or any adjournment or postponement thereof) of the Company’s stockholders;
(xv) enter into any agreement, understanding or arrangement with respect to the Retained Businesssale or voting of its capital stock or other equity interests;
(xvi) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(xvii) commence, settle or compromise any litigation, claim, suit, action, proceeding or other Legal Proceeding, except for settlements or compromises that (A) involve solely monetary remedies and, in the case of settlements involving the payment of money by the Company or the Company Subsidiaries, have a value not in excess of $5,000,000 in the aggregate, (B) do not impose any material restriction on the Company’s business or the business of the Company Subsidiaries, (C) do not relate to any litigation, claim, suit, action, proceeding or other Legal Proceeding by the Company’s stockholders in connection with this Agreement or the Merger and (D) do not include an admission of liability or fault on the part of the Company or any Company Subsidiary;
(xviii) materially reduce the amount of insurance coverage or fail to renew or maintain any material existing insurance policies;
(xix) amend, terminate or allow to lapse any Company Permits in a manner that adversely impacts the Company’s ability to conduct its business in any material respect;
(xx) (A) fail to pay any issuance, renewal, maintenance and other payments that become due with respect to the Company Registered IP or otherwise abandon, cancel, or permit to lapse any material Company IP or agreements pursuant to which the Company or any Company Subsidiary licenses or obtains the right to use any Intellectual Property, other than with respect to acquisitions any abandonment of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties any Company Registered IP at the end of the applicable statutory term or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) otherwise in the ordinary course of business consistent with past practice and practice, or (B) disclose to any third party any Trade Secret included in the aggregate not Company IP, other than pursuant to a non-disclosure agreement restricting the disclosure and use of such Trade Secret, or in excess connection with any regulatory filing or any publication of 120% any patent application;
(xxi) except in the ordinary course of business, enter into any Contract under which the Company or any Company Subsidiary grants or agrees to grant any right, or agrees to pay any royalties or similar obligations, with respect to any Intellectual Property;
(xxii) enter into any material new line of business or line of business of any kind competitive with Parent and the Parent Subsidiaries;
(xxiii) take any action, or knowingly fail to take any action, which action or failure to act could be reasonably expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the amounts reflected Code; or
(xxiv) authorize, enter into any Contract or make any commitment to do any of the foregoing.
(b) P▇▇▇▇▇ agrees that, during the period from the date of this Agreement through the earlier of the Closing or the date of termination of this Agreement, except (1) to the extent the Company shall otherwise give its prior consent in the Company’s capital expenditure budget for each of 2017writing (such consent not to be unreasonably withheld, 2018 and 2019 conditioned or delayed), (2) as set forth in Section 5.01(b)(v4.1(b) of the Company Parent Disclosure Letter;
, (vi3) with respect to as required by applicable Legal Requirements (including any applicable Covid-19 Measures that are Legal Requirements) or (4) as expressly required by this Agreement (including the Retained BusinessLLC Conversion or any other action permitted by Section 4.12 or Section 4.21), transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonmentParent shall, and cancellationsshall cause the Parent Subsidiaries to, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not conduct its business in the ordinary course in all material respects and in a manner consistent with past practice, and use reasonable best efforts to maintain and preserve intact its business organization, maintain satisfactory relationships with Governmental Entities, customers, suppliers, distributors and other commercial counterparties and maintain its material assets and properties in their current condition (normal wear and tear excepted). Without limiting the foregoing, during the period from the date of this Agreement through the earlier of the Closing or $75,000,000 individually in any event the date of termination of this Agreement, except (other than transactions among 1) to the extent the Company and shall otherwise give its wholly owned Retained Subsidiariesprior consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), (D2) licensesas set forth in Section 4.1(b) of the Parent Disclosure Letter, sales(3) as required by applicable Legal Requirements or (4) as expressly required by this Agreement, letting lapse, abandonment Parent shall not (and cancellations shall not permit any Parent Subsidiary to):
(i) amend Parent’s Organizational Documents in any manner which would reasonably be expected to materially delay or prevent the consummation of Intellectual Property that is used the Closing or held for use exclusively would be adverse in any material respect to the SpinCo Business and (E) Affiliation Agreementsholders of Company Class A Common Stock relative to holders of Parent Class A Common Stock;
(viiii) with respect to split, combine, subdivide, amend the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon terms of or otherwise dispose reclassify any shares of any properties the Parent’s capital stock or assets (including the capital stock of any of its Retained Subsidiaries but not including Parent Subsidiary (other than any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for wholly owned Parent Subsidiary) (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible into or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viiiforegoing);
(ixiii) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) with respect to any shares of Parent’s capital stock or the Retained Businesscapital stock of any Parent Subsidiary, except for dividends or other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect distributions paid by any wholly owned Parent Subsidiary to film and television production and programming Parent or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactionsanother wholly owned Parent Subsidiary;
(xiv) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses directly or indirectly repurchase, redeem or otherwise acquire any shares of film and television and production programming Parent Common Stock (includinexcluding, for clarity, securities convertible
Appears in 2 contracts
Sources: Merger Agreement (EchoStar CORP), Merger Agreement (DISH Network CORP)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, writing (which such approval shall not be unreasonably withheld, conditioned or delayed), and except (i) as otherwise expressly contemplated by this Agreement), (1ii) as required by applicable Law, Laws and (2iii) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a6.1(a) of the Company Disclosure Letter), the business of the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct taken as a whole (the Retained Business “Business”) shall be conducted in the ordinary and usual course of business consistent with past practicepractice in all material respects and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their collective business organizations intact, maintain their material Licenses that are integral to the Retained Business, subject operation of the Business as currently conducted and keep available the services of its and its Subsidiaries’ present employees and agents who are integral to compliance with the specific matters set forth below, operation of the Businesses as currently conducted and use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ maintain, in all material respects, existing relations and goodwill with Governmental Entities, customers, suppliers, distributorsdistributors and employees whom, licensorsin the reasonable discretion of the Company, creditors, lessors, employees and business associates and others having material business dealings are currently engaged in relationships with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available Company and/or its Subsidiaries that are integral to the services operation of the Business as currently conducted; provided, however, that any action which the Company and and/or its Subsidiaries’ present employees and agentsSubsidiaries is permitted to take pursuant to Section 6.1(b) in accordance with the terms thereof shall not be deemed to be a breach of this Section 6.1(a).
(b) Without limiting In furtherance of the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatforegoing Section 6.1(a), from and after the date of hereof until the Effective Time, except (A) as otherwise expressly contemplated by this Agreement and prior to the First Effective Time Agreement, (unless B) as required by applicable Law, (C) as Parent shall otherwise may approve in writing, writing (which such approval shall not be unreasonably withheld, conditioned or delayed), and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b6.1(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (by-laws or comparable governing documents) (similar organizational documents other than amendments any administrative or ministerial changes made to the governing any certificate of incorporation or by-laws or similar organizational documents of any Subsidiary of the Company that which is not otherwise restricted under any other clause of this Section 6.1(b);
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or liquidate all or a material part of its assets;
(iii) acquire assets outside of the ordinary course of business from any other Person, other than (i) acquisitions pursuant to Contracts in effect as of the date hereof and related to matters described in Section 6.1(a)(iii) of the Company Disclosure Letter and (ii) acquisitions pursuant to which the total value or purchase price paid or payable by the Company and its Subsidiaries would not preventexceed $2,000,000, delay individually or impair in the Initial Merger aggregate;
(iv) issue, deliver, sell, pledge, dispose of, grant, transfer, encumber, or authorize the other Transactions)issuance, (B) splitdelivery, combinesale, subdivide pledge, disposition, grant, transfer, or reclassify its outstanding encumbrance of, any shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains or any of its Subsidiaries (other than the issuance of shares by a wholly wholly-owned Subsidiary after consummation of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such transactioncapital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, except for the issuance of Shares in respect of Company Options, Company RSUs and/or the Company Warrant outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement;
(v) make any loans or advances to any Person (other than advances made in the ordinary course of business consistent with past practice to employees of the Company and its Subsidiaries for reimbursement of expenses, including relocation expenses, in amounts not to exceed $250,000 individually or $2,000,000 in the aggregate for all such advances) or any capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company), ;
(Cvi) (A) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary), (B) purchase, redeem or otherwise acquire any shares of capital stock or other securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other securities or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other securities, except for (i) any split, combination or reclassification of capital stock of any wholly-owned Subsidiary of the Company, or any issuance of any securities of a wholly-owned Subsidiary of the Company to the Company or another direct or indirect wholly wholly-owned Subsidiary of the Company Company, (ii) purchases, redemptions or to other acquisitions of capital stock or other securities (y) permitted by the terms of the Stock Plans or (z) permitted by the terms of any plans, arrangements or Contracts existing on the date of this Agreement (or entered into after the date of this Agreement in compliance with this Section 6.1) between the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) any of its Subsidiaries and any director or employee of the Company Disclosure Letter)or any of its Subsidiaries, or (Diii) the issuance of Shares in respect of Company Options, Company RSUs and/or the Company Warrant outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement, or (C) enter into any agreement with respect to the voting of its capital stock;
(vii) incur any indebtedness for borrowed money, assume, guarantee, endorse or otherwise become responsible for any indebtedness of another Person, issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, enter into any “keep well” or other Contract to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing that, individually or in the aggregate, exceeds $5,000,000;
(viii) make or authorize any payment of, or accrual or commitment for, any capital expenditure in excess of $4,000,000 in the aggregate;
(Eix) purchase, repurchase, redeem or otherwise acquire enter into (A) any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock Contract that would have been a Material Contract (other than any Contract described in clause (1D) pursuant of Section 5.1(l)(i)) had it been entered into prior to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2B) purchasesany Company Intellectual Property Agreement, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions (in the case of the type contemplated by Section 5.01(b)(viiclause (B) or Section 5.01(b)(ixonly) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase practice;
(x) make any changes with respect to accounting policies or procedures, except to the cost extent required by GAAP or SEC rules and regulations;
(xi) settle or compromise, or offer or propose to settle or compromise, any actions, suits, claims, hearings, arbitrations, litigations, investigations or other proceedings before a Governmental Entity (each a “Proceeding”) if the foregoing would (A) require the payment of monetary damages by the Company or any of its Subsidiaries after the date hereof of any amount in excess of $1,000,000 per Proceeding or $5,000,000, in the aggregate, for all such Proceedings, net of applicable reserves as set forth in the consolidated balance sheet of the Company Plan as of September 30, 2012 and any applicable insurance coverage, or benefits provided under such Company Plan based (B) involve any injunctive or other non-monetary relief which, in either case, imposes material restrictions on the cost on business operations of the date hereofCompany and its Subsidiaries, taken as a whole;
(xii) (A) make, change or rescind any material Tax election, (B) grant or provide file any transaction or retention bonuses to any director, officer, employee or other service provider material amended Tax Return of the Company or any of its the Subsidiaries, (C) increase adopt or change any material method or period of Tax accounting, (D) settle or compromise any material Tax claim, (E) surrender any material claim for a refund of Taxes, (F) enter into any closing agreement relating to Taxes, (G) file any material Tax Return that is inconsistent with past practice, or (H) consent to any extension or waiver of the compensationlimitation 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);
(xiii) transfer, bonus sell, lease, assign, license, mortgage, subject to Liens (other than Permitted Liens), pledge, surrender, encumber, divest, cancel, abandon or pensionallow to lapse or expire or otherwise dispose of any assets (including Intellectual Property), welfare licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries that would, individually or in the aggregate, exceed $1,000,000, other than in the ordinary course of business consistent with past practice;
(xiv) except as required pursuant to existing written, binding agreements in effect prior to the date hereof and set forth in Section 5.1(j) of the Company Disclosure Letter, or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits of to any director, officer or employee of the Company or any of its Subsidiaries, except (B) increase in any manner the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or bonus, pension, welfare welfare, fringe, severance or other benefits prior to such changeof, (D) increase the severance pay any bonus to, or termination payments or benefits payable make any new equity awards to any current or former director, officer, employee or other service provider consultant of the Company or any of its Subsidiaries, (EC) become a party to, establish, adopt, commence participation in, amend or terminate any stock option plan or other stock-based compensation plan, or any compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement with or for the benefit of any current or former directors, officers, employees or consultants of the Company or its Subsidiaries (or newly hired employees) or amend the terms of any outstanding equity-based awards, (D) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan Benefit Plan, to the extent not already provided in any such Benefit Plan, (including E) enter into any equity-based awards)collective bargaining agreement or other agreement with a labor union, works council or similar organization, (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (G) terminate without cause the employment of any executive officer of the Company, or (H) forgive any loans or issue any loans to directors, officers or employees of the Company or any of its Subsidiaries;
Subsidiaries (iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) than travel and relocation expense advances in immaterial amounts made in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to employees of the Company and its Subsidiaries);
(xv) implement or announce any plant closing, taken as a wholematerial reduction in labor force or other layoffs of employees that would be expected to incur liability under the WARN Act (or any similar state, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (Blocal or foreign Law) except with respect to the Bridge FacilityCompany or any of its Subsidiaries;
(xvi) enter into any joint venture through a general partnership, in replacement oflimited partnership, limited liability company or to refinancesimilar strategic alliance vehicle or other similar arrangement, existing Indebtedness on then prevailing market terms with any Person (for purposes of clarity, the foregoing does not include any advertising, content, affiliate, marketing or on terms substantially consistent with or more beneficial to supplier agreements entered into by the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent business, whether or not referred to colloquially as partnerships, strategic relationships or otherwise described with past practice, similar phrases);
(Exvii) commercial paper issued in enter into any Contract or transaction between the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all Company or any portion of its Subsidiaries, on the Dividend one hand, and any (and fees and expenses in connection therewithi) officer or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations director of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (Gii) Indebtedness under the Bridge Facility, refinancings Affiliate or replacements thereof and of commitments thereunder, and any refinancings or replacements family member of any such refinancing officer or replacement Indebtedness; provided that director or (iii) record or beneficial owner of five percent (5%) or more of the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 voting securities of the Company Disclosure Letter; providedor any Affiliate or family member of such record or beneficial owner, further, that on the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereofother hand, in each case, so long as case of a type that would be required to be disclosed under Item 404 of Regulation S-K under the aggregate principal amount thereof does not exceed $2,500,000,000, Securities Act (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) grants of Company Options made to new hires in connection a manner and amount generally consistent with the repair or replacement of facilitiespast practice, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or and (B) in the ordinary course grants of business consistent with past practice and in the aggregate not in excess Company RSUs made to members of 120% of the amounts reflected in the Company’s capital expenditure budget for each board of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;directors on their respective appointment anniversary dates); or
(vixviii) with respect to the Retained Businessagree, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (KAYAK Software Corp), Merger Agreement (Priceline Com Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date hereof and until the earlier of the termination of this Agreement and pursuant to its terms or the Effective Time, except as otherwise expressly contemplated by this Agreement or as required by applicable Laws, without the prior to the First Effective Time written consent of Parent (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned withheld or delayed), and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) business of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in the ordinary and usual course of business consistent with past practiceand, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use commercially their respective reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior until the earlier of the termination of this Agreement pursuant to its terms or the First Effective Time Time, except (unless A) as otherwise expressly required by this Agreement or required by Law, (B) as Parent shall otherwise may approve in writing, writing (which approval shall not be unreasonably withheld, conditioned withheld or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation incorporation, by-laws or bylaws (or comparable other applicable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), instruments; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), stock; (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends stock; or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture ofrepurchases or redemptions of restricted stock or other equity awards upon termination of employment, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Companysuch awards);
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly-owned Subsidiaries, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers otherwise enter into any agreements or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongarrangements imposing material changes or restrictions on its assets, operations or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)businesses;
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not spend in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 6,500,000 individually or $200,000,000 10,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses assets or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into make any such transaction acquisition that would, or would reasonably be expected to, likely to prevent, materially delay or materially impair the consummation Company’s ability to consummate the transactions contemplated by this Agreement; and provided, further, that the Company must also comply with the requirements set forth in Section 6.1(a)(iii) of the TransactionsCompany Disclosure Letter. For purposes of this clause (iii), the amount spent with respect to any acquisition shall be deemed to include the aggregate amount of capital expenditures that the Company or any of its Subsidiaries is obligated to make at any time or plans to make as a result of such acquisition within two (2) years after the date of acquisition;
(iv) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any of its debt securities or of any of its Subsidiaries, except for (A) drawings under and refinancings or replacements of the Company’s or any of its Subsidiaries’ current credit agreements in an amount not to exceed $25,000,000 in the aggregate at any one time outstanding, provided that the terms of any such replacement must satisfy the requirements set forth in Section 6.1(a)(iv) of the Company Disclosure Letter, (B) other indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices not to exceed $10,000,000 in the aggregate or (C) interest rate or currency swaps on customary commercial terms consistent with past practice and in compliance with its risk management policies in effect on the date of this Agreement and not to exceed $5,000,000 of notional debt in the aggregate;
(v) make or commit to any capital expenditures other than in the ordinary course of business and in any event not in excess of the aggregate amount reflected in the Company’s capital expenditure budget for the year in which such capital expenditures are made, a copy of which capital expenditure budget for 2010 and 2011 has been furnished to Parent;
(vi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries and sales of obsolete assets, except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $10,000,000 in the aggregate, other than pursuant to Contracts in effect as of the date of this Agreement;
(vii) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or of any its Subsidiaries (other than the issuance of shares by a wholly-owned Subsidiary to it or another of its wholly-owned Subsidiaries), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than (A) the issuance of Company Shares pursuant to existing Company Options, Company Warrants, and other Company Awards, and (B) the issuance of Company Options and Company Awards in amounts and at times consistent with the Company’s historic hiring and compensation practices and not in excess of the amount set forth on Section 6.1(a)(vii) of the Company Disclosure Letter;
(viii) make any change with respect to accounting policies or procedures, except as required by changes in GAAP or by Law;
(ix) except as required by Law, (A) make any material Tax election or take any position on any Tax Return filed on or after the date of this Agreement or adopt any method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods, (B) settle or resolve any material Tax controversy, claim or assessment, (C) enter into any material closing agreement, (D) waive or extend any statute of limitations with respect to Taxes, or (E) surrender any right to claim a refund for Taxes;
(x) make any loans, advances or capital contributions to or investments in any Person (other than capital expenditures the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $1,000,000 individually or $2,000,000 in the aggregate;
(xi) enter into (A) any non-competition Contract or other Contract that (x) purports to limit in any material respect either the type of business in which the Company or its Subsidiaries (or, after the Effective Time, Parent or its Affiliates) may engage or the manner or locations in which any of them may so engage in any business or (y) could require the disposition of any material assets or line of business of the Company or its Subsidiaries or, after the Effective Time, Parent or its Affiliates, (B) any other Contract that would have been a Material Contract had it been entered into prior to the date hereof;
(xii) except as required pursuant to Contracts in effect as of the date of this Agreement and set forth in Section 6.1(a)(xii) of the Company Disclosure Letter, or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any of its directors, officers or employees, (B) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any of its directors, officers or employees, except, in each case, for increases or awards made in accordance the ordinary course of business and at times and in amounts consistent with the Company’s historic hiring and compensation practices as described in Section 5.01(b)(v6.1(a)(xii) of the Company Disclosure Letter, (C) establish, adopt, amend or terminate any Company Compensation and Benefit Plan or amend the terms of any outstanding equity-based awards, (D) except as provided in Section 4.4(f), 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 Company Compensation and Benefit Plans, to the extent not already provided in any such Company Compensation and Benefit Plan, (E) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Compensation and Benefit Plan or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (F) forgive any loans to any of its or of any of its Subsidiaries’ directors, officers or employees;
(xiii) amend, modify or terminate any Material Contract (excluding customer or supplier contracts entered into in the ordinary course of business), or cancel, modify or waive any debts or claims held by it or waive any rights other than purchases in the ordinary course of business having a value in excess of $1,000,000 in the aggregate;
(xiv) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied, including the acquisition of any business or assets reasonably likely to have such an effect;
(xv) settle any litigation or other proceedings before or threatened to be brought before a Governmental Entity if such settlements would exceed $1,000,000 in the aggregate; or
(xvi) agree, authorize or commit to do any of the foregoing.
(b) After the date hereof and licenses until the earlier of film the termination of this Agreement pursuant to its terms or the Effective Time, Parent will not and television will not permit its Subsidiaries knowingly to take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied, including the acquisition of any business or assets reasonably likely to have such an effect. Notwithstanding the foregoing and production programming for the avoidance of doubt, the foregoing shall not apply to any pending or planned (includini) strategic engagement or investment, (ii) joint venture, (iii) acquisition or (iv) other similar transactions, that in the case of any transaction described in any of clauses (i) through (iv) of this Section 6.1(b), has been publicly announced prior to the execution of this Agreement.
Appears in 2 contracts
Sources: Merger Agreement (Verifone Systems, Inc.), Merger Agreement (Hypercom Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) otherwise expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) this Agreement or (3) otherwise expressly disclosed set forth in Section 5.01(a) 6.1 of the Company Disclosure Letter), Schedule and except for the acceleration of the vesting of outstanding options to purchase 26,000 Common Shares held by directors under the Company's 1997 Equity Incentive Plan):
(a) its and its Subsidiaries' businesses shall be conducted in the ordinary and usual course (it being understood and agreed that nothing contained herein shall permit the Company shallto enter into or engage in (through acquisition, product extension or otherwise) the business of selling any products or services materially different from existing products or services of the Company and shall cause each of its Subsidiaries to, or to enter into or engage in new lines of business without Parent's prior written approval);
(b) to the extent consistent with (a) above it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve its business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ its existing relations and goodwill with Governmental Entities, customers, suppliers, reinsurers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.associates;
(bc) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval it shall not be unreasonably withheld(i) issue, conditioned sell, pledge, dispose of or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required encumber any capital stock owned by applicable Law, (2) expressly required by the Transaction Documents (including it in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
Subsidiaries; (i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (Aii) amend its certificate of incorporation charter or bylaws by-laws or amend, modify or terminate the New Rights Agreement; (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (Biii) split, combine, subdivide combine or reclassify its outstanding shares of capital stock stock; (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)iv) authorize, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any other than dividends or distributions paid by a from its direct or indirect wholly wholly-owned Subsidiary of Subsidiaries and other than regular quarterly dividends paid by the Company to another direct or indirect wholly owned Subsidiary on its Common Shares not in excess of $0.11 per share and regular quarterly dividends paid by the Company or to on its Preferred Shares in accordance with the Company Company's Articles of Incorporation; or (2v) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire acquire, except in connection with any of the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable into or exercisable for any shares of its stock;
(d) neither it nor any of its Subsidiaries shall (i) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any other property or assets (other than (1) pursuant to exercise of the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice New Rights and with Shares issuable pursuant to options outstanding on the terms date hereof under any of the Company Stock Plans as or upon conversion of the Preferred Shares); (ii) other than in effect on the date ordinary and usual course of this Agreement business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries) or as modified after incur or modify any material indebtedness or other liability; or (iii) make or authorize or commit for any capital expenditures other than in amounts not exceeding $5 million in the date aggregate or, by any means, make any acquisition of, or investment in, assets or stock of this Agreement any other Person or entity, including by way of assumption reinsurance, in accordance excess of $2 million individually or $5 million in the aggregate (other than in connection with ordinary course investment activities);
(e) neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans, other than awards made in the normal course under the Management Incentive Plan in respect of 1997 performance or increase the salary, wage, bonus or other compensation of any employees except increases occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases);
(f) neither it nor any of its Subsidiaries shall pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations legally due and payable and arising in the ordinary and usual course of business, claims arising under the terms of this Agreement) products, contracts or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of policies issued by the Company by Insurance Subsidiaries in the ordinary and usual course of business and such other claims, liabilities or obligations as shall not exceed $5 million in the aggregate;
(g) neither it nor any of its Subsidiaries shall make or change any Tax election, settle any material audit, file any amended tax returns or permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated except in the ordinary and usual course of business;
(h) neither it nor any of its Subsidiaries shall enter into any agreement containing any provision or covenant limiting in any material respect the ability of the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: affiliate to (A) establish, adopt, amend sell any products or terminate services of or to any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofperson, (B) grant engage in any line of business or (C) compete with or to obtain products or services from any person or limiting the ability of any person to provide any transaction products or retention bonuses services to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, Subsidiaries or affiliates;
(Ci) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or neither it nor any of its SubsidiariesSubsidiaries shall enter into any new quota share or other reinsurance transaction (A) which does not contain standard cancellation and termination provisions, (B) which, except in the ordinary course of business consistent with past practice with respect business, materially increases or reduces the Company Insurance Subsidiaries' consolidated ratio of net written premiums to gross written premiums or (1C) employees below pursuant to which $5 million or more in gross written premiums are ceded by the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable Company Insurance Subsidiaries to any director, officer, employee or Person other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of than the Company or any of its Subsidiaries;
(ivj) incur neither it nor any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company Insurance Subsidiaries will alter or amend in any material respect their existing investment guidelines or policies;
(k) neither it nor any of its Subsidiaries with respect shall take any action or omit to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have take any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided action that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of would cause any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually representations and warranties herein to become untrue in any event or (B) transactions among the Company and the Retained Subsidiaries;material respect; and
(viiil) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company it nor any of its Retained Subsidiaries shall will authorize or enter into an agreement to do any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (American Bankers Insurance Group Inc), Merger Agreement (Cendant Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, denied and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of (i) preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates associates, (ii) make all filings, pay all fees and others having material business dealings with take all other actions necessary and reasonable to protect, preserve and maintain the Retained Business Scheduled Intellectual Property, and (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersiii) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly required by this Agreement, (B) as Parent shall otherwise may approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) denied or (3C) otherwise expressly disclosed as set forth in Section 5.01(b7.1(a) of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) adopt or propose any change in its articles of organization or by laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except with respect for any such transactions among wholly-owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business, other than acquisitions pursuant to SpinCo and Contracts in effect as of the SpinCo date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than in the case of clause (A)), (A) amend its certificate the issuance of incorporation shares pursuant to outstanding stock options, warrants or bylaws rights or (or comparable governing documentsB) (other than amendments to the governing documents of any by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(except for v) create or incur any such transaction by a wholly owned subsidiary Lien material to the Company or any of its Subsidiaries on any assets (including Intellectual Property) of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its Subsidiaries having a value in excess of $100,000;
(vi) make any loans, advances, guarantees or capital stock contributions to or investments in any Person (except for (1) other than the Company or any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company) in excess of $100,000 in the aggregate;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to another any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of to the Company or to the Company any other direct or (2indirect wholly owned Subsidiary or regular quarterly dividends, not to exceed $.07 per share, declared and paid consistent with prior timing) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)stock;
(iiix) merge incur any indebtedness for borrowed money or consolidate with any other guarantee such indebtedness of another Person, or restructure, reorganize issue or completely sell any debt securities or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except for (i) indebtedness for borrowed money at any one time outstanding incurred in the ordinary course of business consistent with past practice with respect practices for working capital incurred pursuant to (1) employees below the level Bank of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount America Credit Facility not to exceed indebtedness as of March 2, 2007 plus $400,000,000 15,000,000, (ii) in the aggregate at any time outstanding on prevailing market terms or replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial to than the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement ofindebtedness being replaced, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (Ciii) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging guarantees incurred in compliance with this Section 7.1 by the hedging strategy Company of indebtedness of wholly-owned Subsidiaries of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practiceCompany;
(vx) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) except as set forth in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 budgets set forth in Section 5.01(b)(v7.1(a)(x) of the Company Disclosure Letter;
(vi) with respect to the Retained BusinessSchedule and consistent therewith, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon make or otherwise dispose of authorize any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not expenditure in excess of $50,000,000 individually if the transaction is not 1,000,000 in the ordinary course or $100,000,000 individually in aggregate during any event or (B) transactions among the Company and the Retained Subsidiaries12-month period;
(viiixi) except enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xii) make any changes with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, accounting policies or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such sharesprocedures, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement as required by changes in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii)applicable generally accepted accounting principles;
(ixxiii) with respect to the Retained Businessamend, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming modify or video game productionterminate any Material Contract or Intellectual Property Contract, which is subject to Section 5.01(b)(x)or cancel, spend modify or commit to spend waive any debts or claims held by it or waive any rights in excess of (A) $25,000,000 if the transaction is not 250,000 in the ordinary course and aggregate;
(xiv) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of the amount of any reserve on the balance sheet as of March 2, 2007 as set forth on Section 7.1(a)(xiv) of the Company Disclosure Schedule plus $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 150,000 in the aggregate in or any year, in each case to acquire any business, whether by merger, consolidation, purchase of property obligation or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as liability of the date Company in excess of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactionsamount;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 2 contracts
Sources: Merger Agreement (Stride Rite Corp), Merger Agreement (Payless Shoesource Inc /De/)
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries thatotherwise (i) expressly permitted or required by this Agreement, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1ii) required by applicable Law, (2iii) expressly required approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or as contemplated by the Final Step Planconditioned) or (3iv) otherwise expressly disclosed set forth in Section 5.01(a6.1(a) of the Company Disclosure Letter)Schedule, from the date of this Agreement until the Effective Time, the Company shallwill, and shall will cause each of its Subsidiaries to, to conduct their businesses in the ordinary course of business consistent with past practice and use its and their reasonable best efforts to conduct maintain and preserve intact the Retained Business material aspects of their business organizations, to maintain their business relationships and goodwill with suppliers, contractors, distributors, customers, partners, employees, licensors, licensees and others having material business relationships with it, to retain the services of the Company’s and its Subsidiaries’ employees and business associates and agents and to comply in all material respects with all applicable Laws and the requirements of all Material Contracts.
(b) Without limiting the generality of the foregoing, except as otherwise expressly (x) permitted or required by this Agreement, (y) approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (z) set forth in Section 6.1(b) of the Company Disclosure Schedule, from the date of this Agreement until the Effective Time, the Company will not, and will cause its Subsidiaries not to:
(i) (x) adopt or propose any change in the Charter or bylaws of the Company or (y) adopt any change in the comparable organizational document of any Subsidiary of the Company;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transaction between or among any of its Subsidiaries that would not impose, individually or in the aggregate, any changes or restrictions on its assets, operations or business or on the assets, operations and business of the Company and its Subsidiaries taken as a whole that would be adverse to Parent or any of its Affiliates, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement imposing, individually or in the aggregate, any changes or restrictions on the assets, operations or business or on the assets, operations and business of the Company or any of its Subsidiaries that would be adverse to Parent or any of its Affiliates;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any material assets, securities, properties, rights, interests or businesses (other than purchases of supplies, equipment, managed services, cloud services, software or inventory in the ordinary course of business consistent with past practice);
(iv) sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire, transfer or dispose of, or create or incur any Lien (other than Permitted Liens) on, any of the Company’s or its Subsidiaries’ material assets (including Intellectual Property Rights), securities, properties, rights, interests or businesses (including pursuant to any sale-leaseback transaction or asset securitization transaction but excluding any sale, disposition, lease or license of inventory or product in the ordinary course of business consistent with past practice);
(v) purchase, redeem or otherwise acquire, or authorize or agree to purchase, redeem or acquire, any Group Securities (other than Group Securities of wholly owned Subsidiaries of the Company and other than the acceptance of Shares as payment for the exercise price of Company Options (including pursuant to a net exercise feature) or for withholding taxes incurred in connection with the exercise of Company Options or the vesting or net settlement of other Group Securities outstanding under the Stock Plans (and dividend equivalents thereon, if any), in each case to the extent such Group Securities for withholding taxes that are outstanding as of the date of this Agreement and in accordance with their applicable terms on the date of this Agreement);
(vi) except (A) for Shares issuable upon the exercise or conversion of Company Options or Company RSUs outstanding on the date hereof; or (B) with respect to Parent’s and Merger Sub’s participation in the transactions contemplated by this Agreement, issue, sell, grant, dispose of, pledge, deliver, transfer or otherwise encumber or authorize, propose or agree to the issuance, sale, grant, disposition, pledge, delivery, transfer or encumbrance by the Company or any of its Subsidiaries of, any Group Securities;
(vii) make any loans, advances or capital contributions to, or investments in, any Person (other than the Company or any of its wholly-owned Subsidiaries), whether or not in the ordinary course of business consistent with past practice, and in an amount greater than $500,000 individually or $2,000,000 in the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.aggregate;
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Cviii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (otherwise, with respect to any Group Securities or consent to any combination thereof) in respect dividend or distribution of any shares of its capital stock each Joint Venture Entity (except for (1) any dividends or other distributions paid by a direct or indirect wholly any wholly-owned Subsidiary of the Company to another direct the Company or indirect wholly to any other wholly-owned Subsidiary of the Company or to the Company pro rata dividends or (2distributions by Joint Venture Entities) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stockGroup Securities or Joint Venture Entity Securities;
(ix) reclassify, split, combine or (E) purchase, repurchase, redeem or otherwise acquire subdivide any shares of its the capital stock of the Company;
(x) create, incur or assume any securities convertible or exchangeable into or exercisable material indebtedness for any shares of its capital stock borrowed money (other than trade payables (1including, for avoidance of doubt, indebtedness associated with the purchase of products or services of the Company) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Unitsand company credit cards, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase practice) or guarantee, endorse or otherwise become responsible (whether directly, contingently or otherwise) for any such indebtedness;
(xi) other than facilities or technology capital expenditures in the cost ordinary course of such Company Plan business consistent with past practice, make or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses commit to any directorcapital expenditure or expenditures in an amount greater than $500,000 individually or $2,000,000 in the aggregate;
(xii) enter into any agreement, officer, employee arrangement or other service provider of commitment that materially limits or otherwise restricts the Company or its Subsidiaries from engaging or competing in any line of business or in any geographic area or otherwise enter into any agreements, arrangements or commitments imposing material changes or restrictions on its Subsidiariesassets, (C) increase the compensation, bonus operations or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiariesbusiness, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariespractices;
(ivxiii) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) enter into any Contract that, if in effect on the date hereof, would have been a Material Contract (other than in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednesspractices), (B) except with terminate or amend or modify in any material respect to the Bridge Facilityany Material Contract or any Contract that, if in replacement of, or to refinance, existing Indebtedness effect on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the hereof, would have been a Material Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security other than terminations or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into amendments in the ordinary course of business consistent with past practice), (EC) commercial paper issued waive in any material respect any term of, or waive any material default under, or release, settle or compromise any material claim against the Company or any of its Subsidiaries or material liability or obligation owing to the Company or any of its Subsidiaries under, any Material Contract or any Contract that, if in effect on the date hereof, would have been a Material Contract or (D) enter into any Contract that contains a change of control provision or any similar provision that would require a payment to the other party or parties thereto as a result of the consummation of the Merger or the other transactions contemplated by this Agreement (including in combination with any other event or circumstance); it being agreed that the entry into, termination, amendment or modification of any Contract that (x) is or would be a Material Contract of the type described in clauses (A), (B), (C), (D), (F) (with respect to entering into a new Real Property Lease or terminating, amending or modifying a Real Property Lease in effect as of the date of this Agreement), (J), (K), (M) or (N) of Section 5.1(j)(i), or (y) will involve payments to or from the Company and/or any of its Subsidiaries in excess of $15,000,000 in any one-year period, in each case, will not be considered to be in the ordinary course of business consistent with past practice practices;
(xiv) materially change the Company’s methods of accounting, except as required by concurrent changes in a principal GAAP or in Regulation S-X of the Exchange Act;
(xv) agree to or otherwise settle, compromise or otherwise resolve in whole or in part any Action for an amount not to exceed in excess of $250,000,000 500,000 individually or $2,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000aggregate; provided, furtherhowever, that neither the Separation Agreement Company nor any of its Subsidiaries shall provide that SpinCo shall assume settle any Action (regardless of the obligations amount involved) if any such settlement would impose any material obligation or restriction on the Company or its Subsidiaries from time to time or on the Company’s or its Subsidiaries’ ability to own or operate any of its assets, licenses, operations, rights, product lines, businesses or interests therein or require any material changes to the business of the Company or its Subsidiaries from time to time;
(xvi) except as may be required by applicable Law, (A) make a new material Tax election or change any material Tax election, (B) change any entity classification of any Subsidiary, (C) create a permanent establishment in any country other than the country in which the Company or any of its Subsidiaries with respect to such Indebtedness is organized, (and Parent and its SubsidiariesD) file any amended income Tax Return or other material amended Tax Return, including(E) adopt or change any annual Tax accounting period or material accounting method for Taxes, following the Distribution, the Retained Subsidiaries, shall not have (F) settle or compromise any obligations in respect thereof)material Tax claim, (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and surrender any material claim for a refund of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G)Taxes, (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings enter into any closing agreement relating to Taxes or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) file any amendment, refinancing income Tax Return or renewal other material Tax Return that is inconsistent with past practice;
(xvii) take or fail to take any action that would reasonably be expected to result in any of the existing revolving and term loan facilities conditions set forth in Article VII (Conditions) not to be satisfied or prevent or materially impede the consummation of the YES Facility and transactions contemplated by this Agreement, except as permitted under Section 6.2;
(xviii) announce, implement or effect any refinancing thereofmaterial reduction in labor force, in each caselay-off, so long as early retirement program, severance program or other program or effort concerning the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy termination of employment of employees of the Company (including any “plant closing” or “mass layoff” as of the date of this Agreement those terms are defined in the ordinary course of business consistent with past practice WARN Act or in connection with any similar action under a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) abovesimilar Law), (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing other than routine employee terminations in the ordinary course of business consistent with past practice;
(vxix) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(xx) except as required by applicable Law or pursuant to the terms of any Benefit Plan as in effect as of the date of this Agreement and set forth in the Company Disclosure Schedule, (A) terminate, adopt, establish, enter into, amend or renew (or communicate any intention to take such action) any Benefit Plan, (B) increase in any manner the compensation, benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants who are natural persons of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan, other than payments based on actual performance for completed performance periods, (D) accelerate the vesting of or lapsing of restrictions, or amend the vesting requirements, with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new awards, or amend or modify the Retained Businessterms of any outstanding awards, under any Benefit Plan, (F) take any action to accelerate the payment, or to fund or secure the payment, of any amounts under any Benefit Plan, (G) forgive any loans or issue any loans (other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) routine travel advances issued in the ordinary course of business consistent business) to any Company employee, (H) hire any employee or consultant who is a natural person with past practice a target total annual cash compensation (e.g., base pay or base rate and in the aggregate not short-term cash incentive target amounts) opportunity in excess of 120% $200,000, (I) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (J) terminate without cause the employment of any executive officer of the amounts reflected in Company; or
(xxi) agree, authorize or commit to do any of the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(vforegoing.
(c) Prior to making any broad-based written or oral communications to the officers or employees of the Company Disclosure Letter;or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication (or, in the case of any oral communications, copies of scripts, talking points or other similar materials), upon providing Parent with the communication, Parent shall have a reasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(vid) with respect Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon right to control or otherwise dispose direct the operations of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect Subsidiaries prior to the Retained BusinessEffective Time. Prior to the Effective Time, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company shall exercise, consistent with the terms and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date conditions of this Agreement in accordance with the existing terms of such awards Agreement, complete control and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) supervision over its and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinSubsidiaries’ respective operations.
Appears in 2 contracts
Sources: Merger Agreement (Pcm, Inc.), Merger Agreement (Insight Enterprises Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, during the period from and after the execution date of this Agreement and prior through the earlier of the Closing or the termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law), (2) expressly required by the Transaction Documents (including as set forth in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(aPart 4.1(a) of the Company Disclosure Letter)Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly required by this Agreement, the Company shall, and shall cause each of its the Company Subsidiaries to, use conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course of business consistent with past practice, in all material respects and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to maintain and preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entitiesits business organization, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present key employees and agents.
(b) maintain satisfactory relationships with customers, suppliers and distributors. Without limiting the generality of, and in furtherance of, the foregoing, during the Company covenants and agrees as to itself and its Subsidiaries that, period from and after the date of this Agreement and prior through the earlier of the Closing or the termination of this Agreement, except (1) to the First Effective Time (unless extent Parent shall otherwise approve give its prior consent in writing, writing (which approval consent shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law), (2) expressly required by the Transaction Documents (including as set forth in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(bPart 4.1(a) of the Company Disclosure Letter)Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly permitted or required by this Agreement, the Company shall not (and shall not permit any of its Subsidiaries Company Subsidiary to:):
(i) except with respect to SpinCo and amend the SpinCo Subsidiaries Company’s Organizational Documents or the Organizational Documents of any Company Subsidiary (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments any amendment to the governing documents Organizational Documents of any Company Subsidiary of the Company that would not preventreasonably be expected to be adverse to Parent or to impair, prevent or delay or impair the Initial Merger or consummation of any of the other Transactionstransactions contemplated hereby), ;
(Bii) split, combine, subdivide subdivide, amend the terms of or reclassify its outstanding any shares of the Company’s capital stock stock;
(except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Ciii) declare, set aside aside, make or pay any dividend or other distribution (whether payable in cash, stock or property (or any combination thereofproperty) in with respect of to any shares of its the Company’s capital stock or the capital stock of any Company Subsidiary, other than (except for A) the Company’s regular quarterly dividend on the Company Common Stock to be declared and paid in the first quarter of the Company’s 2021 fiscal year only, in a quarterly amount not to exceed the amount set forth in Part 4.1(a)(iii) of the Company Disclosure Schedule, or (1B) any dividends or distributions paid by a direct or indirect any wholly owned Company Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other another wholly owned Subsidiary of the Company);
(iiiv) merge acquire (by merger, consolidation, acquisition of stock or consolidate with assets, formation of a joint venture or otherwise) (A) any other Person, (B) any equity interest in any other Person, (C) any business, or restructure(D) any assets, reorganize or completely or partially liquidate except, (other than transactions of the type contemplated 1) acquisitions by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such from any wholly owned Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, among any wholly owned Subsidiaries of the Company that would not preventCompany; (2) the purchase of equipment, materially delay or materially impair supplies and inventory in the Transactions);
ordinary course of business, (iii3) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms inbound licenses of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan Intellectual Property in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinor
Appears in 2 contracts
Sources: Merger Agreement (Analog Devices Inc), Merger Agreement (Maxim Integrated Products Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned delayed or delayedconditioned)), and except as (1) otherwise expressly contemplated or permitted by this Agreement or as required by a Governmental Entity or applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, business of it and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in all material respects in the ordinary course of business consistent with past practicepractice and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance consistent with the specific matters set forth belowforegoing, the Company and its Subsidiaries shall use their respective commercially reasonable efforts to (u) preserve the Retained Business’ organization intact and their business organizations substantially intact, (v) maintain the Retained Business’ existing relations and goodwill satisfactory relationships with Governmental Entities, customers, customers and suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersw) and keep available the services of their key employees, key consultants and executive officers, (x) in connection with any and all clinical trial(s) for DX-2930, notify Parent (i) promptly after receipt of any material communication from any Regulatory Authority or inspections of any manufacturing, research and development or clinical trial site and before giving any material submission to a Regulatory Authority and (ii) a reasonable time prior to making any material change to a study protocol, adding new trials, making any material change to a manufacturing plan or process, or making a material change to the development timeline, and (z) preserve and protect the Intellectual Property owned by the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of; provided, and in furtherance ofhowever, the foregoing, that no action taken by the Company covenants and agrees as to itself and or its Subsidiaries that, from and after with respect to matters specifically addressed by clauses (i)-(xvii) of this Section 6.1(a) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. From the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly contemplated or permitted by this Agreement, (B) as Parent shall otherwise may approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except (C) as (1) is required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Law or any Governmental Entity or (3D) otherwise expressly disclosed as set forth in Section 5.01(b6.1(a) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws or other applicable governing instruments, other than, in the case of its Subsidiaries, in a manner that would not materially restrict the operation of its business;
(or comparable governing documentsii) (x) merge or consolidate the Company or any of its Subsidiaries with any other than amendments to the governing documents Person or (y) adopt a partial or complete plan of any Subsidiary dissolution, liquidation, consolidation, recapitalization, restructuring or other reorganization of the Company that would not preventor its Subsidiaries;
(iii) issue, delay sell, pledge, dispose of, grant, transfer, encumber, or impair authorize the Initial Merger issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or the other Transactions)encumbrance of, (B) split, combine, subdivide or reclassify its outstanding any shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation or any of such transactionits Subsidiaries (other than the issuance of Shares upon (x) the exercise or vesting, as applicable, of Company Options or Company RSUs outstanding as of the date hereof or in compliance with this Agreement or (y) in connection with the ESPP in compliance with this Agreement), (C) declare, set aside or pay any dividend securities convertible or distribution payable in cash, stock exchangeable into or property (or any combination thereof) in respect of exercisable for any shares of its such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(except for iv) make any loans, advances or capital contributions to or investments in any Person (1) other than the Company or any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company) in excess of $1,000,000 in the aggregate;
(v) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to another any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of to the Company or to the Company any other direct or (2indirect wholly owned Subsidiary) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock;
(vi) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, retention or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities acquisition of any wholly owned Subsidiary of the Company Shares tendered by the Company current or any other wholly owned Subsidiary of the Company);
(ii) merge former employees or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company directors in which such Subsidiary is the surviving entity order to pay Taxes in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongthe exercise or vesting, as applicable, of Company Options or Company RSUs or in connection with the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan ESPP in the ordinary course of business consistent with past practice that does not materially increase practice);
(vii) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (other than a wholly owned Subsidiary of the cost of such Company Plan Company), or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant issue or provide sell any transaction debt securities or retention bonuses to any director, officer, employee warrants or other service provider rights to acquire any debt security of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except than indebtedness in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a an aggregate principal amount not to exceed $400,000,000 in the aggregate 1,000,000 outstanding at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, time;
(x) other than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, acquire any assets or equity interests in any other Person for a fair market value in an amount in excess of (E1) commercial paper issued $1,000,000 in a single transaction or series of related transactions or (2) $5,000,000 in the aggregate and (y) except for expenditures set forth in capital budgets made available to Parent prior to the date of this Agreement, make or authorize any capital expenditure in excess of $1,000,000 in the aggregate during any calendar year;
(ix) (x) make any material changes with respect to financial accounting policies or procedures, except as required by GAAP, or (y) except as required by applicable Laws or GAAP, revalue in any material respect any of its assets, including writing off accounts or notes receivable, other than in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 2 contracts
Sources: Merger Agreement (Shire PLC), Merger Agreement (Dyax Corp)
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries thatotherwise (i) required by this Agreement, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1ii) required by applicable Law, (2iii) expressly required approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or as contemplated by the Final Step Planconditioned) or (3iv) otherwise expressly disclosed in set forth on Section 5.01(a6.1(a) of the Company Disclosure Letter)Schedule, from the date of this Agreement until the Effective Time, the Company will, and will cause its Subsidiaries to, use its and their reasonable best efforts to conduct their businesses in the ordinary course of business consistent with past practice and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its and their reasonable best efforts to conduct preserve their business organizations intact (including the Retained Business service of key employees) and to maintain existing relations with key Persons with whom the Company and its Subsidiaries have significant relationships; provided, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such provision of Section 6.1(b).
(b) Except as otherwise (w) required by this Agreement, (x) required by applicable Law, (y) approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (z) set forth on Section 6.1(b) of the Company Disclosure Schedule, from the date of this Agreement until the Effective Time, the Company will not, and will cause its Subsidiaries not to:
(i) (x) adopt or submit to shareholder approval any change in the articles of incorporation or bylaws of the Company or (y) adopt any change in the comparable organizational document of any Subsidiary of the Company that, in the case of this clause (y), would adversely affect or delay the consummation of the Merger or the other transactions contemplated by this Agreement;
(ii) (x) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transaction between or among any of its Subsidiaries that would not impose, individually or in the aggregate, any changes or restrictions on its assets, operations or business or on the assets, operations and business of the Company and its Subsidiaries taken as a whole that would be adverse to Parent or any of its Subsidiaries or (y) restructure, reorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement imposing, individually or in the aggregate, any changes or restrictions on the assets, operations or business or on the assets, operations and business of the Company or any of its Subsidiaries that would be adverse to Parent or any of its Subsidiaries;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses, other than (A) acquisitions of inventory, supplies and similar materials in the ordinary course of business consistent with past practice, (B) pursuant to Contracts in effect on the date of this Agreement which have been disclosed in unredacted form to Parent prior to the date of this Agreement, (C) in accordance with the Company’s capital expenditure budget made available to Parent prior to the date of this Agreement and set forth in the Company shallDisclosure Schedule, and shall cause each or (D) any other acquisitions for consideration that are not in excess of $5,000,000 in the aggregate;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Lien against, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of the Company or any of its Subsidiaries toSubsidiaries, solely or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to the extent related to the Retained Businessacquire any shares of such capital stock or such convertible or exchangeable securities, subject to compliance with the specific matters set forth belowin each case, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business other than (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersA) and keep available the services of any such transaction among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries that would not be adverse to Parent or any of its Subsidiaries’ present employees and agents.
, or (bB) Without limiting any issuance, sale, grant or transfer of Shares pursuant to (1) the generality of, and in furtherance of, exercise or settlement of Company Options or Company RSU Awards outstanding as of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and date of this Agreement or granted after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve not in writing, which approval shall not be unreasonably withheld, conditioned violation of this Agreement or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents grant of Company Restricted Share Awards after the date of this Agreement not in violation of this Agreement;
(including in connection with the Separation and the Distributionv) make any loans, advances or capital contributions to any Person (3other than (A) otherwise expressly disclosed in Section 5.01(b) of to the Company Disclosure Letter), the Company shall not and shall not permit or any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)wholly-owned Subsidiaries, (B) split, combine, subdivide or reclassify its outstanding shares of capital stock pursuant to any Contract described in clause (except for any such transaction by a wholly owned subsidiary F) of the Company which remains definition of a wholly owned Subsidiary after consummation of such transaction), “Material Contract,” (C) extensions of credit terms to customers or vendors in the ordinary course of business and (D) customary loans or advances to employees in the ordinary course of business in amounts not to exceed $10,000,000 in the aggregate at any time);
(vi) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1A) any dividends or other distributions paid by a direct or indirect wholly any wholly-owned Subsidiary of the Company to another direct the Company or indirect wholly to any other wholly-owned Subsidiary of the Company or and (B) regular quarterly dividends to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) shareholders of the Company Disclosure Letter)by the Company in an amount not to exceed $0.18 per Share, (D) enter into any agreement in each case declared and paid at such times as is consistent with respect historical practice over the most recent fiscal year ended prior to the voting date of its capital stockthis Agreement);
(vii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than except for (1A) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly such transaction by a wholly-owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not preventbe adverse to Parent or any of its Subsidiaries and (B) acquisitions of Shares in satisfaction of withholding obligations in respect of Company Options, materially delay Company Restricted Share Awards or materially impair Company RSU Awards or payment of the Transactionsexercise price in respect of Company Options, in each case, outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement);
(iiiviii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establishcreate, adoptincur, amend assume, guarantee, endorse, suffer to exist or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent otherwise be liable with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses respect to any directorindebtedness for borrowed money, officer, employee issue or sell any debt securities or warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except (A) indebtedness for borrowed money in an amount not to exceed $10,000,000 in the ordinary course of business consistent with past practice with respect to aggregate that is (1) employees below on terms not materially less favorable in the level of Executive Vice President and aggregate than the Company’s existing indebtedness or (2) employees prepayable at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationany time at par (plus customary floating rate breakage costs, bonus or pension, welfare or other benefits prior to such changeif applicable), (DB) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider guarantees of indebtedness of the Company or any of its wholly-owned Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness indebtedness between or among the Company and/or any of its wholly-owned Subsidiaries and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding financing of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing accounts payable in the ordinary course of business consistent with past practice;
(vix) other than in accordance with the Company’s capital expenditure budget made available to Parent prior to the date of this Agreement and set forth in the Company Disclosure Schedule, incur or commit to any capital expenditure or expenditures, except capital expenditures of less than $1,000,000 individually or $10,000,000 in the aggregate;
(x) other than in the ordinary course of business or in connection with any matter to the extent such matter is expressly permitted by any other clause of this Section 6.1(b), (A) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement or (B) amend or modify in any material respect or assign (other than assignments between or among the Company and/or any of its Subsidiaries that would not be adverse to Parent or any of its Subsidiaries) or terminate any Material Contract, other than expirations of any such Contract in accordance with its terms; provided, however, that in no event may the Company enter into any Contract described in clause (B) or (E) of the definition of a “Material Contract” or any Specified Contract, except, in each case, as would not be adverse to Parent or any of its Subsidiaries following the Effective Time other than in any de minimis respect;
(xi) make any material changes with respect to financial accounting policies or procedures, except as required by Law, proposed Law or by U.S. GAAP or statutory or regulatory accounting rules or interpretations with respect thereto or by any Governmental Authority or quasi-governmental authority (including the Retained BusinessFinancial Accounting Standards Board or any similar organization);
(xii) settle any action, suit, claim, hearing, arbitration, investigation or other proceedings (other than any audit or other proceeding in respect of Taxes), for an amount in excess of $2,000,000 individually or $25,000,000 in the aggregate or any obligation or liability of it in excess of such amount or on a basis that would result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Authority that would restrict the future activity or conduct of Parent, the Company or any of their respective Subsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person other than with respect to monetary settlements only, settlements or compromises of any action, suit, claim, hearing, arbitration, investigation or other proceedings to the extent reflected or reserved against in the balance sheet (or the notes thereto) of the Company included in the Company Reports filed prior to the date of this Agreement for an amount not in excess of the amount so reflected or reserved;
(A) make or change any material Tax election, other than consistent with past practice, (B) change any entity classification for federal income tax purposes of any material Subsidiary, (C) create an entity outside of the United States that is (x) a direct Subsidiary of the Company or any of its domestic Subsidiaries and (y) treated as a “disregarded entity” or partnership for U.S. federal income tax purposes, or knowingly create a permanent establishment of the Company or any domestic Subsidiary outside the United States, (D) file any material amended Tax Return, (E) adopt any material accounting method for Taxes, other than consistent with past practice or change any material accounting method for Taxes, (F) settle or compromise any Tax claim for an amount in excess of $2,000,000 individually or $25,000,000 in the aggregate, other than with respect to acquisitions settlements or compromises of businessesany Tax claim for an amount that does not exceed the amount disclosed, which is subject reflected or reserved in accordance with U.S. GAAP in the Company Reports filed prior to Section 5.01(b)(ix)the date of this Agreement, and (G) surrender any material claim for a refund of Taxes, (H) enter into any closing agreement relating to a material amount of Taxes or (I) other than with respect to film and television production and programming (including sports rights) with third parties or video game productionin the ordinary course of business, which is subject to Section 5.01(b)(x), make or commit consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(xiv) transfer, sell, lease, license, divest, cancel or otherwise dispose of, or permit or suffer to exist the creation of any Lien upon, any assets of the Company or any of its Subsidiaries, including capital expenditures other than (A) in connection with the repair or replacement stock of facilitiesany of its Subsidiaries, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) except for sales in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company obsolete assets and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with having a fair market value not in excess of $50,000,000 1,000,000 individually if the transaction is not or $10,000,000 in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiariesaggregate;
(viiixv) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, as required by any shares Benefit Plan in effect as of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement or adopted or entered into in accordance with the existing terms of such awards and the Company Stock Plansthis Agreement, (A) terminate, adopt, establish, enter into, amend or renew any Benefit Plan, other than amendments that do not materially increase benefits or result in materially increased administrative costs; (B) Investment Preferred Stock increase in any manner the compensation, benefits, severance or termination pay of any of the current or former (as defined x) directors, (y) executive officers or (z) employees or consultants who are natural persons of the Company or its Subsidiaries with target total annual cash compensation opportunities (i.e., base pay or base rate and short term cash incentive target amounts) in the Bridge Facility) or excess of $300,000; (C) by wholly owned Subsidiaries to increase in any manner the compensation, benefits, severance or termination pay of any employees or consultants who are natural persons of the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights its Subsidiaries with target total annual cash compensation opportunities at or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Businessbelow $300,000, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 of business consistent with past practice; provided, that (x) any such increase in any event bonus or incentive payment corresponds to a routine annual salary or base pay increase implemented in the ordinary course of business consistent with past practice or (By) $50,000,000 individually any such bonus (or $200,000,000 increase in bonus) or similar incentive payment is awarded in recognition of the recipient’s performance in the aggregate ordinary course of business consistent with past practice; (D) pay any bonus or incentive compensation under any Benefit Plan, other than payments based on actual performance for completed performance periods; (E) accelerate the vesting of or lapsing of restrictions, or amend the vesting requirements, with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan; (F) grant any new severance, change in control, retention benefit or any yearother similar award (other than pursuant to arrangements entered into with newly hired and promoted employees in the ordinary course of business consistent with past practice (provided, that, in each case case, such arrangement is in all material respects in the form that has been provided to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value Parent as of the date of this Agreement) and for separation agreements entered into with terminated employees who are not executive officers in the agreement for such acquisitionordinary course of business consistent with past practice); provided that neither (G) take any action to accelerate the Company nor any of its Retained Subsidiaries shall enter into any such transaction that wouldpayment of, or would reasonably be expected toto fund or secure the payment, prevent, materially delay or materially impair the consummation of the Transactions;
any amounts under any Benefit Plan; (H) hire any (x) consultant who is a natural person with aggregate annual fees in excess of $300,000, (y) executive officer or (z) employee who, upon commencement of employment would be designated as a “Level 8” employee or above, except, in the case of clause (z), employees who are hired in the ordinary course of business to fill positions that are open as of the date of this Agreement or that become open subsequent to the date of this Agreement as a result of a current employee’s departure; provided, that such new hire’s compensation and benefits package is comparable to that which the Company has historically made available to employees in similar positions, taking into account reasonable modifications for competitive market arrangements; (I) promote any executive officer of the Company or promote any employee to an executive officer position; (J) become a party to, establish, adopt, materially amend, commence participation in or terminate any collective bargaining agreement or other than capital expenditures made agreement with a labor union, works council or similar organization; or (K) terminate without cause the employment of any executive officer of the Company; or
(xvi) agree, authorize or commit to do any of the foregoing.
(c) After the date of this Agreement and prior to the Effective Time, Parent and its Subsidiaries shall not (x) acquire control (it being understood for the purposes of this Section 6.1(c) that obtaining the right to a board seat of a third party shall be deemed control) or (y) enter into an agreement, arrangement or understanding to acquire control of a third party in accordance with Section 5.01(b)(vNorth America that is in the grocery industry and operates physical retail stores if (i) and other than purchases and licenses such acquisition of film and television and production programming control or (includinii) entr
Appears in 2 contracts
Sources: Merger Agreement, Merger Agreement (Amazon Com Inc)
Interim Operations. (a) The Company covenants Versum and agrees Entegris each covenant and agree as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent Versum or Entegris, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1otherwise expressly contemplated by this Agreement or as set forth in Section 7.1(a) required by applicable Lawof such Party’s Disclosure Letter, (2i) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in all material respects in the ordinary course of business consistent with past practice, Ordinary Course and the Company shall, and shall cause each of its Subsidiaries to, solely (ii) to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees Employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees officers, Employees and agents, except as otherwise expressly contemplated by this Agreement.
(b) Without limiting the generality of, of and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatof Section 7.1(a), from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise (unless Parent shall otherwise approve w) expressly contemplated by this Agreement, (x) required by applicable Law, (y) as approved in writing, writing by the other Party (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3z) otherwise expressly disclosed set forth in Section 5.01(b7.1(b) of the Company such Party’s Disclosure Letter), the Company each Party, on its own account, shall not and shall not permit any of cause its Subsidiaries not to:
(i) make or propose any change to such Party’s Organizational Documents or, except for amendments that would both not materially restrict the operations of such Party’s businesses and not reasonably be expected to prevent, materially delay or materially impair the ability of such Party to consummate the Transactions, the Organizational Documents of any of such Party’s Subsidiaries;
(ii) other than in the Ordinary Course, except for any such transactions among its direct or indirect wholly owned Subsidiaries, (A) merge or consolidate itself or any of its Subsidiaries with any other Person, or (B) restructure, reorganize or completely or partially liquidate;
(iii) acquire assets outside of the Ordinary Course from any other Person (A) with a fair market value or purchase price in excess of $75 million in the aggregate in any transaction or series of related transactions (including incurring any Indebtedness related thereto), in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or (B) that would reasonably be expected to prevent, materially delay or materially impair the ability of such Party to consummate the Transactions, in each case, other than acquisitions of inventory or other goods in the Ordinary Course and transactions among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly-owned Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or of any of its Subsidiaries (other than in the case issuance of clause (A)), shares (A) amend by its certificate direct or indirect wholly owned Subsidiary to it or another of incorporation its direct or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)indirect wholly owned Subsidiaries, (B) splitin respect of equity-based awards outstanding as of the date of this Agreement, combineor (C) granted in accordance with Section 7.1(b)(xvi) or pursuant to the Entegris ESPP, subdivide in each of clauses (B) and (C), in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement), or reclassify its outstanding securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance (other than any Permitted Encumbrances) over any material portion of such Party’s and its Subsidiaries’ consolidated properties and assets that is not incurred in the Ordinary Course on any of its assets or any of its Subsidiaries, except for Encumbrances (A) that are required by or automatically effected by Contracts in place as of the day hereof, (B) that do not materially detract from the value of such assets or (C) that do not materially impair the operations of such Party or any such transaction by a of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from Versum and any of its direct or indirect wholly owned subsidiary Subsidiaries or to or from Entegris and any of the Company which remains a its direct or indirect wholly owned Subsidiary after consummation Subsidiaries, as applicable, or in accordance with Section 7.1(b)(xvi)) in excess of such transaction), $10 million in the aggregate;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary Subsidiary) or modify in any material respect its dividend policy; provided, that (A) Entegris may make, declare and pay one regular quarterly cash dividend in each fiscal quarter in an amount per share of up to $0.07 per quarter with a record date consistent with the Company or record date for each quarterly period and (B) Versum may make, declare and pay one regular quarterly cash dividend in each fiscal quarter in an amount per share of up to $0.08 per quarter and with a record date consistent with the record date for each quarterly period, in each case, solely to the Company or extent (2I) normal semiannual cash dividends on such Party has given the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect other Party sufficient notice prior to the voting of its capital stockdeclaration date to enable the Parties to coordinate dividend payments in accordance with to Section 7.16 and (II) such payment is coordinated pursuant to, and permitted by, Section 7.16;
(viii) reclassify, split, combine, subdivide or redeem, purchase (Ethrough such Party’s share repurchase program or otherwise) purchase, repurchase, redeem or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock, other than with respect to (A) the capital stock or other equity interests of a direct or indirect wholly owned Subsidiary of such Party or (B) the acquisition of shares of Versum Common Stock or Entegris Common Stock, as applicable, tendered by Employees in connection with a cashless exercise of Versum Options or Entegris Options, as applicable, outstanding as of the date hereof or in order to pay Taxes in connection with the exercise or vesting of Versum equity awards or Entegris equity awards, as applicable, outstanding as of the date hereof or granted in accordance with Section 7.1(b)(xvi), pursuant to the terms of the Versum Stock Plan or Entegris Stock Plan, as applicable, and the applicable award agreement, in the Ordinary Course;
(ix) except to the extent expressly provided by, and consistent with, Section 7.1(b)(ix) of such Party’s Disclosure Letter, make or authorize any payment of, or accrual or commitment for, capital expenditures, except any such expenditure (A) not in excess of $25 million in the aggregate during any consecutive twelve (12) month period (other than capital expenditures within the thresholds set forth in Section 7.1(b)(ix) of such Party’s Disclosure Letter), (1B) pursuant expenditures not in excess of $10 million (net of insurance proceeds) in the aggregate that such Party reasonably determines are necessary to avoid a material business interruption or maintain the forfeiture of, safety and integrity of any asset or withholding property or (C) paid by any direct or indirect wholly owned Subsidiary to such Party or to any other direct or indirect wholly owned Subsidiary of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Unitssuch Party, in each case in accordance with past practice response to any unanticipated and subsequently discovered events, occurrences or developments (provided that such Party will use its reasonable best efforts to consult with the terms other Party prior to making or agreeing to any such capital expenditure);
(x) other than in the Ordinary Course, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, adversely amend, modify, supplement or waive, terminate, assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract other than (A) expirations and renewals of any such Contract in the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement Ordinary Course in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofContract, (B) grant or provide any transaction or retention bonuses non-exclusive licenses, covenants not to any director▇▇▇, officerreleases, employee waivers or other service provider of the Company non-exclusive rights under Intellectual Property owned by Versum and its Subsidiaries or Entegris or any of its Subsidiaries, as applicable, in each case, granted in the Ordinary Course, or (C) increase the compensation, bonus any agreement among such Party and its direct or pension, welfare indirect wholly owned Subsidiaries or other benefits of any director, officer among such Party’s direct or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its indirect wholly owned Subsidiaries;
(ivxi) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) than in the ordinary course of business consistent Ordinary Course or with past practice in a principal amount respect to amounts that are not material to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company such Party and its Subsidiaries, taken as a whole, than existing Indebtednesscancel, modify or waive any debts or claims held by it or any of its Subsidiaries or waive any rights held by it or any of its Subsidiaries except debts or claims among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xii) settle or compromise, or offer or propose to settle or compromise any material Proceeding, including before a Governmental Entity, except in accordance with a maturity date the parameters set forth in Section 7.1(b)(xii) of such Party’s Disclosure Letter; provided that no more than 10 years such settlement or compromise, or offer in respect thereof, may involve any injunctive or other non-monetary relief which, in either case, imposes any material restrictions on the business operations of such Party and its Subsidiaries or Affiliates, or, after the date of Effective Time, the Contract evidencing such IndebtednessCombined Company;
(xiii) materially amend any material financial accounting policies or procedures, except as required by changes to GAAP;
(Bxiv) except enter into any material closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or dispute materially in excess of the Bridge Facilityamount reserved therefore, in replacement surrender any right to claim a refund of a material amount of Taxes, or fail to file when due (taking into account any available extensions) any material Tax Return;
(xv) transfer, sell, lease, divest, cancel, abandon, allow to lapse or expire or otherwise dispose of, or permit or suffer to refinanceexist the creation of any Encumbrance upon, existing Indebtedness on then prevailing market terms any assets (tangible or on terms substantially consistent with intangible), product lines or more beneficial businesses material to the Company it and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi))Subsidiaries, except for in connection with (A) sales of or non-exclusive licenses of the foregoing provided in the Ordinary Course, (B) sales of obsolete assets, (C) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiariesnot including services) with a fair market value not in excess of $50,000,000 individually if the transaction is not 15 million in the ordinary course or $100,000,000 individually aggregate other than pursuant to Material Contracts in any event or (B) transactions among effect prior to the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transferdate of this Agreement, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable entered into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on after the date of this Agreement in accordance with this Agreement and (D) sales among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xvi) except as required by the existing terms of any Benefit Plan as in effect on the date hereof, as permitted under this Agreement or as required by applicable Law, increase or change the compensation or benefits payable to any Employee other than in the Ordinary Course; provided that, notwithstanding the foregoing, except as expressly disclosed in Section 7.1(b)(xvi) of such Party’s Disclosure Letter or required pursuant to a Versum Benefit Plan or Entegris Benefit Plan, as applicable, in effect as of the date of this Agreement, the Parties shall not: (A) grant any new long-term incentive or equity-based awards and or amend or modify the Company Stock Plansterms of any such outstanding awards under any Versum Benefit Plan or Entegris Benefit Plan, as applicable, (B) Investment Preferred Stock (as defined in the Bridge Facility) grant any retention or transaction bonuses, (C) increase or change the compensation or benefits payable to any executive officer (other than (x) changes in health and welfare benefits that are generally applicable to all salaried Employees in the Ordinary Course or (y) increases in the base salaries and benefits of any executive officer in the Ordinary Course), (D) terminate, enter into, amend or renew (or communicate any intention to take such action) any material Benefit Plan, other than routine amendments to health and welfare plans (other than severance plans) that do not materially increase benefits or result in a material increase in administrative costs, or, other than as permitted by wholly owned Subsidiaries Section 7.1(b)(xvi) of such Party’s Disclosure Letter, adopt any compensation or benefit arrangement that would be a material Benefit Plan if it were in existence as of the date of this Agreement, (E) accelerate the vesting of any compensation for the benefit of any Employee, (F) increase or change the severance terms applicable to any Employee, (G) take any action to fund or secure the payment of any amounts under any Benefit Plan, (H) other than as required by GAAP, change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, or increase or accelerate the funding rate in respect of any Benefit Plan, or (I) terminate the employment of any executive officer (other than for cause) or hire any new executive officer (other than as a replacement hire receiving substantially similar terms of employment); provided, that, to the Company or extent that a Party intends to hire an individual to replace a named executive officer of such Party, such Party shall first consult in good faith with the other Party prior to, and with respect to, the hiring of such individual;
(xvii) recognize any other wholly owned Subsidiary Labor Organization as the representative of any of the Company; provided thatemployees of the Party or its Subsidiaries, or become a party to, establish, adopt, amend, commence negotiations for or terminate any collective bargaining agreement or other similar written agreement with a Labor Organization, in each case, other than in the avoidance of doubt, granting customary profit participation rights Ordinary Course or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant as required by applicable Law;
(xviii) incur any Indebtedness (including the issuance of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any optionsdebt securities, warrants or other rights to acquire, acquire any debt security) or guarantee any such shares Indebtedness, except for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not Indebtedness for borrowed money incurred in the ordinary course Ordinary Course under Versum’s or Entegris’s, as applicable, revolving credit facilities and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase other lines of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value credit existing as of the date of this Agreement, (B) guarantees by Versum or any direct or indirect wholly owned Subsidiary of Versum of Indebtedness of Versum or any other direct or indirect wholly owned Subsidiary of Versum, (C) guarantees by Entegris or any direct or indirect wholly owned Subsidiary of Entegris of Indebtedness of Entegris or any other direct or indirect wholly owned Subsidiary of Entegris, (D) Indebtedness incurred in connection with a refinancing or replacement of existing Indebtedness (but in all cases which refinancing or replacement shall not increase the aggregate amount of Indebtedness permitted to be outstanding thereunder and in each case on customary commercial terms consistent in all material respects with the Indebtedness being refinanced or replaced), (E) Indebtedness incurred pursuant to letters of credit, performance bonds or other similar arrangements in the Ordinary Course, (F) interest, exchange rate and commodity swaps, options, futures, forward contracts and similar derivatives or other hedging Contracts (1) not entered for speculative purposes and (2) entered into in the Ordinary Course and in compliance with its risk management and hedging policies or practices in effect on the date of this Agreement (G) Indebtedness incurred by mutual agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made Parties in accordance with Section 5.01(b)(v7.7 or (H) and other than purchases and licenses of film and television and production programming (includinIndebtedness in
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Versum Materials, Inc.), Merger Agreement (Entegris Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement until the earlier of the Gulf Effective Time and prior the termination of this Agreement pursuant to Article VIII, the Company shall, and shall cause each of its Subsidiaries to, conduct their respective businesses in the Ordinary Course and, to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees and business associates and others having material significant business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) them and keep available the services of the Company its and its Subsidiaries’ present officers, employees and agents.
, except, in each case, as otherwise expressly contemplated by this Agreement, as required by applicable Law, or otherwise approved in writing by Parent (b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed). Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the earlier of the Gulf Effective Time and which determination shall take into account the Company Overview Presentationtermination of this Agreement pursuant to Article VIII, and except as otherwise expressly (1A) contemplated by this Agreement, (B) required by applicable Law, (2C) expressly as approved in writing by Parent (which approval shall not be unreasonably withheld, conditioned or delayed), (D) required by the Transaction Documents (including in connection with the Separation and the Distribution) under any Material Contract or (3E) otherwise expressly disclosed set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall not and shall not permit any of cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly owned Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets from any other Person with a fair market value or purchase price in excess of $500,000 individually or $1,000,000 in the aggregate in any transaction or series of related transactions, in each case, including any amounts or value reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company or Parent, as applicable, to consummate the Transactions prior to the Outside Date;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or of any of its Subsidiaries (other than in the case of clause (A)), (A) amend the F▇▇▇▇▇▇▇ Agreement or (B) the issuance of shares (i) by its certificate wholly owned Subsidiary to it or another of incorporation its wholly owned Subsidiaries, (ii) in respect of Company RSUs outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Company Stock Plan as in effect on the date of this Agreement or bylaws (iii) in connection with the exercise of warrants outstanding as of the date of this Agreement, or comparable governing documentssecurities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance having a value in excess of $200,000 individually or $500,000 in the aggregate on any of its assets or any of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than amendments to the governing documents of any Subsidiary of or from the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify and any of its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary Subsidiaries or to or from Parent and any of the Company which remains a its wholly owned Subsidiary after consummation Subsidiaries, as applicable) in excess of such transaction), $200,000 individually or $500,000 in the aggregate;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary);
(viii) reclassify, split, combine, subdivide or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, shares of Company Restricted Common Stock Units, to satisfy withholding Tax obligations upon the vesting or settlement of Company Deferred Stock Units or Company Performance Stock Units, in each case RSUs outstanding as of the date of this Agreement in accordance with past practice and with the their terms of and, as applicable, the Company Stock Plans Plan as in effect on the date of this Agreement Agreement;
(ix) incur any Indebtedness (including the issuance of any debt securities, warrants or as modified after other rights to acquire any debt security), except for (A) Indebtedness for borrowed money incurred in the Ordinary Course not to exceed $200,000 individually or $500,000 in the aggregate, or (B) Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced;
(x) except to the extent expressly provided by, and consistent with the line items set forth in, the Company’s capital budget set forth in Section 6.1(a)(x) of the Company Disclosure Letter, make or authorize any payment of, or accrual or commitment for, capital expenditures;
(xi) enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement or amend or modify in any material respect, supplement, waive any material term, terminate, assign, convey, encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Company Material Contract, other than expirations of any such Contract in the Ordinary Course in accordance with the terms of this Agreementsuch Contract;
(xii) cancel, modify or waive any debts or claims held by it or any of its Subsidiaries or waive any rights held by it or any of its Subsidiaries having in each case a value in excess of $200,000 individually or $500,000 in the aggregate;
(2xiii) purchases, repurchases, redemptions settle any Proceeding for an amount in excess of $200,000 individually or other acquisitions $500,000 in the aggregate or any obligation or liability of securities it in excess of such amount or on a basis that would result in the imposition of any wholly owned Subsidiary Governmental Order that would restrict the future activity or conduct of it or any of its Subsidiaries in any material respect or a finding or admission of a material violation of Law or material violation of the rights of any Person;
(xiv) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP or applicable Law;
(xv) enter into any line of business in any geographic area, other than the existing lines of business of the Company by and its Subsidiaries solely within the United States;
(xvi) materially modify, cancel, terminate, rescind or adversely affect any Company Material License;
(xvii) other than in the Ordinary Course, make, change or revoke any material Tax election, change any annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return in respect of material Taxes, enter into any closing agreement with respect to Taxes or settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a material refund, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax, or take any other action with respect to Taxes which is reasonably likely to result in a material increase in the Tax liability of the Company or its Subsidiaries, or, in respect of any other wholly owned Subsidiary taxable period (or portion thereof) ending after the Closing Date, the Tax liability of the Company)Parent or its Affiliates;
(iixviii) merge transfer, sell, lease, divest, cancel or consolidate with any other Personotherwise dispose of, or restructure, reorganize permit or completely or partially liquidate (other than transactions suffer to exist the creation of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation ofany Encumbrance upon, any wholly owned Subsidiaries of the Company that would not preventassets (tangible or intangible), materially delay product lines or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider businesses of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee including capital stock of the Company or and any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests services provided in connection with the production or financing of film Ordinary Course and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company obsolete assets and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or tangible assets (excluding capital stock of the Retained Subsidiariesnot including services) with a fair market value not in excess of $50,000,000 200,000 individually if the transaction is not or $500,000 in the ordinary course aggregate;
(xix) cancel, abandon or $100,000,000 individually otherwise allow to lapse or expire any material Company Intellectual Property Rights that are Registered;
(xx) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or in the Ordinary Course, (A) increase the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any event or Company Employee, (B) transactions among become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Company and Benefit Plan, (D) take any action to accelerate the Retained Subsidiariesvesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, (E) forgive any loans or issue any loans (other than routine travel advances issued in the Ordinary Course) to any Company Employee or (F) hire any employee or engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees in excess of $250,000;
(viiixxi) except become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(xxii) utilize government borrowing, grant programs, or social insurance programs, such as the CARES Act, in each case related to the COVID-19 pandemic;
(xxiii) make or authorize any payment or spending, or accrual or commitment for any payment or spending (including payment or spending with respect to SpinCo advertising and marketing activities), in connection with entering into any new geographic area or new line of business;
(xxiv) apply or seek to apply for any license that, if granted, would be reasonably expected to be a Company Material License had it been granted prior to date of this Agreement; or
(xxv) agree, authorize or commit to do any of the foregoing. Notwithstanding the foregoing, any action or inaction taken by the Company or any of its Subsidiaries, to the extent required by applicable Law, directive, guidelines or recommendations, to address the COVID-19 pandemic (including, to the extent required by applicable Law, compliance with any quarantine, “shelter in place,” “stay at home,” social distancing, shut down, closure, sequester, safety, or similar Law, directive, guidelines or recommendations promulgated by any Governmental Entity, including the Centers for Disease Control that is outside of the Ordinary Course shall not be deemed to be a breach of this Section 6.1, provided that the Company consults with Parent prior to taking any such action.
(b) Parent covenants and agrees as to itself and its Subsidiaries that, from the date of this Agreement until the earlier of the Gulf Effective Time and the SpinCo Subsidiariestermination of this Agreement pursuant to Article VIII (unless the Company shall otherwise approve in writing (which approval shall not be unreasonably withheld, issueconditioned or delayed)), deliverexcept as otherwise expressly (A) contemplated by this Agreement, sell(B) required by applicable Law, grant(C) required under Contracts to which Parent or any of its Subsidiaries is a party or (D) set forth on Section 6.1(b) of the Parent Disclosure Letter, transferParent shall not, and shall cause its Subsidiaries not to:
(i) adopt or propose any change in Parent’s Organizational Documents in any manner that would prohibit the consummation of the Transactions; provided, that any amendment to Parent’s articles of incorporation to increase the authorized number of shares or series of the capital stock of Parent shall in no way be restricted by the foregoing;
(ii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary to it or to any other direct or indirect wholly owned Subsidiary);
(iii) split, combine, reduce or reclassify any of its issued or unissued shares of its capital stock, or encumber, issue or authorize the issuanceissuance of any other securities in respect of, delivery, sale, grant, transfer in lieu of or encumbrance ofin substitution for, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided manner that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair to have a material and adverse impact on the consummation value of the Transactions;Parent Class A Common Stock; or
(xiv) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent or the Company, directly or indirectly, the right to control or direct the other than capital expenditures made Party’s operations prior to the Gulf Effective Time. Prior to the Gulf Effective Time, each Party will exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations. Notwithstanding anything in accordance this Agreement to the contrary, no consent of Parent or the Company shall be required with respect to any matter set forth in this Section 5.01(b)(v) and other than purchases and licenses 6.1 or elsewhere in this Agreement to the extent that the requirement of film and television and production programming (includinsuch consent would, upon the advice of legal counsel, violate applicable Antitrust Law.
Appears in 2 contracts
Sources: Merger Agreement (DraftKings Inc.), Merger Agreement (Golden Nugget Online Gaming, Inc.)
Interim Operations. (a) The Each of the Company and EFIH covenants and agrees as to itself and each of its Subsidiaries (other than the Oncor Entities and other than with respect to any entities, assets or liabilities to be contributed to Reorganized TCEH in the Reorganized TCEH Contributions or pursuant to the Plan of Reorganization) that, from and after except (i) as otherwise specifically permitted or required by the execution provisions of this Agreement and prior the Plan of Reorganization, and any action reasonably necessary to effectuate the First Effective Time Reorganized TCEH Spin-Off, the Reorganized TCEH Contributions, the Preferred Stock Sale and the Reorganized TCEH Conversion, (unless ii) as Parent shall otherwise may approve in writingwriting (such approval, which approval shall not to be unreasonably withheld, conditioned delayed or delayedconditioned), and except (iii) as (1) is required by any applicable LawLaw or any Governmental Entity; provided that, to the extent legally permissible, the Company or EFIH shall provide prompt written notice to Parent of any such requirement; (2iv) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a6.1(a) of the Company Disclosure Letter, or (v) as required by the Bankruptcy Court in the Chapter 11 Cases without any of the Debtors having requested or applied (or having requested that any of their respective Affiliates make such request or application) for the Bankruptcy Court to impose such requirement (and with the Company and EFIH, to the extent requested by Parent prior to such imposition, having used commercially reasonable efforts to challenge such imposition before the Bankruptcy Court), in each case after the date hereof and prior to the earlier of the Termination Date (as defined below) and the Effective Time, each of the Company and EFIH shall, and shall cause each of its their respective Subsidiaries (other than the Oncor Entities and other than with respect to any entities, assets or liabilities to be contributed to Reorganized TCEH in the Reorganized TCEH Contributions or the Plan of Reorganization) to, conduct its business and the Chapter 11 Cases in accordance with the Bankruptcy Code and the orders of the Bankruptcy Court and use its reasonable best efforts to conduct the Retained Business in the ordinary course of preserve its business consistent with past practiceorganizations intact, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, associates. Notwithstanding the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement until the earlier of the Termination Date and prior the Effective Time, except (A) as otherwise specifically permitted or required by the provisions of this Agreement and the Plan of Reorganization, and any action reasonably necessary to effectuate the First Effective Time Reorganized TCEH Spin-Off, the Reorganized TCEH Contributions, the Preferred Stock Sale and the Reorganized TCEH Conversion, (unless B) as Parent shall otherwise may approve in writingwriting (such approval, which approval shall not to be unreasonably withheld, conditioned delayed or delayedconditioned), and which determination shall take into account the Company Overview Presentation, and except (C) as (1) is required by any applicable LawLaw or any Governmental Entity, (2D) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed as set forth in Section 5.01(b6.1(a) of the Company Disclosure LetterLetter or (E) as required by the Bankruptcy Court in the Chapter 11 Cases without any of the Debtors having requested or applied (or having requested that any of their respective Affiliates make such request or application) for the Bankruptcy Court to impose such requirement (and with the Company and EFIH, to the extent requested by Parent prior to such imposition, having used commercially reasonable efforts to challenge such imposition before the Bankruptcy Court), each of the Company shall and EFIH will not and shall will not permit any of its respective Subsidiaries (other than the Oncor Entities and other than with respect to any asset, liability or entity to be contributed to Reorganized TCEH in the Reorganized TCEH Contributions or pursuant to the Plan of Reorganization) to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt any change in the case of clause (A)), (A) amend its certificate of incorporation incorporation, bylaws, limited liability company agreement or bylaws other applicable governing instruments;
(ii) merge or comparable governing documentsconsolidate with any other Person;
(iii) (adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization other than amendments to the governing documents Plan of Reorganization;
(iv) make any acquisition of any Subsidiary assets or Person for a purchase price individually or in the aggregate in excess of $10,000,000;
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber or authorize the Company that would not preventissuance, delay sale, pledge, disposition, grant, transfer, lease, license, guarantee or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect encumbrance of any shares of its capital stock or other equity interests (except for other than (1A) any dividends or distributions paid the issuance of shares of EFH Common Stock upon the settlement of awards under the Company Stock Plans (and dividend equivalents thereon, if applicable), (B) the issuance of equity interests by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company, or (C) pursuant to the modification, replacement, refunding, renewal, extension or refinancing of EFIH’s first lien debtor-in-possession financing facility or the modification, replacement, refunding, renewal, extension or refinancing thereof (provided that any modification, replacement, refunding, renewal, extension or refinancing shall not be for an amount greater than the then current outstanding principal amount thereof except by an amount equal to the unpaid accrued interest and premium thereon plus the reasonable amounts paid in respect of fees and expenses incurred in connection with such modification, replacement, refunding, renewal, extension or refinancing), or, securities convertible or exchangeable into or exercisable for any shares of such capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other equity interests or such convertible or exchangeable securities;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than in or to the Company or any direct or indirect wholly owned Subsidiary of the Company) individually or in the aggregate in excess of $10,000,000;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity interests (except for dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to another any other direct or indirect wholly owned Subsidiary of the Company Company) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stockstock or other equity interests or take any action that would result in the Company or any of its Subsidiaries becoming subject to any restriction not in existence on the date hereof with respect to the payment of distributions or dividends;
(viii) reclassify, split, combine or (E) purchasesubdivide, repurchasedirectly or indirectly, redeem or otherwise acquire any shares of its capital stock stock, equity interests or any securities convertible or exchangeable into or exercisable for any shares of its capital stock or equity interests;
(other than (1ix) pursuant to the forfeiture ofrepurchase, redeem or otherwise acquire, or withholding offer to repurchase, redeem or otherwise acquire, any of Taxes with respect toits capital stock or equity interests or any securities of convertible into or exchangeable or exercisable for capital stock or equity interests, Company Restricted Stock Unitsor any warrants, Company Deferred Stock Units or Company Performance Stock Unitscalls, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions options or other acquisitions rights to acquire any such capital stock, securities or interests;
(x) repurchase, redeem, defease, cancel, prepay, forgive, issue, sell, incur or otherwise acquire any indebtedness for borrowed money or any debt securities or rights to acquire debt securities, of securities of any wholly owned Subsidiary of the Company by the Company or any of its Subsidiaries other than pursuant to the Plan of Reorganization, or assume, guarantee or otherwise become responsible for such indebtedness of another Person (other than a wholly owned Subsidiary of the Company), except for indebtedness for borrowed money (A) incurred or repaid under EFIH’s first lien debtor-in-possession financing facility or the modification, replacement, refunding, renewal, extension, repayment or refinancing (subject to clause (v) above) thereof, in each case, to the extent approved by the Bankruptcy Court in the Chapter 11 Cases, or (B) incurred by drawing under outstanding letters of credit;
(iixi) merge (A) grant to any Employee or consolidate with any member of the board of directors (or similar governing body) or consultant any increase in compensation or benefits other Personthan increases in the ordinary course of business, (B) grant to any Employee or any member of the board of directors (or similar governing body) or consultant any increase in change in control, severance or termination pay, (C) amend in any material respect or terminate any Assumed Plan or the EFH Retirement Plan or related agreement thereunder or establish, adopt, enter into any plan or related agreement that would be a Benefit Plan if in existence on the date hereof and, in the case of a Contributed Plan, other than in the ordinary course of business, or restructurewith respect to any actions taken to terminate and wind-down any Discharged Plan or as otherwise required under the terms of this Agreement, reorganize (D) take any action to accelerate the time of vesting, funding or completely payment of any compensation or partially liquidate benefits under any Assumed Plan or EFH Retirement Plan or related agreement thereunder (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers any plan or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company related agreement that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company be an Assumed Plan as if in effect existence on the date hereof: ); provided that with respect to the EFH Retirement Plan, such actions may be taken between the date hereof and the effective date of the Split Participant Agreement that are consistent with that certain Separation Agreement between TXU Corporation and Oncor Holdings dated October 10, 2007, and provided further that with respect to the Discharged Plans, such actions may be taken that are in furtherance of the confirmation of a plan of reorganization or the termination and wind-down of such Discharged Plans, (E) grant any new awards, or any outstanding awards, under any Assumed Plan or related agreement thereunder (or any plan or related agreement that would be an Assumed Plan if in existence on the date hereof), or (F) enter into or amend any collective bargaining agreement or other agreement with a labor union, works council or similar organization, except in the case of the foregoing clauses (A) establish, adopt, amend or terminate any material Company Plan or amend through (F) for actions required pursuant to the terms of any outstanding equity-based awards other than Benefit Plan, or in accordance with the terms and conditions of this Agreement or applicable Law; provided, however, that following the date of this Agreement, the Company and EFIH may, and may permit any of their respective Subsidiaries to, hire any individual or engage any individual, as an interim employee through a third party staffing agency or as an independent contractor or consultant, with such action taken engagements to end in all instances prior to the Closing Date, to the extent reasonably necessary for purposes the Company’s operations between the TCEH Effective Date and the Closing, and may, notwithstanding anything contained in this Agreement to the contrary, provide compensation and benefits that, for all such persons as a group, (i) does not exceed $15,000,000 in the aggregate in any annual period and (ii) does not impose any liability on the reorganized Company and its Subsidiaries following the Closing;
(xii) make or authorize any capital expenditure in an amount in excess of replacing$1,000,000, renewing in the aggregate, during any 12 month period;
(xiii) make any material changes with respect to its financial accounting methods, principles, policies, practices or extending a broadly applicable material Company Plan procedures, except as required by Law or by changes in GAAP;
(xiv) make (excluding any elections made (a) in the ordinary course of business consistent with past practice that does not materially increase or (b) under Section 168(k) of the cost Code) or change any material Tax election, change any material method of such Company Plan Tax accounting, settle or benefits provided under such Company Plan based on compromise any material Tax liability, claim or assessment or agree to an extension or waiver of the cost on the date hereof, (B) grant or provide any transaction or retention bonuses limitation period to any directormaterial Tax claim or assessment, officergrant any power of attorney with respect to material Taxes, employee enter into any closing agreement with respect to any material Tax or other service provider refund, amend any material Tax Return, or surrender any right to claim a material Tax Refund of the Company or any of its Subsidiaries, (C) increase the compensationin each case, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or such actions agreed to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive connection with any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants audit or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted Tax proceedings disclosed in Section 5.01 6.1(a)(xiv) of the Company Disclosure Letter; provided, furtherhowever, that the Company full details of any such actions shall consult with be disclosed to Parent if such actions would result in the inclusion of any material item of income in, or the exclusion of any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date which taxable income was realized (and reflects economic income arising) prior to incurring Indebtedness under this clause the Closing Date;
(G)xv) waive, release, assign, settle or compromise any pending or threatened claim, action, suit or proceeding against the Company or any of its Subsidiaries other than settlements or compromises (HA) Indebtedness assumed that would result in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the payment by the Company and its SubsidiariesSubsidiaries of less than $10,000,000 in the aggregate, taken as a whole, than and (B) that do not entail the Indebtedness being replaced acceptance or refinanced; provided, further, that imposition of any material restrictions on the business or operations of the Company shall consult with Parent prior or its Subsidiaries;
(xvi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to incurring Indebtedness under this clause (H)lapse or expire or otherwise dispose of any assets, (I) any amendment, refinancing product lines or renewal businesses of the existing revolving and term loan facilities Company or its Subsidiaries with a fair market value in excess of $10,000,000 in the YES Facility and any refinancing thereofaggregate for all such actions, other than (A) sales of obsolete goods or equipment, or (B) cancellation of, abandonment of, allowing to lapse or expire, or the licensing or sublicensing of, material Intellectual Property, in each caseof (A) and (B) , so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection accordance with a Sky Acquisition and not for speculative purposesthe Bankruptcy Code or the orders of the Bankruptcy Court; provided provided, however, that in no event shall the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness or any of the type described in clauses its Subsidiaries (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businessesthe Oncor Entities) transfer, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfersell, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses capital stock or ordinary course security other equity interests of any of their respective Subsidiaries other than in connection with the production modification, replacement, refunding, renewal, extension or refinancing (subject to clause (v) above) of EFIH’s first lien debtor-in-possession financing of film and television programming or video game productionfacility;
(xvii) except as permitted by clause (v)(C) above, letting lapseenter into, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event terminate (other than at the end of a term), renew or materially extend or amend any Company Material Contract or Contract (other than the Interim TSA (as such is defined in the Separation Agreement) that, if in effect on the date hereof, would be a Company Material Contract; or waive any material default under, or release, settle or compromise any material claim against the Company or any of its Subsidiaries or liability or obligation owing to the Company or any of its Subsidiaries, under any Company Material Contract or Contract (other than the Interim TSA)) that, if in effect on the date hereof, would be a Company Material Contract, other than pursuant to the Plan of Reorganization;
(xviii) enter into any Contract that contains a change of control or similar provision that would require a payment to any Person counterparty thereto in connection with the consummation of the transactions among contemplated by this Agreement that would not otherwise be due;
(xix) fail to maintain in full force and effect material insurance policies covering the Company and its wholly owned Retained Subsidiaries)Subsidiaries (other than the Oncor Entities) and their respective properties, (D) licenses, sales, letting lapse, abandonment assets and cancellations of Intellectual Property that is used or held for use exclusively businesses in the SpinCo Business a form and (E) Affiliation Agreements;amount consistent with past practice; or
(viixx) with respect agree, authorize or commit to do any of the foregoing.
(b) Notwithstanding anything in Section 6.1(a) to the Retained Businesscontrary, transferthe Company and its Subsidiaries may take commercially reasonable actions consistent with prudent industry practices that would otherwise be prohibited pursuant to Section 6.1(a) in order to prevent the occurrence of, leaseor mitigate the existence of, licensean emergency situation involving endangerment of life, sellhuman health, assignsafety or the Environment or the protection of equipment or other assets; provided, let lapsehowever, abandon, cancel, mortgage, pledge, place a Lien upon that the Company shall provide Parent with notice of such emergency situation and any such action taken by the Company or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(vthe Oncor Entities) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinsoon as rea
Appears in 2 contracts
Sources: Merger Agreement (Nextera Energy Inc), Merger Agreement (Energy Future Intermediate Holding CO LLC)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, that from and after the execution date of this Agreement and prior to until the First Effective Time (Time, unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed), and except as (1) otherwise expressly contemplated by this Agreement or as required by applicable LawLaws, the business of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company and its Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain their existing relations and goodwill with Governmental Entities, customers, manufacturers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of the present employees and agents of the Company and its Subsidiaries. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (2i) as otherwise expressly required by the Transaction Documents this Agreement, (including ii) as Parent may approve in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) writing or (3iii) otherwise expressly disclosed as set forth in Section 5.01(a6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in any provision of the Company Governing Documents;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company that are not obligors or guarantors of third-party indebtedness;
(c) acquire assets outside of the ordinary course of business from any other Person with an aggregate value or purchase price in excess of $125,000, other than capital expenditures within the Company’s capital expenditure budget as set forth in Section 6.1(c) of the Company Disclosure Letter), ;
(d) enter into any material line of business other than the line of business in which the Company shalland its Subsidiaries is currently engaged as of the date of this Agreement or distribute products other than the type of products that the Company and its Subsidiaries are currently distributing as of the date of this Agreement;
(e) issue, and shall cause each sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of or other equity interest in the Company or any of its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company), or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other equity interest;
(f) other than in the ordinary course of business, create or incur any Lien material to the Company or any of its Subsidiaries on any assets used in the businesses of the Company or any of its Subsidiaries having a value in excess of $125,000;
(g) make any loans, advances or capital contributions to, use or investments in, any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company) in excess of $125,000 in the aggregate;
(h) declare, set aside or pay any dividend or distribution (whether in cash, stock or property or any combination thereof) with respect to any shares of capital stock of any Subsidiary, except for dividends or distributions by any direct or indirect wholly owned Subsidiaries of the Company and pro rata dividends or distributions payable to holders of interests in non wholly owned Subsidiaries;
(i) reclassify, split (including a reverse split), recapitalize, subdivide or repurchase, redeem or otherwise acquire, directly or indirectly, any of its capital stock;
(j) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries or enter into any capital lease, except for (A) indebtedness for borrowed money incurred in the ordinary course of business under the Company’s existing revolving credit facility (or any replacement facility therefor) not to exceed $50,000,000 in the aggregate, (B) refinancings on commercially reasonable best efforts terms or (C) guarantees by the Company of indebtedness of wholly owned Subsidiaries of the Company or guarantees by Subsidiaries of indebtedness of the Company;
(k) except as set forth in Section 6.1(k) of the Company Disclosure Letter, make or authorize any capital expenditure;
(l) other than in the ordinary course of business, enter into any Contract that would have been a Material Contract had it been entered into prior to conduct the Retained Business date of this Agreement (other than as permitted by Section 6.1(j));
(m) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP or Regulation S-X promulgated under the Exchange Act, based upon the advice of its independent auditors after consultation with Parent;
(n) settle any pending or threatened civil, criminal or administrative actions, suits, claims, litigations, arbitrations, investigations or other proceedings for an amount to be paid by the Company or any of its Subsidiaries in excess of $150,000 or which would be reasonably likely to have any adverse impact on the operations of the Company or any of its Subsidiaries, or indemnify any Person other than pursuant to a contractual obligation to do so;
(o) other than in the ordinary course of business, (A) amend or modify in any material respect, or terminate or waive any material right or benefit under, any Material Contract (other than as permitted by Section 6.1(j)) or in respect of any pending or threatened civil, criminal or administrative actions, suits, claims, litigations, arbitrations, investigations or other proceedings, or (B) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $250,000;
(p) except as required by Law, make any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement or adopt any method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods or settle or compromise any material tax liability;
(q) sell, transfer, lease, license or otherwise dispose of any assets of the Company or its Subsidiaries except in the ordinary course of business or obsolete assets;
(r) notwithstanding anything to the contrary in this Section 6.1, sell, lease, abandon, transfer, dispose of, license or grant material rights under any material Company IP Rights or materially modify any existing rights with respect thereto, except in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take enter into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
settlement regarding (i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents infringement of any Subsidiary of material Company IP Rights or (ii) the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect breach of any shares license agreements governing use of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)material IP Rights;
(iis) merge or consolidate with any other Personterminate, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, enter into, make any new grants or awards under, amend or terminate otherwise modify, or accelerate vesting or payment under any material Company Plan Benefit Plans or amend the terms of enter into any outstanding equity-based awards other than any such action taken for purposes of replacingnew employment or compensatory agreements or arrangements with, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofsalary, (B) grant or provide any transaction or retention bonuses to any directorwage, officer, employee bonus or other service provider compensation payable or to become payable to, any directors, officers, employees or consultants of the Company or any of its the Subsidiaries;
(t) adopt a plan of complete or partial liquidation, (C) increase the compensationdissolution, bonus or pensionrestructuring, welfare recapitalization or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees reorganization of the Company or any of its Subsidiaries;
(ivu) incur take any Indebtedness action, including the adoption of any shareholder rights plan, which would, directly or issue any warrants indirectly, restrict or other impair the ability of Parent or Merger Sub to vote, or otherwise to exercise the rights to acquire any Indebtedness, except (A) in the ordinary course and benefits of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except shareholder with respect to the Bridge Facilityto, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations securities of the Company acquired or any of its Subsidiaries controlled or to be acquired or controlled by Parent or Merger Sub in accordance with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtednessthis Agreement; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;or
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make agree or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Lowrance Electronics Inc), Merger Agreement (Simrad Yachting As)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use from and after the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article IX (unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), and except as otherwise expressly required by this Agreement or as required by a Governmental Entity or applicable Law and any Material Contract in effect prior to the date of this Agreement), conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course Ordinary Course of business Business and, to the extent consistent with past practicetherewith, shall use and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use their respective commercially reasonable efforts to preserve the Retained Businessmaintain its and its Subsidiaries’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees, agents and business associates; provided that, during any period of full or partial suspension of operations in response to COVID-19 or any COVID-19 Measures, the Company or any of its Subsidiaries may, in response to COVID-19 or any COVID-19 Measures, take such actions as are reasonably necessary (x) to protect the health and safety of the Company’s or its Subsidiaries’ employees and business associates and others other individuals having material business dealings with the Retained Business Company or any of its Subsidiaries or (including material content providersy) to respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersin each case of clause (x) and keep available (y), subject to reasonable prior consultation with Parent to the services of the Company and its Subsidiaries’ present employees and agents.
(b) extent reasonably practicable. Without limiting the generality of, of and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatforegoing sentence, from and after the date of this Agreement and prior to until the First earlier of the Effective Time (unless Parent shall otherwise approve in writingand the termination of this Agreement pursuant to Article IX, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) otherwise expressly required by this Agreement, as required by a Governmental Entity or applicable Law, as approved in writing by Parent (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distributionsuch approval not to be unreasonably conditioned, withheld or delayed) or (3) otherwise expressly disclosed set forth in the corresponding subsection of Section 5.01(b7.1(a) of the Company Disclosure Letter)Schedule, the Company shall not and shall not permit any of cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its properties, assets, operations or businesses;
(iii) acquire, directly or indirectly by merger, consolidation, acquisition of stock or assets or otherwise, any business, Person, properties or assets, other than acquisitions of inventory or other goods in the Ordinary Course of Business;
(iv) transfer, sell, license, lease, divest, cancel or otherwise dispose of, or incur, permit or suffer to exist the creation of any Encumbrance (other than any Permitted Encumbrance) upon, any properties or assets (tangible or intangible, including any Intellectual Property Rights), product lines or businesses of the Company or any of its Subsidiaries, including capital stock or other equity interests of any of its Subsidiaries, except in connection with (A) sales of obsolete assets, (B) nonexclusive licenses granted by the Company or its Subsidiaries with respect to SpinCo Intellectual Property Rights in the Ordinary Course of Business and (C) sales of inventory or other goods in the SpinCo Subsidiaries Ordinary Course of Business;
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or otherwise enter into any Contract or other agreement, understanding or arrangement (whether oral or written) with respect to the voting of, any shares of capital stock of the Company (including, for the avoidance of doubt, Shares) or capital stock or other equity interests of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such shares of capital stock, other equity interests or such convertible or exchangeable securities (other than in the case of clause (A)), (A) amend its certificate proxies or voting agreements solicited by or on behalf of incorporation the Company in connection with the Company’s annual meeting of stockholders or bylaws (B) the issuance of shares of such capital stock, other equity securities or comparable governing documentsconvertible or exchangeable securities (1) (other than amendments to the governing documents of any by a Wholly Owned Subsidiary of the Company that would not preventto the Company or another Wholly Owned Subsidiary of the Company or (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, delay as applicable, the Stock Plans in effect on the Capitalization Date);
(vi) make any loans, advances, guarantees or impair capital contributions to or investments in any Person (other than to or from the Initial Merger Company and any of its Wholly Owned Subsidiaries) and for loans or advances made to directors, officers and other employees of the Company and its Subsidiaries (x) for business-related travel, other business-related expenses, in each case, in the Ordinary Course of Business or (y) pursuant to the indemnification and advancement rights of such Persons in effect as of the date of this Agreement under any agreement between or among such Person and the Company or any Subsidiary thereof, correct and complete copies of which have been made available to Parent, or the Organizational Documents of the Company or any Subsidiary thereof;
(vii) declare, set aside, make or pay any dividend or other Transactionsdistribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity interests (including with respect to the Company, for the avoidance of doubt, Shares), except for dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company and for regular quarterly dividends declared and paid at such times and in such amounts as is consistent with historical practice over the twelve-month period prior to the date of this Agreement (Bbut under no circumstances in an amount that exceeds $0.175 per Share per calendar quarter);
(viii) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, other equity interests or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests (other than (1) pursuant including with respect to the forfeiture Company, for the avoidance of doubt, Shares);
(ix) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for Indebtedness in replacement of existing Indebtedness for borrowed money on terms substantially consistent with or more favorable to the Company than the Indebtedness being replaced;
(x) make or authorize any payment of, or withholding accrual or commitment for, capital expenditures in excess of Taxes with respect to$250,000 in the aggregate, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, except to the extent set forth in each case the Company’s capital budget set forth in accordance with past practice and with the terms Section 7.1(a)(x) of the Company Stock Plans as Disclosure Schedule;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than Contracts with customers, suppliers, agents, distributors or sales representatives (including “authorized dealers”) entered into in effect on the date Ordinary Course of Business and, for the avoidance of doubt, any Contracts entered into in connection with an action expressly permitted by any of the Subsections of this Agreement Section 7.1(a), including any material amendment, modification or supplement to an existing Contract in compliance with Section 7.1(a)(xii);
(xii) other than with respect to Material Contracts related to Indebtedness, which shall be governed by Section 7.1(a)(ix), Section 7.1(a)(vi) and Section 7.12, terminate, materially amend, materially waive, or as modified after assign, convey, encumber or otherwise transfer, in whole or in part, any material rights or interest pursuant to or in, any Material Contract, other than expirations of any such Contract in the date Ordinary Course of this Agreement Business and in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company such Contract with no further action by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect for any ministerial actions, or non-exclusive licenses, covenants not to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensations▇▇, bonus or pensionreleases, welfare waivers or other benefits prior rights under Intellectual Property Rights owned or purported to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of be owned by the Company or any of its Subsidiaries, in each case, that are granted in the Ordinary Course of Business;
(Exiii) cancel, modify or waive any debts or similar claims held by the Company or any of its Subsidiaries having in each case a value in excess of $100 thousand in the aggregate;
(xiv) amend any License contemplated by Section 5.5(d) in any material respect, or allow any such License to lapse, expire or terminate (except where the lapse, expiration or termination of any such License is with respect to a License that has become obsolete, redundant or no longer required by applicable Law or for the operation of the Company’s business);
(xv) for the avoidance of doubt, except as expressly provided for by Section 7.11, amend, modify, terminate, cancel or let lapse a material Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement self-insurance programs are established by the Company or one or more of its Subsidiaries or replacement policies underwritten by reputable insurance carriers are in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of the date of this Agreement;
(xvi) other than with respect to Transaction Litigation, any Proceeding in connection with, arising out of or otherwise related to a demand for appraisal under Section 262 of the DGCL or any Tax claim, audit, assessment or dispute, which shall be governed by Section 7.16, Section 4.2(f) and Section 7.1(a)(xviii), respectively, settle or compromise any Proceeding for an amount in excess of $100 thousand in the aggregate during any calendar year, or which would reasonably be expected to (A) have a materially negative impact on the operations and reputation of the Company and its Subsidiaries or (B) involve any criminal liability or any admission of material wrongdoing or any material wrongful conduct by the Company or any of its Subsidiaries;
(xvii) make any changes with respect to accounting policies or procedures, except, in each case, as required by changes in GAAP;
(xviii) make, change or revoke any material Tax election, change an annual U.S. Federal Income or other material Tax accounting period, adopt or change any material Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to material Taxes, settle or compromise any material Tax claim, audit, assessment or dispute, surrender any right to claim a refund of a material amount of Taxes, or agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Tax;
(xix) cancel, abandon or otherwise allow to lapse or expire any Intellectual Property Rights that are owned by the Company or any of its Subsidiaries and are material to the businesses of the Company and its Subsidiaries, except, solely with respect to Intellectual Property Rights that are not material to the businesses of the Company and its Subsidiaries, in the Ordinary Course of Business;
(xx) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as required by applicable Law, (A) increase in any manner the compensation or consulting fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, (B) become a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement (other than offer letters providing for an “employment at will” relationship without any right to contractual severance, entered into with new hire employees in the Ordinary Course of Business), (C) grant any new awards, or amend or modify the terms of any outstanding awards (including, in each case, Company Equity Awards), under any Company Benefit Plan, (D) take any action to accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including any equity-based awards)Benefit Plan, (FE) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (GF) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or loans to any Company Employee (other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper routine travel advances issued in the ordinary course Ordinary Course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstandingBusiness and those loans, (F) Indebtednessadvances, the proceeds of which will be used to finance all guarantees or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereofcapital contributions expressly permitted by Section 7.1(a)(vi)), (G) Indebtedness under the Bridge Facility, refinancings hire any employee or replacements thereof and engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees in excess of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) 200,000 or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with terminate the funding employment of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practiceexecutive officer other than for cause;
(vxxi) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with respect to the Retained Businessa labor union, other than with respect to acquisitions of businesseslabor organization, which is subject to Section 5.01(b)(ix)works council or similar organization; or
(xxii) agree, and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected foregoing.
(b) Nothing set forth in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect or its Subsidiaries’ operations prior to the Retained BusinessEffective Time or give the Company, transferdirectly or indirectly, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon the right to control or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses direct the Parent’s or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect Merger Sub’s operations prior to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinEffective Time.
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Collectors Universe Inc), Merger Agreement (Collectors Universe Inc)
Interim Operations. Except (ai) The as required by this Agreement, (ii) as set forth in Section 6.1 of the Company covenants and agrees Disclosure Schedule, (iii) as required by applicable Law, or (iv) as consented to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writingwriting by Parent, which approval shall consent will not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Lawthe Company covenants that, (2) expressly required by from the Transaction Documents (including date of this Agreement until the earlier of the termination of this Agreement in connection accordance with the Separation its terms and the Distribution or as contemplated by the Final Step PlanEffective Time:
(a) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to will (i) conduct the Retained Business business only in the ordinary course of business consistent with past practice, Ordinary Course and the Company shall, and shall cause each of its Subsidiaries to, solely (ii) to the extent related to the Retained Business, subject to compliance with the specific matters set forth belowconsistent therewith, use commercially reasonable efforts to (A) preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entitiesits current business organization, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersB) and keep available the services of key employees and (C) maintain its existing relationships with its customers and suppliers; provided that no action or failure to take action by the Company or any of its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) through (s) will constitute a breach under this Section 6.1(a) unless such action or failure to take action would constitute a breach of such provision of Section 6.1(b) through (s), as applicable;
(b) the Company will not amend its Certificate of Incorporation or Bylaws, the Company will not permit any of its Subsidiaries to amend any of the organizational documents of any of its Subsidiaries, and none of the Company or any of its Subsidiaries will otherwise take any action to exempt any Person from any provision of its Certificate of Incorporation or Bylaws or any of the organizational documents of any of its Subsidiaries;
(c) the Company will not, and will not permit any of its Subsidiaries to, authorize or pay any dividends on or make any distribution with respect to its outstanding Shares or other securities (whether in cash, assets, stock or other securities of the Company or its Subsidiaries), except dividends and distributions made by a direct or indirect wholly owned Subsidiary of the Company to its parent, or directly or indirectly redeem, purchase or otherwise acquire any Shares or other securities;
(d) except for (i) transactions exclusively among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries’ present employees and agents.
, (bii) Without limiting issuances of Shares in respect of any exercise of Company Stock Options or settlement of Company Units or Company Stock-Based Awards outstanding on the generality ofdate of this Agreement, in each case in accordance with the terms of the applicable award agreement as in effect as of the date of this Agreement, and in furtherance of, (iii) issuance of the foregoingCommitted Shares, the Company covenants will not, and agrees as to itself and will not permit any of its Subsidiaries thatto, from and after issue, sell, pledge, dispose of or encumber (other than Permitted Liens), or authorize the issuance, sale, pledge, disposition or encumbrance (other than Permitted Liens) of, any Shares or any securities convertible into or exchangeable for Shares, or any rights, warrants or options to acquire or with respect to Shares or convertible or exchangeable securities, or split, combine or reclassify the Shares or any outstanding capital stock of any of the Company’s Subsidiaries;
(e) except to the extent required by Contracts in existence as of the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the by Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Benefit Plans set forth on Section 5.01(b4.10(a) of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo increase in any manner the compensation and the SpinCo Subsidiaries benefits (other than in the case of clause (A))including severance, (Atermination, change-in-control, incentive and retention compensation or benefits) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay current or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to former directors, officers or employees of the Company and its Subsidiaries; provided, that the Company may issue the Committed Shares to the persons entitled thereto;
(ii) grant any Company Stock Awards or other equity or equity-based awards (other than the Committed Shares), or amend the terms of any Company Stock Awards outstanding as of the date of this Agreement;
(iii) enter into, amend (other than de minimis administrative amendments to Company Benefit Plans that do not increase the level of benefits or cost to the Company or any of its Subsidiaries of maintaining the applicable compensation or benefit program, policy, arrangement or agreement), adopt, implement or otherwise commit itself to any Company Benefit Plan or other compensation or benefit plan, program, policy or Contract that would be a Company Benefit Plan if in effect as of the date of this Agreement, including any pension, retirement, profit-sharing, bonus, collective bargaining or other employee benefit or welfare benefit plan, policy, arrangement or agreement or employment or consulting agreement with or for the benefit of any employee, director, consultant, independent contractor or service provider of the Company or its Subsidiaries;
(iv) incur other than pursuant to the terms of this Agreement, take any Indebtedness action to amend, waive or issue accelerate the vesting of, or the lapsing of restrictions or performance criteria with respect to, any warrants Company Benefit Plan or Company Stock Option, Company Stock-Based Award or Company Unit or otherwise accelerate any rights or benefits, or make any determinations under any Company Benefit Plan;
(v) establish or fund (or provide any funding for) any rabbi trust or other rights funding arrangement, including in respect of any Company Benefit Plan;
(vi) hire or promote any person at the level of Director or above or terminate (other than for cause) the employment or services of any employee at the level of Director or above; or
(vii) enter into, establish or adopt any collective bargaining or similar agreement with any union, works council or labor organization;
(f) the Company will not, and will not permit any of its Subsidiaries to, make any loans or advances to acquire any Indebtednessof its directors and executive officers (other than travel and payroll advances in the Ordinary Course in type and amount) or make any change in its existing borrowing or lending arrangements for or on behalf of any such Persons;
(g) the Company will not, and will not permit any of its Subsidiaries to, (i) incur, assume, guarantee or prepay any indebtedness for borrowed money (directly, contingently or otherwise), except for (A) any indebtedness for borrowed money among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries, (B) indebtedness for borrowed money in the ordinary course of business consistent with past practice in a principal an amount not to exceed $400,000,000 5,000,000 in aggregate principal amount, and (C) letters of credit issued in the aggregate at Ordinary Course or (ii) incur any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to Lien securing indebtedness for borrowed money, except for Liens securing borrowing expressly permitted by the foregoing clause (i);
(h) the Company and its Subsidiaries, taken as a whole, than existing Indebtednesswill not, and with will not permit any of its Subsidiaries to, change in any material respect any of the accounting methods, principles or practices used by it unless required by or advisable under a maturity date no more than 10 years after change in GAAP or any other accounting standard used by any such Subsidiary as of the date of this Agreement;
(i) other than in the Contract evidencing such IndebtednessOrdinary Course, the Company will not, and will not permit any of its Subsidiaries to (A) make, change or revoke any material income Tax election, (B) except with respect to the Bridge Facility, in replacement offile any material amended income Tax Return, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness settle or compromise any material liability for income Taxes or surrender any claim for a refund of a material amount of income Taxes, other than in the case of clauses (B) and (C) hereof in respect of any income Taxes that have been identified in the reserves for income Taxes in the Company’s GAAP financial statements;
(j) the Company will not, and will not permit any of its Subsidiaries to, acquire, except in respect of any mergers, consolidations, business combinations among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries, including by merger, consolidation or acquisition of stock or assets, any corporation, partnership, limited liability company, other business organization or any division thereof, or any material amount of assets in connection with acquisitions or investments, other than the purchase of supplies, equipment and products in the Ordinary Course;
(Dk) the Company will not, and will not permit any of its Subsidiaries to, renew, extend, terminate, amend in any material respect or waive any of its material rights under any Company Material Contract of the type described in Section 4.17(a)(iv), (1v), (vi), (viii), (xvi) or (xvii) or enter into any Contract that would constitute a Company Material Contract of the type described in Section 4.17(a)(iv), (v), (vi), (viii), (xvi) or (xvii) if entered into prior to the extent date of this Agreement, and except in the Ordinary Course, the Company will not, and will not drawn upon and payments are not triggered therebypermit any of its Subsidiaries to, letters renew, extend, terminate, amend in any material respect or waive any of creditits material rights under any Company Material Contract (other than of the type described in Section 4.17(a)(iv), bank guarantees(v), security (vi), (viii), (xvi) or performance bonds (xvii)) or similar credit support instruments and enter into any Contract that would constitute a Company Material Contract (2other than of the type described in Section 4.17(a)(iv), (v), (vi), (viii), (xvi) overdraft facilities or cash management programs, in each case issued, made or (xvii)) if entered into prior to the date of this Agreement;
(l) the Company will not, and will not permit any of its Subsidiaries to, make or authorize any capital expenditure, other than capital expenditures in the ordinary course Ordinary Course or that do not otherwise exceed the Company’s existing capital budget by more than $1,000,000 in the aggregate;
(m) the Company will not, and will not permit any of business consistent with past practiceits Subsidiaries to, (EA) commercial paper issued sell, transfer, mortgage, encumber or otherwise dispose of any of its tangible assets, tangible properties or businesses, except for sales, transfers, mortgages, encumbrances or other dispositions in the ordinary course Ordinary Course (including dispositions of business consistent with past practice inventory or of obsolete equipment in a principal amount the Ordinary Course) or pursuant to an existing contract set forth in Section 6.1(m) of the Company Disclosure Schedule, or (B) cancel, release or assign any indebtedness of any person owed to it or any claims held by it against any Person other than the release of claims held by it in the Ordinary Course;
(n) except in the Ordinary Course, the Company will not, and will not permit any of its Subsidiaries to (i) abandon, disclaim, dedicate to the public, sell, assign or grant any security interest in, to or under any Company-Owned IP, including failing to perform or cause to be performed all applicable filings, recordings and other acts, or to pay or cause to be paid all required fees and Taxes, to maintain and protect its interest in the Company-Owned IP, or (ii) grant to any third party any license, or enter into any covenant not to exceed ▇▇▇, with respect to any Company-Owned IP;
(o) the Company will not, and will not permit any of its Subsidiaries to, commence, settle or compromise any litigation, suit, action or proceeding, except for commencements, settlements or compromises that (i) involve monetary remedies with a value not in excess of $250,000,000 1,000,000, with respect to any individual litigation, suit, action or proceeding or $5,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposesaggregate; provided that the aggregate principal Company will notify Parent of commencements, settlements or compromises that involve monetary remedies with a value in excess of $500,000, (ii) do not involve any material equitable remedy or impose any material restriction on its business or the business of its Subsidiaries, and (iii) do not relate to any litigation by the Company’s stockholders in connection with this Agreement or the transactions contemplated hereby;
(p) the Company will not, and will not permit any of its Subsidiaries to, materially reduce the amount of Indebtedness at insurance coverage or fail to renew any time outstanding under material existing insurance policies;
(q) the Company will not, and will not permit any of its Subsidiaries to, amend any franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals, clearances, permissions, qualifications or registrations or orders of any Governmental Entity in a manner that adversely impacts its ability to conduct its business in any material respect, or (ii) other than in the Ordinary Course, terminate or allow to lapse, any such franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals, clearances, permissions, qualifications or registrations or orders;
(r) the Company will not, and will not permit any of its Subsidiaries to, adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than this clause Agreement); and
(Fs) shall the Company will not, and will not exceed $9,000,000,000; providedpermit any of its Subsidiaries to, furtheragree to do, or make any commitment to do, any of the foregoing. The Company may request consent from Parent (such consent not to be unreasonably withheld, conditioned or delayed) with respect to the actions proscribed in this Section 6.1 by delivering written notice. The Company, on the one hand, and Parent and Merger Sub, on the other hand, acknowledge and agree that (i) nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the Separation Agreement shall provide that SpinCo shall assume right to control or direct the obligations operations of the Company or any of its Subsidiaries prior to the Effective Time, (ii) prior to the Effective Time, the Company will exercise, consistent with the terms and conditions of this Agreement, control and supervision over its and its Subsidiaries’ operations, (iii) notwithstanding anything to the contrary in this Agreement, no consent of Parent will 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 Indebtedness consent would reasonably be expected to be a violation of applicable Law, and (iv) notwithstanding anything to the contrary in this Agreement, Parent’s consent will not be required for the Company to take, or fail to take, any action set forth in Section 6.1(a), Section 6.1(e)(i) or Section 6.1(l) if the Company determines in good faith that such action or inaction is reasonably necessary in light of then-current operating conditions and Parent developments with respect to the business of the Company and its SubsidiariesSubsidiaries as a result of COVID-19; provided, including, following in the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and case of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, furtheriv), that the Company shall will provide reasonable advance notice to and consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with any such action or inaction and will keep Parent fully informed on a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) current basis with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties such action or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includininaction.
Appears in 2 contracts
Sources: Merger Agreement (Home Depot, Inc.), Merger Agreement (HD Supply Holdings, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned or delayed, and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2) expressly required by the Transaction Documents (including business of it and its Subsidiaries shall be conducted in connection the ordinary and usual course consistent with past practice and to the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, shall use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributorslandlords, licensors, creditors, lessorslicensees, employees and business associates and others having material business dealings with associates. Notwithstanding the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless i) as otherwise contemplated by this Agreement, (ii) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld), conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except (iii) as (1) is required by applicable Law, (2) expressly required Law or by the Transaction Documents (including in connection with the Separation and the Distribution) any Governmental Entity or (3iv) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(ia) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation (including by way of any certificates of designation) or bylaws or other applicable governing instruments;
(b) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company;
(c) (acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $500,000 in any transaction or series of related transactions, other than amendments acquisitions pursuant to Contracts in effect as of the governing documents date of this Agreement, all of which are identified on Section 5.1(q) of the Company Disclosure Schedule;
(d) issue, sell, dispose of, grant, transfer or subject to any Lien, or authorize the issuance, sale, disposition, grant or transfer of or Lien on, any shares of capital stock of the Company or any of its Subsidiaries, including, without limitation shares of Series A Junior Participating Preferred Stock (in each case, other than (i) the issuance or grant of Shares upon the exercise of Company Options that are outstanding as of the date hereof, or (ii) the issuance of capital stock or other equity interests by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except securities convertible or exchangeable into or exercisable for any such transaction by a wholly owned subsidiary capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(e) make any loans, advances or capital contributions to or investments in any Person (other than the Company which remains a or any direct or indirect wholly owned Subsidiary after consummation of such transaction), the Company) in excess of $500,000 in the aggregate;
(Cf) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1i) any one quarterly dividend to be issued by the Company in its fourth fiscal quarter ended March 3, 2007, not to exceed $0.04 per Share in the aggregate, and (ii) dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of to the Company or to another any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(g) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, acquisition of any such capital stock or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units other securities tendered by current or Company Performance Stock Units, former employees or directors in each case in accordance with past practice and connection with the terms exercise of the currently outstanding Company Stock Plans as in effect on the date Options);
(h) incur any indebtedness for borrowed money or guaranty such indebtedness of this Agreement another Person (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other than a wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize issue or completely sell any debt securities or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationeach case for indebtedness, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business and consistent with past practice in a principal amount not to exceed $400,000,000 practice, for borrowed money under credit facilities, lines of credit and other debt or borrowing arrangements reflected in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to Financial Statements; provided, however that neither the Company and nor its Subsidiaries, taken as a whole, than Subsidiaries shall draw down on any amounts under its existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) credit facilities except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, necessary to comply with letters of credit, bank guaranteesunder credit facilities, security lines of credit and other debt or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, borrowing arrangements reflected in each case issued, made or entered into the Company's most recent financial statements included in the Company Reports issued from time to time in the ordinary course of business consistent in an amount not to exceed $1,000,000 in the aggregate outstanding at any given time;
(i) make any material changes with past practicerespect to accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(Ej) commercial paper issued make, alter or revoke any Tax accounting method or material Tax election, or settle or compromise any Tax liability or otherwise pay or consent to any assessment as the result of an audit, file any amended Tax Return, enter into any closing agreement relating to Taxes, or waive or extend the statute of limitations in respect of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business consistent with past practice in a principal amount not business);
(k) transfer, sell, lease, exclusively license, surrender, divest, cancel, abandon or otherwise dispose of, or subject to exceed $250,000,000 in the aggregate at any time outstandingLien, (F) Indebtednessany assets, the proceeds of which will be used to finance all product lines or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations businesses of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, includingother than inventory, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof supplies and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing other assets in the ordinary course of business consistent with past practice;
(vl) except as expressly contemplated by this Agreement, required pursuant to the Benefit Plans in effect on the date of this Agreement disclosed in Section 5.1(h)(i) of the Company Disclosure Schedule, pursuant to any employment or separation agreement disclosed in Section 5.1(h)(vi) of the Company Disclosure Schedule or any collective bargaining agreement disclosed in Section 5.1(m) of the Company Disclosure Schedule, or as otherwise required by applicable Law, including to comply with Section 409A of the Code, (i) grant or provide any severance or termination payments or benefits to any officers, employee, independent contractor or consultant of the Company or any of its Subsidiaries, (ii) increase (or commit to increase) the compensation, perquisites or benefits payable to any director, officer, employee, independent contractor or consultant of the Company or any of its Subsidiaries, except for increases with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) non-executive employees in the ordinary course of business consistent with past practice and practice, (iii) enter into any new, or amend the terms of any existing, employment agreement or Benefit Plan with any member of management of the Company or any of its Subsidiaries, (iv) grant any equity or equity-based awards that may be settled in Shares or any other equity securities of the Company or any of its Subsidiaries or the value of which is linked directly or indirectly, in whole or in part, to the price or value of any Shares or other equity securities of the Company or any of its Subsidiaries, (vi) accelerate the vesting or payment of compensation payable or benefits provided or to become payable or provided to any current or former director, officer, employee, independent contractor or consultant, (vii) change the terms of any outstanding Company Option, or (viii) terminate or materially amend any existing, or adopt any new, Benefit Plan (other than changes that may be necessary to comply with applicable Law, in each case that do not materially increase the costs of any such Benefit Plans); provided, however, that the manner of any change, amendment or acceleration to comply with Section 409A of the Code must be approved by Parent, which approval shall not be unreasonably withheld or delayed);
(m) enter into, amend or extend any collective bargaining agreement or other labor agreement;
(n) enter into, amend or modify any agreement of the type described in Section 5.1(s);
(o) make any capital expenditures in excess of $100,000 individually or $300,000 in the aggregate not in excess of 120% of the amounts reflected over and above those capital expenditures identified in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 plan set forth in Section 5.01(b)(v6.1(o) of the Company Disclosure LetterSchedule;
(vip) with respect enter into any rights agreement, establish any stockholder rights plan (or similar plan commonly referred to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place as a Lien upon "poison pill") or otherwise dispose of enter into any material Intellectual Property; provided that this clause Contract (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (case other than transactions among the Stock Plans existing on the date hereof and Company Options issued thereunder) under which the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties may become obligated to sell or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, otherwise issue, deliverregister, sellredeem, grantrepurchase, transfer, or encumber, or authorize the issuance, delivery, sale, grantvote, transfer or encumbrance of, dispose of any shares of its capital stock or any securities convertible other securities; or
(q) except as provided in Section 6.2 and Section 6.3, agree, authorize or exchangeable into commit to do any of the foregoing. Nothing contained in this Agreement (including, without limitation, this Section 6.1) is intended to give Parent, directly or exercisable forindirectly, the right to control or direct the Company's or any optionsof its Subsidiaries' operations prior to the Effective Time, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of nothing contained in this Agreement in accordance with is intended to give the existing terms Company, directly or indirectly, the right to control or direct Parent's or any of such awards its Subsidiaries' operations. Prior to the Effective Time, each of Parent, Merger Sub and the Company Stock Plansshall exercise, (B) Investment Preferred Stock (as defined consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries' respective operations. Subject to the immediately preceding paragraph, in connection with the Bridge Facility) continued operation of the Company and the Subsidiaries, the Company will reasonably confer in good faith on a regular basis with one or (C) more representatives of Parent, designated by wholly owned Subsidiaries Parent to the Company or to any other wholly owned Subsidiary in writing, regarding operational matters, and the general status of ongoing operations of the Company; provided that, for the avoidance Company and will notify Parent promptly of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 occurrence that has had or may reasonably be expected to have a Company Material Adverse Effect or that, individually or $200,000,000 in the aggregate in any yearaggregate, in each case to acquire any business, whether by merger, consolidation, purchase of property has materially delayed or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that wouldimpaired, or would reasonably be expected to, prevent, to materially delay or materially impair the impair, consummation of the Transactions;
(x) other than capital expenditures made transactions contemplated by this Agreement, or that, individually or in accordance the aggregate, has resulted, or would reasonably be expected to result, in the failure by the Company to comply with or satisfy in any material respect any condition set forth in Section 5.01(b)(v) 7.1 or 7.2; provided, however, that no such notification shall affect the covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement. The Company acknowledges that Parent does not and other than purchases and licenses will not waive any rights it may have under this Agreement as a result of film and television and production programming (includinsuch notice or consultations.
Appears in 2 contracts
Interim Operations. (a) The Company Debtor covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time Closing, except (unless Parent shall i) as otherwise expressly required or contemplated by this Agreement or the Original Plan Sponsor Agreement, (ii) as QCP and ProMedica may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and except (iii) as (1) otherwise required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) Laws or (3iv) otherwise expressly disclosed as set forth in Section 5.01(a) 4.1 of the Company Debtor Disclosure Letter), the Company shall, and Business shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business be conducted in the ordinary and usual course of business consistent with past practiceand, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to consistent therewith, the Retained Business, subject to compliance with the specific matters set forth below, Debtor and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization intact their business organizations intact, preserve governmental licenses, permits, consents, approvals, authorizations and qualifications and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providersassociates, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement until the Closing, except (i) as otherwise expressly required or contemplated by this Agreement or the Original Plan Sponsor Agreement, (ii) as QCP and prior to the First Effective Time (unless Parent shall otherwise ProMedica may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and which determination shall take into account the Company Overview Presentation, and except (iii) as (1) otherwise required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Laws or (3iv) otherwise expressly disclosed as set forth in Section 5.01(b) 4.1 of the Company Debtor Disclosure Letter), the Company shall Debtor will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions by-laws or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable governing instruments;
(ii) merge or consolidate the Debtor or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate the Debtor or any of its Subsidiaries or otherwise enter into any agreements providing for the sale of their respective material assets, operations or business (other than transactions (A) the sale or disposition of obsolete or worn-out assets in the type ordinary course of business and (B) sales and dispositions of such facilities and related assets as are contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company SNF/AL Remarketing Process (as defined in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the TransactionsOriginal Plan Sponsor Agreement));
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $1,000,000 in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement which have been provided to ProMedica and QCP prior to the date of this Agreement;
(iv) acquire any corporation, partnership or other business organization or division thereof or collection of assets constituting all or substantially all of a business or business unit, whether by merger or consolidation, purchase of substantial assets or equity interest or any other manner, from any other Person;
(v) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Debtor or any of its Subsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Debtor to the Debtor or another wholly-owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than such dispositions as are contemplated by the SNF/AL Remarketing Process;
(vi) create or incur any Lien securing indebtedness for borrowed money (other than a Lien currently provided for under the Centerbridge Facility, any Permitted Lien (other than a Permitted Lien under clause (iv) of such definition) and/or the grant of any cash collateral in respect of letters of credit issued in respect of, or otherwise securing, ordinary course operating liabilities) on any assets of the Debtor or any of its Subsidiaries having a value in excess of $1,000,000 in the aggregate;
(vii) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Debtor or any direct or indirect wholly-owned Subsidiary of the Debtor);
(viii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except as expressly required for dividends paid by any Company Plan as in effect on direct or indirect wholly-owned Subsidiary to the date hereof: Debtor or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of its capital stock (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than the Original Restructuring Support Agreement and the Alternative Restructuring Support Agreement);
(ix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(x) incur any indebtedness for borrowed money (which, for the avoidance of doubt, shall not include obligations in respect of cash-collateralized letters of credit issued in respect of, or other grants of cash collateral securing, ordinary course operating liabilities) or guarantee such action taken indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Debtor or any of its Subsidiaries, except for purposes of replacing, renewing or extending a broadly applicable material Company Plan indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice that does (A) not materially increase to exceed $2,000,000 in the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofaggregate, (B) grant guarantees incurred in compliance with this Section 4.1 by the Debtor of indebtedness of wholly-owned Subsidiaries of the Debtor or provide (C) indebtedness owed to the Debtor or another wholly-owned Subsidiary of the Debtor;
(xi) except as set forth in the capital expenditures budget set forth in Section 4.1(a)(xi) of the Debtor Disclosure Letter, make or authorize any transaction capital expenditure in excess of $2,000,000 in the aggregate, excluding any capital expenditure required by any Contract set forth on Section 4.1(a)(xi) of the Debtor Disclosure Letter or retention bonuses capital expenditure determined in good faith by the Debtor Board to be required for (A) the protection of, or to avoid injury to, any Person, (B) the care or safety of any patient under the care of any facility operated by the Debtor or any of its Subsidiaries or (C) compliance with Law;
(xii) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than such Contracts as are contemplated by the SNF/AL Remarketing Process;
(xiii) make any material changes with respect to material accounting policies or procedures, except as required by changes in applicable Law or GAAP;
(xiv) settle any litigation or other Proceeding brought against the Debtor or its Subsidiaries by a Governmental Entity (A) for an amount in excess of $100,000 individually or $1,000,000 in the aggregate for all such Proceedings (other than any resolution of claims processing for government reimbursement in the ordinary course of business, and excluding recoupment actions) or (B) in a manner that would impose any restrictions on its assets, operations or businesses or result in any injunction or equitable relief against the Debtor or any of its Subsidiaries;
(xv) settle any Proceeding other than against or brought by a Governmental Entity, (A) for an amount in excess of $500,000 individually or $8,000,000 in the aggregate for all such Proceedings in any one-calendar-month period (in each case, with respect to Proceedings in the state of Pennsylvania, net of applicable insurance proceeds) or (B) in a manner that would impose any restrictions on its assets, operations or businesses or result in any injunction or equitable relief against the Debtor or any of its Subsidiaries;
(xvi) amend, modify or terminate any Material Contract, including the Centerbridge Facility, in a manner adverse to the Debtor or its Subsidiaries;
(xvii) (A) change in any material respect any material method of accounting of the Debtor or its Subsidiaries for Tax purposes; (B) enter into any agreement with any Governmental Entity (including a “closing agreement” under Code Section 7121) with respect to any material Tax or Tax Returns of the Debtor or its Subsidiaries; (C) surrender a right of the Debtor or its Subsidiaries to a material Tax refund; (D) change an accounting period of the Debtor or its Subsidiaries with respect to any material Tax; (E) file an amended Tax Return; (F) change or revoke any material election with respect to Taxes; (G) make any material election with respect to Taxes that is inconsistent with past practice; (H) file any Tax Return that is inconsistent with past practice; or (I) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment (other than in the ordinary course of business);
(xviii) transfer, sell, lease, license, mortgage, pledge, divest or otherwise dispose of any material tangible or intangible assets (including Intellectual Property Rights), licenses, operations, rights, product lines, businesses or interests therein of the Debtor or its Subsidiaries, including the capital stock of any of its Subsidiaries, except (A) in connection with services provided in the ordinary course of business and sales or other dispositions of obsolete or worn-out assets, (B) sales, leases, licenses, divestitures, cancellations, abandonments, lapses, expirations or other dispositions of assets with a fair market value not in excess of $500,000 in the aggregate, (C) pursuant to Contracts in effect prior to the date of this Agreement and (D) such sales, leases, licenses, divestitures, cancellations, abandonments, lapses, expirations or other dispositions of assets as are contemplated by the SNF/AL Remarketing Process;
(xix) (A) enter into, adopt, amend in any material respect or terminate any Company Plan (other than entry into any new employment agreement with any individual whose hiring is not restricted by, or who is otherwise hired in accordance with, clause (H) below), (B) increase or accelerate the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any director, officer, officer or employee or other service provider of the Company Debtor or any of its Subsidiaries, (C) increase grant any new awards, or amend or modify the compensation, bonus or pension, welfare or other benefits terms of any directoroutstanding awards, officer under any Company Plan (other than grants of any new awards to any individual whose hiring is not restricted by, or employee of the Company or any of its Subsidiarieswho is otherwise hired in accordance with, except in the ordinary course of business consistent with past practice with respect to clause (1H) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changebelow), (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including any equity-based awards)Plan, (FE) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by the terms of any existing Company Plan set forth on Section 2.1(h)(i) of the Debtor Disclosure Letter or GAAP, (GF) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to directorsany director, officers officer or employees employee of the Company Debtor or any of its Subsidiaries;
, (ivG) incur terminate the employment of any Indebtedness officer of the Debtor or issue its Subsidiaries other than for “cause”, (H) hire (x) any warrants officer of the Debtor or its Subsidiaries with a title of Vice President or higher or (y) any employee of the Debtor or its Subsidiaries with aggregate annual base salary and target bonus of more than $250,000, except, in the case of the foregoing clauses (x) and (y), to the extent jointly determined by the Chief Restructuring Officer of the Debtor (“CRO”) and the Debtor Board in their reasonable business judgment in good faith necessary in the interests of patient care (any such individual described in the foregoing clauses (x) and (y) and hired to replace any such employee, a “New Hire”), provided that (i) any such officer New Hire (and his or her terms and conditions of employment, including any base and target incentive compensation) hired pursuant to this clause (H) shall be reasonably acceptable to ProMedica and QCP and (ii) the terms and conditions of employment of any New Hire that is not an officer, including base and target incentive compensation, shall be subject to notice and consultation with ProMedica and QCP, or (I) make any incentive payment or payment in respect of severance or any nonqualified deferred compensation entitlement to any current or former director, officer or employee of the Debtor or its Subsidiaries (including making any payments to any rabbi trust or taking any action that would cause the trustee of any rabbi trust to make payments to any current or former director, officer or employee of the Debtor or its Subsidiaries), except, with respect to clause (I) payment of any nondiscretionary incentive payments under existing Company Plans, nondiscretionary severance payments under existing Company Plans, and nondiscretionary payments of nonqualified deferred compensation (other rights than as set forth on Section 4.1(a)(xix)(I) of the Debtor Disclosure Letter) or as otherwise required by applicable Law; provided that payment in respect of any severance or nonqualified deferred compensation amount in excess of $200,000 shall be subject to acquire any Indebtednessprior notice and consultation with ProMedica and QCP and, except with respect to clauses (A) through (H) above, (1) amendments to welfare plans in the ordinary course of business, consistent with past practices that do not materially increase the costs of such welfare plans, (2) with respect to any hourly employees and salaried facility-level employees of the Debtor or its Subsidiaries, and any other employees of the Debtor or its Subsidiaries whose annual base salary does not exceed $150,000, increases in compensation in the ordinary course materially consistent with the Debtor’s 2018 operating budget or otherwise as reasonably determined by the CRO, in consultation with ProMedica and QCP, to be necessary to respond to market demand, (3) with respect to each other employee of the Debtor or its Subsidiaries whose annual base salary exceeds $150,000 (other than any Eligible Employee), increases in compensation in the ordinary course of business consistent with past practice in a principal amount that do not to exceed $400,000,000 in 1.5% of the aggregate at annual base salaries of such other employees or 7.5% of the annual base salary for any time outstanding on prevailing market terms individual and (4) as required pursuant to existing Company Plans, or on terms as otherwise required by applicable Law;
(xx) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(xxi) enter into any Contract adversely affecting in any material respect the Debtor’s or any of its Subsidiaries’ ability to use or otherwise exploit any material Intellectual Property Rights;
(xxii) fail to use commercially reasonable efforts to keep in full force the material Insurance Policies under substantially consistent with or more beneficial to the Company same levels of coverage as the current policies of the Debtor and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date ;
(xxiii) change in any material respect any of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, Debtor’s or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced ’ material policies or refinanced, and in each case with a maturity date no more than 10 years after the date procedures for or timing of the Contract evidencing such Indebtednesscollection of accounts receivable (or any other trade receivables), payment of accounts payable (C) intercompany Indebtedness among the Company or any other trade payables), billing of its customers, pricing and its wholly owned Subsidiariespayment terms, (D) (1) to the extent not drawn upon and cash collections, cash payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programsterms with suppliers, in each case issuedcase, made other than changes required by suppliers, vendors and service providers;
(xxiv) dismiss the QCP Consultants other than in accordance with Section 5.1(b);
(xxv) modify or entered into amend in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not any respect any Contract pursuant to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company HCR III or any of its Subsidiaries with respect currently subleases real property to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 other Subsidiary of the Company Disclosure LetterDebtor; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;or
(vxxvi) with respect to the Retained Businessagree, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;foregoing.
(vib) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) ProMedica shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinknowingly take
Appears in 2 contracts
Sources: Alternative Plan Sponsor Agreement, Alternative Plan Sponsor Agreement (Quality Care Properties, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed)), and except as (1) required by applicable Law, (2) otherwise expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed this Agreement, as set forth in Section 5.01(a) 6.1 of the Company Disclosure Letter)Letter or as required by applicable Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless Parent shall A) as otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents this Agreement, (including B) as Parent may approve in connection with the Separation and the Distributionwriting (such approval not to be unreasonably withheld or delayed), (C) or (3) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter)Letter or (D) as required by applicable Laws, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate articles of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions by-laws or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) any operations or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in excess of $1 million in the aggregate, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement;
(iv) except as expressly required by any for the issuance of Shares upon the exercise of Company Plan Options outstanding on the date of this Agreement or in accordance with the terms of the 401(k) Plans as in effect on the date hereof: of this Agreement, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (A) establishother than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary), adoptor securities convertible or exchangeable into or exercisable for any shares of such capital stock, amend or terminate any material Company Plan options, warrants or amend the terms other rights of any outstanding equity-based awards kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance (other than the exclusion set forth in clauses (a) and (d) of the definition of Encumbrance) on any assets of the Company or any of its Subsidiaries;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the Company);
(vii) other than regular quarterly cash dividends on Shares of $0.18 per Share and the Special Dividend, declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any other direct or indirect wholly owned Subsidiary) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ix) incur any indebtedness for borrowed money or guarantee such action taken indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for purposes indebtedness for borrowed money incurred in the ordinary course of replacingbusiness consistent with past practices;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(x) of the Company Disclosure Letter and consistent therewith, renewing make or extending authorize any capital expenditure in excess of $2 million in the aggregate;
(xi) enter into any Contract that would have been a broadly applicable material Company Plan Material Contract had it been entered into prior to this Agreement, except for customer Contracts entered into in the ordinary course of business consistent with past practice that does do not materially increase contain any of the cost provisions referred to in Section 5.1(j)(i)(F);
(xii) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles, the rules or policies of the Public Company Accounting Oversight Board or applicable Law;
(xiii) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $500,000 or any claim against the Company in excess of such amount;
(xiv) (i) amend or modify any Material Contract in any material respect or in manner adverse to the Company Plan or benefits its Subsidiaries, (ii) terminate any Material Contract, or (iii) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $500,000;
(xv) make any material Tax election, settle any material Tax claim or change any material method of Tax accounting;
(xvi) transfer, sell, lease, license, mortgage, pledge, suffer a Lien, divest, abandon, or allow to lapse or expire, or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except in the ordinary course of business or sales of obsolete assets;
(xvii) except as provided under such Company Plan based on the cost on in Section 6.9(g), as required pursuant to existing agreements in effect prior to the date hereofof this Agreement and set forth in Section 5.1(h)(i) of the Company Disclosure Letter, or as otherwise required by applicable Law, (Bi) grant or provide any transaction severance or retention bonuses termination payments or benefits to any director, officer, officer or employee or other service provider of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice as disclosed to the Parent prior to the date hereof, (Cii) increase the compensation, bonus or pension, welfare welfare, severance or other benefits of of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except for increases in base salary or bonus in the ordinary course of business consistent with past practice with respect to (1) for employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changewho are not officers, (Diii) increase establish, adopt, amend or terminate any Benefit Plan or amend the severance or termination payments or benefits payable to terms of any director, officer, employee or other service provider of the Company or any of its Subsidiariesoutstanding equity-based awards, (Eiv) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including Benefit Plan, to the extent not already provided in any equity-based awards)such Benefit Plan, (Fv) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company U.S. Benefit Plan or Non-U.S. Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP, or (Gvi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries.
(xviii) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(ivxix) incur perform any Indebtedness services or issue provide any warrants products to any Person that would expand in any material respect the scope of services or other rights products subject to acquire any Indebtednessnon-compete provision to which the Company or any of its Subsidiaries is subject; or (xx) agree, except authorize or commit to do any of the foregoing.
(Ab) in the ordinary course of business consistent with past practice in a principal amount not Prior to exceed $400,000,000 in the aggregate at making any time outstanding on prevailing market terms written or on terms substantially consistent with or more beneficial broad-based oral communications to the Company and its Subsidiariesdirectors, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, officers or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations employees of the Company or any of its Subsidiaries pertaining to the effect upon employment, compensation or benefit matters that will result as a consequence of the transactions contemplated by this Agreement, the Company shall provide Parent with respect a copy of the intended communication, Parent shall have a reasonable period of time to such Indebtedness (review and comment on the communication, and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause cooperate in providing any such mutually agreeable communication.
(G), (Hc) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of From the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such sharesuntil Effective Time, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of as otherwise expressly required by this Agreement in accordance with the existing terms of such awards and the Company Stock PlansAgreement, (B) Investment Preferred Stock as the Company may approve in writing (as defined in the Bridge Facility) such approval not to be unreasonably withheld or delayed), (C) as set forth in Section 6.1(c) of the Parent Disclosure Letter or (D) as required by wholly owned applicable Laws, Parent will not and will not permit its Subsidiaries to the Company take any action or omit to take any other wholly owned Subsidiary action that is reasonably likely to result in any of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect conditions to the Retained Business, other than capital expenditures made Closing set forth in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is Article VII not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinbeing satisfied.
Appears in 2 contracts
Sources: Merger Agreement (Banta Corp), Merger Agreement (Banta Corp)
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries thatotherwise expressly (A) required by this Agreement, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1B) required by applicable Law, (2C) expressly required approved in writing by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) Parent or (3D) otherwise expressly disclosed in set forth on Section 5.01(a6.1(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed)), the business of it and which determination its Subsidiaries shall take into account be conducted in the Company Overview Presentationordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, SROs, customers, clearing brokers, suppliers, licensors, licensees, distributors, creditors, lessors, employees, independent contractors and business associates and keep available the services of its and its Subsidiaries’ present officers, employees, independent contractors and agents, except as required by applicable Laws. Without limiting the generality of and in furtherance of the foregoing, after the date of this Agreement and prior to the Effective Time, except as otherwise expressly (1A) required by this Agreement, (B) required by applicable Law, (2C) expressly required approved in writing (such approval not to be unreasonably withheld, conditioned or delayed) by the Transaction Documents (including in connection with the Separation and the Distribution) Parent or (3D) otherwise expressly disclosed in set forth on Section 5.01(b6.1(a) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) adopt or propose any change in its articles of incorporation or bylaws or comparable governing documents;
(ii) merge or consolidate itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly owned Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets outside of the ordinary course of business from any other Person in any transaction or series of related transactions, other than (A) acquisitions pursuant to and in accordance with the terms of Contracts in effect as of the date of this Agreement, true, correct and complete copies of which have been provided or otherwise made available to Parent prior to the date of this Agreement or (B) underwritten transactions and/or transactions effected pursuant to Rule 144A of the Securities Act which are not in excess of $20,000,000 in the aggregate;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo voting of, any shares of its capital stock or that of any of its Subsidiaries (other than in the case of clause (A)), (A) amend the Company Voting Agreements or (B) the issuance of shares (i) by its certificate wholly owned Subsidiary to it or another of incorporation its wholly owned Subsidiaries, (ii) in respect of Company Equity Awards outstanding as of the date of this Agreement or bylaws permitted to be granted under this Section 6.1(a) following the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plan as in effect on the date of this Agreement, or (iii) pursuant to the Investor Option), or comparable governing documentssecurities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance on any of its assets or any of its Subsidiaries assets except in the ordinary course of business;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than amendments to the governing documents of any Subsidiary of or from the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify and any of its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary Subsidiaries) except in connection with securities lending in the ordinary course of business or capital markets transactions in the Company which remains a wholly owned Subsidiary after consummation ordinary course of such transaction), business and not in excess of $2,500,000;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1i) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of to the Company or to another any other direct or indirect wholly owned Subsidiary of the Company or to the Company or (2ii) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(iPre-Closing Dividend);
(viii) of the Company Disclosure Letter)reclassify, (D) enter into any agreement with respect to the voting of its capital stocksplit, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock;
(ix) incur any Indebtedness (including the issuance of any debt securities, warrants or other than rights to acquire any debt security) except in connection with securities lending in the ordinary course of business or capital markets transactions in the ordinary course of business and not in excess of $2,500,000;
(1x) pursuant except to the forfeiture extent specifically provided by, and consistent with the line items set forth in, the Company’s capital budget set forth in Section 6.1(a)(x) of the Company Disclosure Letter, make or authorize any payment of, or withholding accrual or commitment for, capital expenditures;
(xi) other than in the ordinary course of Taxes business consistent with respect topast practice, enter into any Contract that would have been a Company Restricted Stock UnitsMaterial Contract had it been entered into prior to this Agreement or amend, Company Deferred Stock Units modify, supplement, waive, terminate, assign, convey, encumber or Company Performance Stock Unitsotherwise transfer, in each case whole or in accordance with past practice and with part, rights or interest pursuant to or in any Company Material Contract, other than expirations of any such Contract in the terms ordinary course of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement business in accordance with the terms of such Contract, or cancel, modify or waive any debts or claims held by it or waive any rights except in the ordinary course of business; provided that for the purpose of this AgreementSection 6.1(a)(xi) the thresholds in Section 4.16(a)(vi) shall be deemed to refer to $200,000 and $400,000, respectively;
(xii) settle any action, suit, claim, hearing, arbitration, investigation or other proceedings (except in the ordinary course of business or for money damages not to exceed $500,000 in the aggregate) or (2) purchases, repurchases, redemptions or other acquisitions of securities on a basis that would result in the imposition of any wholly owned Subsidiary writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Entity or SRO that would restrict the Company by future activity or conduct of the Company or any other wholly owned Subsidiary of its Subsidiaries or a finding or admission of a violation of Law or violation of the Company)rights of any Person or that is brought by any current, former or purported holders of any capital stock or debt securities of the Company or any of its Subsidiaries relating to the Merger or the other transactions contemplated by this Agreement;
(iixiii) merge make any changes with respect to accounting policies or consolidate procedures, except as required by changes in GAAP;
(xiv) take any action that would result in a material diminution for the net capital of a Broker-Dealer Subsidiary not in the ordinary course of business consistent with past practice or a failure to comply with the net capital requirements of the SEC, FINRA and any SRO applicable to any Broker-Dealer Subsidiary, except, for the avoidance of doubt, the payment of the Pre-Closing Dividend;
(xv) fail to duly and timely file all material reports and other material documents required to be filed with FINRA, the SEC or any other PersonGovernmental Entity or SRO, subject to extensions permitted by Law or restructureapplicable rules and regulations;
(xvi) fail to maintain in full force and effect all Insurance Policies covering the Company and its Subsidiaries and their respective properties, reorganize assets and businesses in a form and amount consistent with past practice;
(xvii) make, change or completely revoke any material Tax election, change an annual Tax accounting period, adopt or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) change any material Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations dispute, surrender any right to claim a refund of a Subsidiary material amount of Taxes, take any action which is reasonably likely to result in a material increase in the Tax liability of the Company or its Subsidiaries, or, in which such Subsidiary is respect of any taxable period (or portion thereof) ending after the surviving entity Closing Date, the Tax liability of Parent or its Affiliates;
(xviii) transfer, sell, lease, assign, divest, cancel or otherwise dispose of, or permit or suffer to exist the creation of any Encumbrance upon, any assets, product lines or businesses material to it or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except in connection with an acquisition not otherwise prohibited by services provided in the ordinary course of business and sales of obsolete assets, other than pursuant to Company Material Contracts as in effect prior to the date of this Agreement true, correct and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries complete copies of the Company that would not prevent, materially delay or materially impair the Transactions)which have been made available to Parent;
(iiixix) sell, assign or otherwise transfer any Intellectual Property Rights to any Person, (B) grant any license, covenant not to ▇▇▇, release, waiver or other right under any Intellectual Property Rights to any Person, except for non-exclusive licenses granted in the ordinary course of business consistent with past practice, or (C) cancel, abandon or allow to lapse or expire any material Intellectual Property Rights;
(xx) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend applicable Law or terminate any material Company Plan or amend pursuant to the terms of any outstanding equity-based awards other than any such action taken Plan in effect as of the date hereof, (A) increase the cash compensation or benefits payable or to become payable to its directors, officers, employees or individual independent contractors, except, for employees who are not executive officers for purposes of replacingSection 16 of the Exchange Act, renewing increases in annual salary or extending a broadly applicable material Company Plan wage rate in the ordinary course of business consistent with past practice that does do not materially increase exceed 6% individually or 3% in the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofaggregate, (B) grant any rights to severance or provide termination pay to, or enter into any transaction employment or retention bonuses to severance agreement with, any director, officerofficer or other employee of the Company or any Company Subsidiary, (C) take any action to amend or waive any vesting criteria or accelerate vesting, exercisability or funding under any Plan or award granted thereunder, (D) become a party to, establish, adopt, materially amend, commence participation in or terminate any Plan or any arrangement that would have been a Plan had it been entered into prior to this Agreement, (E) grant any new awards, or amend or modify the terms of any outstanding awards, under any Plan, (F) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any Company Employee, (G) hire any employee or engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees in excess of $200,000 individually or $1,000,000 in the aggregate or (H) terminate the employment of any executive officer other service provider than for cause;
(xxi) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(xxii) change in any material respect the cash management practices, policies or procedures of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice Subsidiaries with respect to (1) employees below the level collection of Executive Vice President and (2) employees at or above the level accounts receivable, establishment of Executive Vice President in respect reserves for uncollectible accounts receivable, accrual of increases of less than 7.5% of compensation relative to their compensationaccounts receivable, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation accounts payable, purchases, prepayment of expenses or benefits under any Company Plan (including any equity-based awards)deferral of revenue, (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change from the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company Company’s and its Subsidiaries’ practices, taken as a whole, than existing Indebtedness, policies and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except procedures with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into thereto in the ordinary course of business consistent with past practice, including (Ei) commercial paper issued taking (or omitting to take) any action that would have the effect of accelerating revenues, accelerating cash receipts or accelerating the collection of accounts receivable to pre-Closing periods that would otherwise be expected to take place or be incurred in post-Closing periods, or (ii) taking (or omitting to take) any action that would have the ordinary course effect of business consistent with past practice delaying or postponing the payment of any accounts payable to post-Closing periods that would otherwise be expected to be paid in a principal amount not pre-Closing periods;
(xxiii) take any action or omit to exceed $250,000,000 take any action that is intended to or would reasonably be likely to result in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend conditions to the Merger set forth in Article VII not being satisfied; or
(and fees and expenses in connection therewithxxiv) agree, authorize or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at commit to do any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiariesthat, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of after the date of this Agreement in and prior to the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that Effective Time (unless the Company shall consult with Parent prior otherwise approve in writing (such approval not to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) be unreasonably withheld, conditioned or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ixdelayed)), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than except as otherwise expressly (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered required by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual PropertyAgreement, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed required by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) applicable Law or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary set forth on Section 6.1(b) of the Company; provided thatParent Disclosure Letter, for the avoidance of doubtParent will not, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed and will not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);permit its Subsidiaries to:
(ixi) with respect to the Retained Business, other than capital expenditures made adopt or propose any change in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming Parent’s certificate of incorporation or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 bylaws in any event manner that would prohibit the Merger or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as consummation of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, other transactions contemplated by this Agreement or would reasonably be expected toto have a material and adverse impact on the value of the Parent Common Stock that disproportionately affects the holders of Company Common Stock;
(ii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary to it or to any other direct or indirect wholly owned Subsidiary or for quarterly dividends on Parent Common Stock not in excess of 25% of Parent’s adjusted EBITDA as to any given quarter calculated in a manner consistent with Parent’s historical practices);
(iii) to the extent such action would prevent, materially delay or materially impair the consummation ability of Parent to consummate the TransactionsMerger, make any repurchase or other acquisition of any outstanding shares of Parent Common Stock (other than repurchases or other acquisitions of Parent Common Stock in open market transactions at market prices or in connection with an accelerated share repurchase transaction or similar transaction on customary terms);
(xiv) split, combine, reduce or reclassify any of its issued or unissued shares of its capital stock, or issue or authorize the issuance of any other than securities in respect of, in lieu of or in substitution for, any shares of its capital expenditures made stock in accordance any manner that would reasonably be expected to have a material and adverse impact on the value of the Parent Common Stock;
(v) take any action or omit to take any action that is intended to or would reasonably be likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(vi) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent or the Company, directly or indirectly, the right to control or direct the other party’s operations prior to the Effective Time. Prior to the Effective Time, each party will exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of Parent or the Company shall be required with respect to any matter set forth in this Section 5.01(b)(v) and other than purchases and licenses 6.1 or elsewhere in this Agreement to the extent that the requirement of film and television and production programming (includinsuch consent would, upon the advice of legal counsel, violate applicable Antitrust Laws. Nothing in this Agreement, including any of the actions, rights or restrictions set forth herein, will be interpreted in such a way as to require compliance by any party hereto if such compliance would result in the violation of any rule, regulation or policy of any Governmental Antitrust Entity or applicable Law.
Appears in 2 contracts
Sources: Merger Agreement (FBR & Co.), Merger Agreement (B. Riley Financial, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned withheld or delayed, and except as (1otherwise expressly contemplated by this Agreement or as set forth in Section 6.1 of the Company Disclosure Letter) and except as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) associates. Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless i) as otherwise contemplated by this Agreement, (ii) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned withheld or delayed), and which determination shall take into account the Company Overview Presentation, and except (iii) as (1) is required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Law or any Governmental Entity or (3iv) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend adopt or propose any change in its certificate of incorporation or bylaws by-laws or other applicable governing instruments or other similar organizational documents of any of its Subsidiaries;
(B) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate;
(C) acquire assets outside of the ordinary course of business from any other Person or with a value or purchase price in the aggregate in excess of $5 million in any transaction or series of related transactions;
(D) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than amendments to (1) the governing documents issuance of any Shares upon the exercise of Company Options set forth in Section 5.1(b)(i) of the Company Disclosure Letter in accordance with the terms of the Stock Plans or (2) the issuance of shares by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except securities convertible or exchangeable into or exercisable for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its such capital stock, or any options (including Company Options), warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(except for E) make any loans, advances or capital contributions to or investments in any Person (1) other than the Company or any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company) in excess of $4 million in the aggregate;
(F) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to another any of its capital stock (except for dividends or other distributions by any direct or indirect wholly owned Subsidiary of to the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) any wholly owned Subsidiary of the Company Disclosure Letter), (DCompany) or enter into any agreement with respect to the voting of its capital stock;
(G) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding acquisition of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, any Shares tendered by Employees in each case in accordance with past practice and connection with the terms exercise of Company Options set forth in Section 5.1(b)(ii) of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement Disclosure Letter in accordance with the terms of this Agreementthe Stock Plans);
(H) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other than a wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize issue or completely sell any debt securities or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except for borrowings and letter of credits issued under the Company’s existing revolving credit facility set forth in Section 5.1(b)(ii) of the Company Disclosure Letter;
(I) except as set forth in the ordinary course capital budgets set forth in Section 6.1(a)(I) of business consistent with past practice the Company Disclosure Letter, make or authorize any capital expenditure in excess of $2 million in the aggregate;
(J) make any material changes with respect to accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(1K) employees below the level of Executive Vice President and (2) employees at settle, release, waive or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationcompromise any pending or threatened suit, bonus action, claim, arbitration, investigation or pension, welfare litigation or other benefits prior to proceedings (i) for an amount in excess of $1 million or any obligation or liability of the Company in excess of such change, amount (Dii) increase entailing obligations that would impose any material restrictions on the severance business or termination payments or benefits payable to any director, officer, employee or other service provider operations of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined Subsidiaries or (Giii) forgive that is brought by any loans to directorscurrent, officers former or employees purported holder of any capital stock or debt securities of the Company or any of its SubsidiariesSubsidiaries relating to the transactions contemplated by this Agreement;
(ivL) incur make or change any Indebtedness material Tax election or issue tax accounting method, settle or compromise any warrants or material Tax liability other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in or agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of Taxes other than ordinary course state and local Tax inquiries;
(M) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or otherwise dispose of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstandingassets, (F) Indebtedness, the proceeds of which will be used to finance all product lines or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations businesses of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, includingother than inventory, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof supplies and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing other assets in the ordinary course of business consistent with past practice;
(vN) with respect except as expressly contemplated by this Agreement, required pursuant to Benefit Plans in effect prior to the Retained Businessdate of this Agreement and listed on the Company’s Disclosure Letter, or as otherwise required by applicable Law, (1) grant or provide for any severance or termination payments or benefits to any director or officer of the Company (the “Elected Officers”) or Employee, except, in the case of employees who are not Elected Officers, in the ordinary course of business consistent with past practice, (2) increase the compensation, perquisites or benefits payable to any Employee, except, in the case of Employees who are not Elected Officers of the Company, increases in the ordinary course of business consistent with past practice, (3) grant any equity or equity-based awards that may be settled in Shares, preferred shares or any other securities of the Company or any of its Subsidiaries or the value of which is linked directly or indirectly, in whole or in part, to the price or value of any Shares, preferred shares or other Company securities or Subsidiary securities, (4) accelerate the vesting or payment of any compensation payable or benefits provided or to become payable or provided to any Employee or (5) terminate or materially amend any existing, or adopt any new, Benefit Plan (other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) changes made in the ordinary course of business consistent with past practice and or as may be necessary to comply with applicable Laws, in either case that do not materially increase the aggregate not in excess costs of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letterany such Benefit Plans);
(viO) with respect to the Retained Businessexcept as required by applicable Laws, transferenter into, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon amend or otherwise dispose of extend any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses collective bargaining agreement or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreementslabor agreement;
(viiP) with respect except to the Retained Businessextent necessary to take any actions that the Company is otherwise permitted to take pursuant to Section 6.2 (and in such case only in accordance with the terms of Section 6.2), transfertake any action to render inapplicable, leaseor to exempt any third party from, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon any standstill arrangements or otherwise dispose the provisions of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained SubsidiariesTakeover Statutes;
(viiiQ) except with respect to SpinCo and the SpinCo Subsidiariesenter into, issueamend, deliver, sell, grant, transfer, cancel or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, modify any shares of its capital stock Material Contract or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding Contract that would be a Material Contract if in effect on the date of this Agreement in accordance with Agreement;
(R) cancel any debts or waive any claims or rights of substantial value (including the existing terms cancellation, compromise, release or assignment of such awards and the Company Stock Plansany indebtedness owed to, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to claims held by, the Company or to any other wholly owned Subsidiary of the Company; provided thatits Subsidiaries), except for the avoidance of doubt, granting customary profit participation rights cancellations made or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) waivers granted with respect to the Retained Business, claims other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not indebtedness in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 of business consistent with past practice which, in the aggregate aggregate, are not material or for claims other than indebtedness which are cancelled or waived in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as connection with the settlement of the date of actions referred to in, and to the agreement for such acquisition); provided that neither extent permitted by, clause (K) above;
(S) fail to maintain in full force and effect the material insurance policies covering the Company nor any of and its Retained Subsidiaries shall and their respective properties, assets and businesses in a form and amount consistent with past practices;
(T) enter into any such transaction agreement with a New Jersey Governmental Entity pursuant to the New Jersey Industrial Site Recovery Act, N.J.S.A. 13:1K-6, et seq. (“ISRA”) that wouldcould reasonably be expected to (i) require the Company to establish a financial assurance exceeding $1 million or (ii) otherwise result in investigation or remediation liabilities of the Company exceeding $1 million in the aggregate; or
(U) except as provided in Section 6.2 and Section 8.3(a), agree, authorize or commit to do any of the foregoing or any action which would result in any of the conditions to the Merger set forth in Article VII not being satisfied or that would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;to result in a Company Material Adverse Effect.
(xb) other than capital expenditures made The Company shall consult with Parent reasonably in accordance advance of any decision to (i) hire any “Executive Officer” (as such term is defined in Rule 3b-7 promulgated under the Exchange Act), promote any existing Executive Officer to a more senior position or otherwise appoint or promote any current director, employee, independent contractor or consultant to an Executive Officer position or (ii) adopt any material modification or material deviation from the Company’s annual operating plan, as previously provided to Parent; and in each case shall consider in good faith the reasonable recommendations of Parent in connection therewith.
(c) The Company shall, except as prohibited by applicable Law or as would jeopardize attorney-client privilege (but in such event, the Company will use its commercially reasonable efforts to keep Parent fully informed), keep Parent informed, on a current basis, of any material events, discussions, notices or changes with Section 5.01(b)(v) and other than purchases and licenses respect to any criminal or material regulatory investigation or action involving the Company or any of film and television and production programming (includinits Subsidiaries.
Appears in 2 contracts
Sources: Merger Agreement (ReAble Therapeutics Finance LLC), Merger Agreement (Djo Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from From and after the execution date of this Agreement and prior to the First Effective Time (Time, unless Parent shall otherwise approve Purchaser has consented in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)writing thereto, the Company shall, and shall cause each of its Subsidiaries to:
(i) conduct their respective businesses and operations only in its usual, use its reasonable best efforts to conduct the Retained Business in the regular and ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, ;
(ii) use commercially their reasonable efforts to (A) preserve the Retained Business’ organization intact their business organizations, (B) maintain in effect all existing material qualifications, licenses, permits, approvals and maintain the Retained Business’ existing relations other authorizations referred to in Section 5.1 and goodwill with Governmental EntitiesSection 5.12, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisersC) and keep available the services of the officers and key employees of the Company and its Subsidiaries’ present employees each Subsidiary, and agents(D) preserve existing relationships with material customers and suppliers and those Persons having business relationships with them;
(iii) promptly upon the discovery thereof notify Purchaser of the existence of any breach of any representation or warranty contained herein (or, in the case of any representation or warranty that makes no reference to Company Material Adverse Effect, any breach of such representation or warranty in any material respect) or the occurrence of any event that would cause any representation or warranty contained herein no longer to be true and correct (or, in the case of any representation or warranty that makes no reference to Company Material Adverse Effect, to no longer be true and correct in any material respect);
(iv) promptly deliver to Purchaser copies of any report, statement or schedule filed with the SEC subsequent to the date of this Agreement.
(b) Without limiting the generality of, and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (Time, unless Parent shall otherwise approve Purchaser has consented in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter)writing thereto, the Company shall not not, and shall not permit any of its Subsidiaries to:
(i) except with respect propose to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) its stockholders or amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to instruments, except for any amendment required in connection with the governing documents of any Subsidiary of performance by the Company that would not preventor its Subsidiaries of their respective obligations under this Agreement;
(ii) grant, delay issue, sell, pledge, encumber, transfer, deliver or impair the Initial Merger register for issuance or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding sale any shares of capital stock or other ownership interest in the Company (except other than issuances of Common Stock pursuant to (A) the exercise of Options outstanding on the date hereof or (B) the conversion of any Class B Common Stock outstanding on the date hereof into Class A Common Stock) or any of its Subsidiaries (other than issuances of capital stock of the Company’s Subsidiaries pursuant to the exercise of Options outstanding on the date hereof), or any securities convertible into or exchangeable for any such transaction by a wholly owned subsidiary shares or ownership interest, or any rights, warrants or options to acquire or with respect to any such shares of capital stock, ownership interest or convertible or exchangeable securities; or accelerate any right to convert or exchange or acquire any securities of the Company which remains a wholly owned Subsidiary after consummation of such transaction(other than Options pursuant to Sections 4.2(d) and 5.2(c), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereofof its Subsidiaries for any such shares or ownership interest;
(iii) in respect effect any stock split, combination, reclassification or conversion of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends otherwise change its capitalization as it exists on the Common Stock as described in Section 5.01(b)(idate hereof;
(iv) of the Company Disclosure Letter)directly or indirectly redeem, (D) enter into any agreement with respect to the voting of its capital stockpurchase or otherwise acquire, or (E) purchaseoffer to redeem, repurchase, redeem purchase or otherwise acquire acquire, any shares of its capital stock or capital stock of any securities convertible or exchangeable into or exercisable for any shares of its capital stock (Subsidiaries, other than (1) pursuant to by repurchasing restricted stock or upon the forfeiture of, or withholding cashless exercise of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Unitsoptions, in each case in accordance with past practice and with the terms ordinary course of business;
(v) sell, lease, license, encumber or otherwise dispose of any of its assets (including Intellectual Property of the Company Stock Plans as or its Subsidiaries or capital stock of any of its Subsidiaries), except in effect on the date ordinary course of this Agreement business (excluding capital stock of its Subsidiaries);
(vi) merge with or as modified after the date acquire (by merger, consolidation, acquisition of this Agreement stock or assets, joint venture or otherwise of a direct or indirect ownership interest or investment) in accordance with the terms one transaction or a series of this Agreement) or (2) purchasesrelated transactions any Person, repurchasesfor an aggregate consideration in excess of $1.0 million, redemptions any equity interests or other acquisitions of securities of any wholly owned Subsidiary Person, any division or business of any Person or all or substantially all of the Company by assets of any Person;
(vii) incur or assume any indebtedness for borrowed money, issue or sell any debt securities of the Company or any other wholly owned Subsidiary of its Subsidiaries or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Company);
(ii) merge or consolidate with obligations of any other Person, or restructure, reorganize or completely or partially liquidate Person (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any except wholly owned Subsidiaries of the Company that would not preventor in the ordinary course of business up to $1.0 million), materially delay in any such case in excess of $1.0 million, except for the incurrence of indebtedness for working capital purposes in the ordinary course of business under the Company’s or materially impair its Subsidiaries’ existing credit facilities and capital expenditures made in accordance with the Transactions)Company’s or its Subsidiaries’ previously adopted capital budgets, copies of which have been provided to Purchaser;
(iiiviii) make or forgive any loans, advances or capital contributions to, or investments in, any other Person;
(ix) (A) enter into any new employment, severance, consulting or salary continuation agreements with any newly hired employees other than in the ordinary course of business or enter into any of the foregoing with any existing officers or directors or alter or amend in any way, except as expressly may be required by Law or pursuant to any Company Plan Contract or commitment in existence as in effect on of the date hereof: (A) establish, adopt, amend any compensation or terminate any material Company Plan or amend the terms of any outstanding equity-based awards benefits due to employees other than any such action taken for purposes of replacing, renewing increases or extending a broadly applicable material Company Plan new incentive awards in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, practices; (B) except with respect to the Bridge Facility, in replacement of, as required by Law or to refinance, any existing Indebtedness on then prevailing market terms Company Employee Plan or on terms substantially consistent with Material Contract or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in increase the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at compensation of or grant new incentive awards to any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations director or officer of the Company or any of its Subsidiaries with respect other than annual restricted stock granted to such Indebtedness directors; (and Parent and its SubsidiariesC) except as required by Law, includinga Material Contract existing on the date hereof or pursuant to a Company severance policy or Company Employee Plan existing on the date hereof, following the Distribution, the Retained Subsidiaries, shall not have grant any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings severance or replacements thereof and of commitments thereunder, and termination pay to any refinancings director or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 officer of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that (D) except as required by Law, adopt any additional employee benefit plan; (E) except as required by any existing Company Employee Plan or agreement thereunder, provide for the aggregate principal amount payment of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and amounts as a result of the consummation of the transactions contemplated by this Agreement; or (LF) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect pay any bonuses except to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties extent earned under existing awards or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth new incentive awards listed in Section 5.01(b)(v5.10(h)(i)(6) of the Company Disclosure Letter;
(vix) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon adopt or otherwise dispose of amend in any material Intellectual Property; provided that this clause respect or terminate any employee benefit plan or arrangement;
(vixi) shall not restrict (A) make any material changes in the type or amount of their insurance coverage or permit any material insurance policy naming the Company or any of its Subsidiaries as a beneficiary or a loss payee to be canceled or terminated other than in the ordinary course non-exclusive licenses of business;
(xii) except as required by changes in applicable Law or ordinary course security interests in connection with GAAP, change any accounting methods, principles or practices used by the production Company or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licensesits Subsidiaries, in each case, as concurred by its independent public accountants;
(xiii) (A) settle, pay or discharge, any litigation, investigation, arbitration, proceeding or other claim, liability or obligation arising from the conduct of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not business in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not an amount in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares1.0 million, except (A) for any Shares issued pursuant to Company Restricted Stock Unitssettlement, Company Performance Stock Units payment or discharge by FTD, Inc. and Company Deferred Stock Units outstanding on ▇▇▇.▇▇▇ Inc. of their obligations under that certain Stipulation and Agreement of Compromise, Settlement and Release, dated as of August 4, 2003 (the date “Stipulation”) entered into in settlement of this Agreement in accordance with the existing terms of such awards and consolidated shareholder class actions entitled “In re ▇▇▇.▇▇▇, Inc. Shareholders Litigation,” Delaware ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇-▇▇, provided, that the Company Stock Plans, (B) Investment Preferred Stock Settlement (as defined in the Bridge FacilityStipulation) has not been and shall not be changed or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 altered in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of material way since the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the TransactionsStipulation;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 2 contracts
Sources: Merger Agreement (FTD Inc), Merger Agreement (FTD Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after From the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writingTime, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by set forth in the Transaction Documents (including in connection with the Separation and the Distribution Disclosure Letter or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed required pursuant to this Agreement, unless Purchaser has consented in Section 5.01(a) of the Company Disclosure Letter)writing thereto, the Company shall, and shall cause each of its Subsidiaries to:
(i) conduct its operations according to its usual, use its reasonable best efforts to conduct the Retained Business in the regular and ordinary course of business consistent with past practice, and the Company shall, and shall cause each of ; (ii) use its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable best efforts to preserve intact their business organizations and goodwill, to maintain in effect all existing qualifications, licenses, Permits, approvals and other authorizations referred to in Sections 6.1 and 6.15, to keep available the Retained Business’ organization intact services of their officers and employees and to maintain the Retained Business’ existing relations and goodwill satisfactory relationships with Governmental Entities, customers, suppliers, distributors, licensorsbrokers, creditorssales agents and all other persons having business relationships with them, lessorsincluding through the payment of additional compensation reasonably acceptable to Purchaser to such distributors, employees brokers and business associates sales agents reasonably calculated to maintain at least the current level of merchandising, distribution and others having shelving; (iii) promptly notify Purchaser upon becoming aware of any material business dealings breach of any representation, warranty or covenant contained in this Agreement, the occurrence of any event that would cause any representation, warranty or covenant contained in this Agreement no longer to be true and correct in all material respects or any breach of the representations and warranties specified in Section 6.17(iii); (iv) promptly deliver to Purchaser true and correct copies of any report, statement or schedule filed with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as SEC subsequent to itself and its Subsidiaries that, from and after the date of this Agreement and prior any internal monthly reports prepared for or delivered to the First Effective Time Board of Directors after the date hereof; and (unless Parent shall otherwise approve v) deliver, within 20 business days after the end of each accounting month, monthly consolidated financial statements, in writingthe same format as heretofore furnished to Purchaser, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account for the Company Overview Presentationand its Subsidiaries for and as of the end of each such month.
(b) From the date of this Agreement to the Effective Time, and except as (1) required by applicable Law, (2) expressly required by set forth in the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), unless Purchaser has consented in writing thereto, the Company shall not not, and shall not permit any of its Subsidiaries to:
(i) amend its Certificate of Incorporation or Bylaws or comparable governing instruments; (ii) except with respect to SpinCo the issuance of treasury stock under the Company's savings plan, the Directors' Plans and the SpinCo Subsidiaries 1991 Employee Stock Purchase Plan in the ordinary course of business consistent with the terms of the governing documents, or where the documents do not govern such issuances, in accordance with the past practice of the Company representing in the aggregate no more than 40,000 shares of Common Stock, issue, sell, pledge or otherwise dispose of any shares of its capital stock or other ownership interest in the Company (other than issuances of Common Stock in respect of any exercise of Options outstanding on the date hereof and disclosed in the case Disclosure Letter) or any of clause (A))the Subsidiaries, (A) amend its certificate or any securities convertible into or exchangeable for any such shares or ownership interest, or any rights, warrants or options to acquire or with respect to any such shares of incorporation capital stock, ownership interest, or bylaws (convertible or comparable governing documents) (other than amendments exchangeable securities; or accelerate any right to the governing documents of convert or exchange or acquire any Subsidiary securities of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify any of its outstanding shares of capital stock (except Subsidiaries for any such transaction by a wholly owned subsidiary shares or ownership interest; (iii) effect any stock split, reverse stock split, stock dividend, subdivision, reclassification or similar transaction, or otherwise change its capitalization as it exists on the date hereof; (iv) grant, confer, award or amend any option, warrant, convertible security or other right to acquire any shares of the Company which remains a wholly owned Subsidiary after consummation of such transaction), its capital stock or take any action to cause to be exercisable any otherwise unexercisable option under any stock option plan or restricted stock plan; (Cv) declare, set aside or pay any dividend (other than regular quarterly cash dividends at a rate not in excess of $.46 per share of Common Stock) or make any other distribution payable in cash, stock or property (or any combination thereof) in payment with respect of to any shares of its Common Stock or other capital stock or ownership interests (except for (1) any dividends or distributions paid other than such payments by a direct or indirect wholly wholly-owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or another wholly-owned Subsidiary); (2vi) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)directly or indirectly redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire any shares of its capital stock or the capital stock of any securities convertible or exchangeable into or exercisable for any shares of its capital stock Subsidiaries; (other than vii) sell, lease, assign, transfer or otherwise dispose of (1by merger or otherwise) any of its property, business or assets (including, without limitation, receivables, leasehold interests or Intellectual Property and including any sale leaseback transaction) except for (i) the sale of inventory in the ordinary course of business, (ii) the disposition of assets pursuant to the forfeiture Restructuring as contemplated by Section 8.2(c)(i) and (iii) other asset sales for fair value in the ordinary course of business provided that the proceeds of such other asset sales do not exceed $2,000,000 in any single transaction or $10,000,000 in the aggregate prior to the Effective Time; (viii) settle or compromise any pending or threatened Litigation without Purchaser's consent (which consent will not be unreasonably withheld or delayed), other than settlements (a) of product liability Litigation in the ordinary course of business consistent with the Company's past practice of settling similar product liability claims, provided, in the case of settlements of product liability Litigations in excess of $100,000 only (I) the Company has kept Purchaser reasonably apprised of the status of such Litigation and has provided Purchaser with reasonable advance notice of its intention to settle any such Litigation and (II) the settlement would not have a Material Adverse Effect, (b) of other Litigations which involve solely the payment of money (without admission of liability) not to exceed $200,000 in any one case and (c) of Tax Litigation, which is governed by paragraph (xiii); (ix) make any advance, loan, extension of credit or capital contribution to, or purchase or acquire (by merger or otherwise) any stock, bonds, notes, debentures or other securities of, or withholding any assets constituting a business unit of, or make any other investment in, any person, firm or entity, except (a) extensions of Taxes with respect totrade credit and endorsements of negotiable instruments and other negotiable documents in the ordinary course of business, Company Restricted Stock Units(b) investments in cash and cash equivalents, Company Deferred Stock Units or Company Performance Stock Units(c) payroll and travel advances in the ordinary course of business, (d) investments in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of Subsidiaries, and (e) the Company acquisition by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type Minority JV Interest as contemplated by Section 5.01(b)(vii8.2(c)(ii); (x) or Section 5.01(b)(ix) which are not restricted thereby make any capital expenditures in the aggregate for the Company and other than mergers or consolidations of a Subsidiary its Subsidiaries in excess of the Company amounts specified in the Company's budget for capital expenditures, a true and complete copy of which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amonghas previously been delivered to Purchaser, or otherwise acquire assets having a value, in the restructuringaggregate, reorganization in excess of $500,000 not in the ordinary course of business; (xi) incur, assume or liquidation ofcreate any indebtedness for borrowed money or the deferred purchase price for property or services or pursuant to any capital lease or other financing, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan indebtedness incurred in the ordinary course of business consistent with past practice that does for working capital purposes pursuant to the Company's existing credit facilities or commercial paper program as disclosed in the Disclosure Letter and except for the incurrence, assumption or creation of indebtedness in the ordinary course of business consistent with the past practice of the Company not exceeding $2,000,000 in any one instance or $10,000,000 in the aggregate at any one time outstanding; or amend in a manner materially increase adverse to the cost Company, any of such the Company's existing credit facilities; (xii) assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person except wholly-owned Subsidiaries of the Company Plan and except for obligations in the ordinary course of business consistent with the past practice of the Company not exceeding $1,000,000 individually and $5,000,000 in the aggregate; (xiii) make any material Tax election (unless required by law or unless consistent with prior practice) or settle or compromise any material income tax liability except, in each case, if Purchaser is given reasonable prior notice thereof; (xiv) waive or amend any term or condition of any confidentiality or "standstill" agreement to which the Company is a party and which relates to a business combination with the Company or the purchase of shares or assets of the Company; (xv) grant or amend any stock-related or performance awards; (xvi) except with respect to agreements which are terminable at will by the Company without any material penalty to the Company, enter into or amend any legally binding employment, severance, consulting or salary continuation agreements with any officers, directors or employees or grant any increases in compensation or benefits provided under such to employees other than increases to officers and employees in the ordinary course of business consistent with the past practice of the Company; (xvii) adopt, amend or terminate any employee benefit plan or arrangement (except as expressly contemplated by this Agreement); (xviii) enter into (a) any agreements with distributors or sales agents other than agreements terminable without penalty on less than 30 days' notice, (b) any agreements to distribute products for others or which restrict the ability of the Company Plan based on or its Subsidiaries or affiliates to compete or (c) any other agreements, other than agreements relating to product promotions, that would constitute Material Contracts; or amend any of the cost foregoing agreements as exist on the date hereof; (xix) amend, change or waive (Bor exempt any person or entity from the effect of) grant the Rights Agreement, except in connection with the exercise of its fiduciary duties by the Board of Directors as set forth in Section 8.1 of this Agreement or provide in connection with the transactions contemplated under this Agreement; (xx) make any transaction material changes in the type or retention bonuses amount of their insurance coverages; (xxi) except as may be required by law or generally acceptable accounting principles and with prior written notice to the Purchaser, change any material accounting principles or practices used by the Company or its Subsidiaries; (xxii) effect any material change in the Company's advertising, product promotion or brand support policies or programs or commit to any directorsignificant new product promotion or advertising campaign except, officerin each case, employee for matters in the ordinary course of business consistent with the past practice of the Company; (xxiii) effect any material change in the Company's billing practices or other service provider sales terms, or cause a material acceleration or delay in the manufacture, shipment or sale of inventory, the collection of accounts or notes receivable or the payment of accounts or notes payable except, in each case, for matters in the ordinary course of business consistent with the past practice of the Company; (xxiv) enter into any Contracts for Derivatives, except for spot, option and forward Contracts entered into in the ordinary course of business consistent with the past practice of the Company and with the Company's policies regarding Derivatives as previously disclosed to Purchaser; (xxv) waive, relinquish, release or terminate any right or claim, including any such right or claim under any Material Contract or permit any rights of its Subsidiariesmaterial value to use any Intellectual Property to lapse or be forfeited, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiariesin each case, except in the ordinary course of business consistent with the past practice with respect to of the Company; (1xxvi) employees below apply for, consent to, or acquiesce in, the level appointment of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationa trustee, bonus or pensionreceiver, welfare sequestrator or other benefits prior to such change, (D) increase custodian for any substantial part of the severance or termination payments or benefits payable to any director, officer, employee or other service provider property of the Company or any Significant Subsidiary, or make a general assignment for the benefit of its Subsidiariescreditors, or permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Company or any Significant Subsidiary; (Exxvii) take any action to accelerate cause the vesting or payment Common Stock to be delisted from the New York Stock Exchange prior to the completion of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined Offer or (Gif no Offer is made) forgive the Merger; or (xxviii) agree in writing or otherwise to take any loans to directors, officers or employees of the foregoing actions.
(c) The Company or any will use reasonable best efforts to (i) carry out its restructuring announced during the third quarter of fiscal 1996 as described in the Disclosure Letter (the "Restructuring") in a manner and on a schedule materially consistent with its plans as previously disclosed to Purchaser, including the sale of its Subsidiaries;
manufacturing facilities in Rutland, Vermont and Tipperary, Ireland and (ivii) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtednessacquire, except (A) in the ordinary course of business consistent with past practice in for a principal amount purchase price not to exceed $400,000,000 1,000,000 and on other terms reasonably acceptable to Purchaser, the minority interest (the "Minority JV Interest") held by its joint venture partner (Northeast No. 6 Pharmaceutical Factory of China) in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to Company's Chinese joint venture subsidiary. At Purchaser's request, the Company and its Subsidiarieswill cooperate with Purchaser (including, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, by conducting mutual negotiations or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1by seeking declaratory relief) to minimize the extent not drawn upon and payments are not triggered thereby, letters possible impact on Purchaser and/or its Subsidiaries of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not any non-compete covenants to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, or affiliates may be subject or may be parties following the Distribution, the Retained Subsidiaries, Closing. The Company shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 keep Purchaser reasonably apprised of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal status of each of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, matters referred to in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii8.2(c);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin.
Appears in 2 contracts
Sources: Merger Agreement (Procter & Gamble Co), Merger Agreement (Procter & Gamble Co)
Interim Operations. (a) The Company covenants During the period commencing on the date hereof and agrees as to itself and its Subsidiaries that, from and after running until the execution earlier of the Effective Time or the termination of this Agreement and prior to in accordance with ARTICLE VIII (the First Effective Time “Pre-Closing Period”), except (unless Parent shall otherwise approve in writingi) as expressly contemplated, which approval shall not be unreasonably withheldrequired or permitted by this Agreement, conditioned or delayed, and except (ii) as (1) required by applicable Law, (2iii) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or as contemplated by the Final Step Plan) conditioned), or (3iv) otherwise expressly disclosed in as set forth on Section 5.01(a) 6.1 of the Company Disclosure Letter)Schedule, the Company shallwill, and shall will cause each of its Subsidiaries to, use its and their commercially reasonable best efforts to (A) conduct the Retained Business their businesses in the ordinary course of business consistent with past practice, and the Company shall(B) preserve intact in all material respects their respective assets, properties, business organizations and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations relationships and goodwill with Governmental Entitiespartners, customers, clients, suppliers, distributors, licensors, creditorslicensees, lessorsemployees, employees contractors and business associates and others having other Persons with which it has material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agentsdealings.
(b) Without limiting During the generality ofPre-Closing Period, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) as expressly contemplated, required or permitted by this Agreement, (2) as required by applicable Law, (23) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution) such approval not to be unreasonably withheld, delayed or conditioned), or (34) otherwise expressly disclosed in as set forth on Section 5.01(b) 6.1 of the Company Disclosure Letter)Schedule, the Company shall not will not, and shall not permit any of will cause its Subsidiaries not to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than x) adopt any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to (y) adopt any change in the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities comparable organizational documents of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)’s Subsidiaries;
(ii) (A) merge or consolidate the Company or any of its Subsidiaries with any other Person, or (B) restructure, reorganize reorganize, recapitalize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers dissolve or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, enter into any agreement or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect arrangement imposing restrictions on the date hereof: (A) establishassets, adopt, amend operations or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensationother than recapitalization, bonus liquidation or pension, welfare or other benefits dissolution of any director, officer or employee wholly owned Subsidiary of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans that are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial immaterial to the Company and its Subsidiaries, taken as a whole, than existing Indebtednessand to the extent such actions are not expected to be adverse to Parent (provided that this Section 6.1(b)(ii) shall not prevent the structuring of a transaction specifically permitted by Section 6.1(b)(xiii) in the form of a merger or consolidation (provided, further, that (x) the use of such structure is consistent with past practice and (y) the Company is not merging or consolidating with a maturity date no more than 10 years after any other Person));
(iii) issue, sell, pledge, encumber, dispose of or grant, or authorize the date issuance, sale, pledge, encumbrance, disposition or grant of, any shares of capital stock or other equity interests of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, Company or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and any of its Subsidiaries, taken as a wholeor securities convertible or exchangeable into or exercisable for any shares of such capital stock or other equity interests, than or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to acquire any shares of such capital stock or other equity interests or such convertible or exchangeable securities or the Indebtedness being replaced value of which is otherwise derived from any shares of such capital stock or refinancedother equity interests or such convertible or exchangeable securities (collectively, and “Company Securities”), in each case with a maturity date no more case, other than 10 years after the date of the Contract evidencing (A) any such Indebtedness, (C) intercompany Indebtedness transaction solely among the Company and its wholly wholly-owned Subsidiaries or solely among the Company’s wholly-owned Subsidiaries, or (DB) any grant or issuance of shares of Common Stock (1) in respect of any exercise of Company Options, (2) in respect of any exercise of Company Warrants, or (3) pursuant to vesting or settlement of any Company Restricted Shares, in each case, solely to the extent not drawn upon such Company Options, Company Warrants or Company Restricted Shares, as applicable, are outstanding as of the date of this Agreement or granted after the date hereof in accordance with this Agreement and payments are not triggered therebysolely in accordance with the terms of the underlying agreement pursuant to which such Company Options, letters of creditCompany Warrants, bank guaranteesor Company Restricted Shares, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programsas applicable, were issued and, in each the case issuedof Company Equity Awards, made the applicable Company Equity Plan;
(iv) make any loans, advances or entered into capital contributions to or investments in any Person (other than to the ordinary course Company or any of business consistent with past practiceits wholly-owned Subsidiaries), other than (EA) commercial paper issued any delayed collection of trade payables in the ordinary course of business consistent with past practice and (B) any such transaction solely among the Company and its wholly-owned Subsidiaries or solely among the Company’s wholly-owned Subsidiaries;
(v) declare, set aside, make or pay any dividend or other distribution, payable in a principal amount not cash, stock, property or otherwise with respect to exceed $250,000,000 any Company Securities, except for dividends or other distributions paid by any wholly-owned Subsidiary of the Company to the Company or to any other wholly-owned Subsidiary of the Company;
(vi) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any Company Securities except for (A) any such transaction solely among any of the Company’s wholly-owned Subsidiaries, or (B) acquisitions of shares of Common Stock in satisfaction of withholding obligations in respect of the settlement or exercise of Company Equity Awards that are outstanding as of the date of this Agreement or granted after the date hereof in accordance with this Agreement;
(vii) create, incur, assume or guarantee any Indebtedness or issue any debt securities or guarantees of the same or any other Indebtedness, except for borrowings in the aggregate at any time outstanding, (F) Indebtedness, ordinary course of business for working capital purposes under the proceeds of which will be used to finance all Existing Credit Facility; guarantees or credit support provided by the Company or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount its Subsidiaries of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries in the ordinary course of business consistent with respect past practice to the extent such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations is in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof existence on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement or incurred in compliance with clause (A) of this Section 6.1(b)(vii), and any Indebtedness solely among the Company and its wholly-owned Subsidiaries or solely among the Company’s wholly-owned Subsidiaries;
(viii) (A) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement, or (B) amend, modify or waive in any material respect in a manner adverse to the Company or any of its Subsidiaries or terminate any Material Contract (other than (x) amendments, modifications or waivers in the ordinary course of business consistent with past practice or (y) expirations of any such Contract in connection accordance with a Sky Acquisition and its terms);
(ix) make any material changes with respect to financial accounting policies or procedures, except as required by Law or by U.S. GAAP or official interpretations with respect thereto or by any Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(x) settle or compromise any Action, except for any settlement or comprise that (A) does not for speculative purposes; provided that require payments from the Company shall consult or its Subsidiaries exceeding $50,000 individually (for any single claim or of related claims) or $100,000 in the aggregate (for all such settlements or compromises from and after the date hereof), after taking into account any insurance coverage amounts with Parent prior to entering into hedging activities in connection with Indebtedness respect thereto under the policies maintained by the Company or any of its Subsidiaries, and (B) does not (x) impose any non-de minimis restriction on the business or operations of the type described in clauses Company or any of its Subsidiaries (Gor any restriction on Parent or any of its Subsidiaries other than the Company and its Subsidiaries after the Closing) or (Hy) aboveinclude any non-de minimis non-monetary or injunctive relief, or the admission of any wrongdoing, by the Company or any of its Subsidiaries or any of their respective employees, officers or directors;
(Kxi) Indebtedness and replacements and refinancings thereof incurred in connection with assign, transfer, sell, lease, license, sublicense, encumber (other than Permitted Liens), abandon, permit to lapse, or otherwise surrender, relinquish or dispose of any material assets or property (including any material Owned IP) except transactions solely among the funding of Star India Private Limited Company and its wholly-owned Subsidiaries or solely among the Company’s wholly-owned Subsidiaries; provided that provided, that, for the aggregate principal amount avoidance of such Indebtednessdoubt, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing the loss of a customer or client in the ordinary course of business consistent with past practiceshall not be covered by this Section 6.1(b)(xi);
(vxii) with respect except for such actions (i) required by Benefit Plans in existence as of the date hereof, (ii) required by applicable laws, (iii) otherwise reasonably necessary to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) renew Benefits Plans in the ordinary course of business consistent with past practice and (in a manner that does not materially increase benefits or result in a material increase in administrative costs except in either case from changes in costs in the aggregate not market), or (iv) otherwise expressly contemplated by the terms of this Agreement: (A) increase the compensation or other benefits payable or provided to any Service Provider; (B) increase or accelerate or commit to increase or accelerate the funding, payment or vesting of any benefits provided under any Benefit Plan; (C) grant or promise to grant any cash or equity or equity-based incentive awards, bonus, change of control, severance or retention award to any Service Provider, (D) establish, adopt, enter into, terminate or materially amend any material Benefit Plan (including any Benefit Plans and arrangements described in Section 5.1(i)(iv)), or (E) terminate the employment of (other than for cause) or hire or promote any Service Provider that receives or would receive annual base compensation in excess of 120% $150,000;
(xiii) acquire any business, assets or capital stock or other equity interests of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation or otherwise), other than the acquisition of assets from vendors or suppliers of the Company or any of its Subsidiaries in the ordinary course of business;
(xiv) other than where such action is required by Law, (A) make (inconsistent with past practice), change or revoke any material Tax election; (B) change any annual Tax accounting period or material method of Tax accounting, (C) file any material amended Tax Return, (D) settle or compromise any material claim related to Taxes for an amount materially in excess of amounts reflected reserved, (E) enter into any material closing agreement with respect to Taxes, (F) surrender any right to claim a material Tax refund for an amount materially in excess of amounts reserved, or (G) file any material Tax Return (except consistent with past practice) (it being agreed and understood that, notwithstanding any other provision, including Section 6.1(b)(ix) (insofar as it relates to Taxes), no other subsection of this Section 6.1(b) shall apply to Tax compliance matters);
(xv) other than in accordance with the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v6.1(b)(xv) of the Company Disclosure LetterSchedule, incur or commit to any capital expenditure or expenditures, except capital expenditures of less than $50,000 individually or $100,000 in the aggregate;
(vixvi) with respect to the Retained Businessimplement or announce any employee layoffs, transferplant closings, leasereductions in force, licensefurloughs, selltemporary layoffs, assignmaterial salary or wage reductions, let lapseor material work schedule changes, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less other than $35,000,000 individually if the transaction is not individual employment terminations in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreementsbusiness;
(viixvii) become a party to, establish, adopt, materially amend, commence participation in or terminate any collective bargaining agreement or other agreement with respect to the Retained Businessa labor union, transferworks council or similar organization;
(xviii) apply for, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon seek or otherwise dispose of obtain any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for Company Permit that (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair impede the consummation of the Transactionstransactions contemplated hereby, or (B) would require Parent to make any filing or notice with or disclosure to any Governmental Authority;
(xxix) terminate, cancel or allow to lapse any material insurance coverage maintained by the Company or any of its Subsidiaries without replacing such coverage with a comparable amount of insurance coverage, other than capital expenditures made in accordance the ordinary course of business;
(xx) enter into a new line of business or abandon or discontinue any existing line of business; or
(xxi) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement is intended to give Parent or Merger Sub or any of their Affiliates, directly or indirectly, the right to control or direct the operations of the Company and its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with Section 5.01(b)(v) the terms and other than purchases conditions of this Agreement, complete control and licenses of film supervision over its and television and production programming (includinits Subsidiaries’ respective operations.
Appears in 2 contracts
Sources: Merger Agreement (Streamline Health Solutions Inc.), Merger Agreement (Streamline Health Solutions Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which with such approval shall not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation), and except as (1) otherwise expressly required by this Agreement or as required by applicable Law, (2) conduct its business in the Ordinary Course of Business and, to the extent consistent therewith, shall use its reasonable best efforts to, preserve its business organization intact and maintain satisfactory relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the services of its present employees and agents. Without limiting the generality of and in furtherance of the foregoing sentence, from the date of this Agreement until the Effective Time, except as otherwise expressly required by this Agreement, required by applicable Law, required by the Transaction Documents (including express terms of any Company Material Contract made available to Parent prior to the date of this Agreement, or approved in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter)writing by Parent, the Company shall not and shall not permit any of its Subsidiaries tonot:
(i) except adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate the Company with any other Person or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or business;
(iii) acquire assets from any other Person, other than acquisitions of raw materials, inventory, equipment, tooling, and supplies in the Ordinary Course of Business;
(iv) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or otherwise enter into any Contract or understanding with respect to SpinCo and the SpinCo Subsidiaries voting of, any shares of capital stock of the Company, securities convertible or exchangeable into or exercisable for any such shares of capital stock, or any options, warrants or other rights of any kind to acquire any such shares of capital stock or such convertible or exchangeable securities (other than in respect of Company Options outstanding as of the case date of clause this Agreement in accordance with their terms and, as applicable, the Equity Plan as in effect on the date of this Agreement);
(A))v) enter into any Contracts or other arrangements between the Company, (A) amend its certificate of incorporation on the one hand, and any director or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary officer of the Company that would not preventor any Person beneficially owning one percent or more of the outstanding Shares, delay or impair the Initial Merger or on the other Transactions)hand, except for compensatory arrangements entered into in the Ordinary Course of Business with Company Employees consistent with Section 7.1(a)(xxiii) and transactions with Parent or its Affiliates;
(Bvi) create or incur any Encumbrance that is not incurred in the Ordinary Course of Business on any of the assets of the Company;
(vii) make any loans, advances, guarantees or capital contributions to or investments in any Person;
(viii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to its Common Stock;
(ix) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for redeem, purchase or otherwise acquire, directly or indirectly, any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock Common Stock;
(x) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security);
(xi) enter into any Contract that would have been a Company Material Contract had it been entered into prior to this Agreement;
(xii) other than (1) with respect to Company Material Contracts related to Indebtedness, which shall be governed by Section 7.1(a)(x), terminate or amend, modify, supplement or waive, or assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Company Material Contract, except for (x) expirations of any such Contract in the forfeiture of, or withholding Ordinary Course of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice Business and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company such Contract with no further action by the Company or other party to such Contract, except for any other wholly ministerial actions, (y) non-exclusive licenses under Intellectual Property Rights owned Subsidiary or purported to be owned by the Company granted in the Ordinary Course of Business or (z) terminations, amendments, modifications, assignments, conveyances, transfers or expirations where, concurrent therewith, the Company)Company enters into a replacement Contract providing substantially similar property, products or services on substantially similar terms;
(iixiii) merge cancel, modify or consolidate with waive any other Person, debts or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated claims held by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, waive any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)material rights;
(iiixiv) except as expressly required provided for by Section 7.13, amend, modify, terminate, cancel or let lapse an Insurance Policy, unless simultaneous with such termination, cancellation or lapse of any such Insurance Policy, a replacement self-insurance program is established by the Company Plan or a replacement policy underwritten by an insurance company of nationally recognized standing is in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policy for substantially similar premiums, as applicable, as in effect on as of the date hereof: of this Agreement;
(xv) other than with respect to Transaction Litigation, which shall be governed by Section 7.16, and settlement of trade accounts payable in the Ordinary Course of Business, settle or compromise any Proceeding for an amount in excess of $100,000 individually or $250,000 in the aggregate during any calendar year;
(xvi) make any changes with respect to the legal structure of the Company or to the Company’s accounting policies or procedures, except as required by changes in GAAP or Law;
(xvii) enter into any line of business in any geographic area other than the existing lines of business of the Company and lines of products and services reasonably ancillary to any existing line of business;
(xviii) make any material changes to the existing lines of business of the Company or adopt or make any material modifications to the Company’s strategic plan;
(xix) make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any Tax claim, audit, assessment or dispute, surrender any right to claim a refund or take any action which would be reasonably expected to result in an increase in the Tax liability of the Company, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its Affiliates;
(xx) transfer, sell, lease, divest, cancel, allow to lapse or expire, or otherwise dispose of or transfer, or permit or suffer to exist the creation of any Encumbrance upon, any assets (tangible or intangible, including any Company Intellectual Property Rights), Licenses, product lines or business of the Company, except in connection with services provided in the Ordinary Course of Business or sales of obsolete assets;
(xxi) cancel, abandon or otherwise allow to lapse or expire any Company Intellectual Property Rights, except in the Ordinary Course of Business with respect to Company Intellectual Property Rights that are not material to any business of the Company;
(xxii) adopt or implement any shareholder rights plan or similar arrangement;
(xxiii) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as required by Law, (A) increase in any manner the compensation or fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, except reasonable holiday bonuses payable to all employees, reasonable compensation adjustments for customer service employees, and reasonable compensation adjustments required for exceptional performance or specific needs not to exceed $100,000 in the aggregate unless approved in advance by the Board, (B) become a party to, establish, adopt, amend amend, commence participation in or terminate any material Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding equity-based awards other than awards, under any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeBenefit Plan, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan Benefit Plan, (including E) forgive any equity-based awardsloans or make any extensions of credit in the form of a personal loan to any Company Employee (other than routine travel advances issued in the Ordinary Course of Business), (F) change hire any actuarial employee or other assumptions used to calculate funding obligations engage any independent contractor (who is a natural person) with respect to any Company Plan an annual salary or to change the manner wage rate or consulting fees and target cash bonus opportunity in which contributions to such plans are made or the basis on which such contributions are determined excess of $100,000 or (G) forgive terminate the employment of any loans to directors, officers or employees of the Company or any of its Subsidiariesexecutive officer other than for cause;
(ivxxiv) incur become a party to, establish, adopt, amend, commence participation in or terminate any Indebtedness or issue any warrants collective bargaining agreement or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and agreement with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednesslabor union, (B) except with respect to the Bridge Facilitylabor organization, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds works council or similar credit support instruments organization;
(xxv) fail to maintain policies and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not procedures designed to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in ensure compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition FCPA and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practiceOther Anti-Bribery Laws;
(vxxvi) fail to maintain policies and procedures designed to ensure compliance with respect the Export and Sanctions Regulations in each jurisdiction in which the Company operates or is otherwise subject to jurisdiction;
(xxvii) take any action or fail to take any action that is reasonably expected to result in any of the conditions to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 Merger set forth in Section 5.01(b)(v) of the Company Disclosure LetterArticle VIII not being satisfied;
(vixxviii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place create a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);or
(ixxxix) with respect to the Retained Businessagree, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend authorize or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;foregoing.
(xb) other than capital expenditures made Nothing set forth in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinthis Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s operations prior to the Effective Time
Appears in 2 contracts
Sources: Merger Agreement (AeroGrow International, Inc.), Merger Agreement (SMG Growing Media, Inc.)
Interim Operations. (a) The From the date of this Agreement until the earlier of the Effective Time and termination of this Agreement in accordance with its terms, the Company covenants and agrees as to itself and its Subsidiaries thatthat it will use its commercially reasonable efforts, from and after the execution date of this Agreement and prior to until the First Effective Time (Time, unless Parent shall otherwise approve in writing, which approval to cause the business of it and its Subsidiaries to be conducted, in all material respects, in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and its Subsidiaries shall not be unreasonably withhelduse their respective commercially reasonable efforts to (a) preserve their business organizations, conditioned or delayed, assets and except as (1) required by applicable Lawlines of business intact, (2b) expressly required maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations that are material to the Company and its Subsidiaries, taken as a whole, (c) maintain all leases and all personal property (reasonable wear and tear excepted) that are material to the Company and its Subsidiaries, taken as a whole, used by the Transaction Documents (including in connection with the Separation Company and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts and necessary to conduct the Retained Business its business in the ordinary course of business consistent with past practicepractice (but with no obligation to renew or extend any lease or to otherwise exercise any rights or options it may have under any lease, including but not limited to rights to purchase or increase or decrease its current properties) and the Company shall, (d) maintain in all material respects its and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ their existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First earlier of the Effective Time and the termination of this Agreement in accordance with its terms, except (unless A) as otherwise expressly required by this Agreement, (B) as Parent shall otherwise may approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except (C) as (1) required by applicable LawLaws or definitive interpretations thereof or by any Governmental Entity, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3D) otherwise expressly disclosed as set forth in Section 5.01(b4.1(a) of the Company Disclosure Letter), the Company shall not will not, and shall will not permit any of its Subsidiaries Subsidiaries, to:
(i) except with respect adopt any amendments to SpinCo and the SpinCo Subsidiaries (other than its charter or bylaws or, in the case of clause any Subsidiary that is not a corporation, similar applicable organizational documents;
(A)), ii) (A) amend its certificate adopt a plan of incorporation complete or bylaws (partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or comparable governing documents) other reorganization (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactionsthis Agreement), (B) splitacquire by merging or consolidating with, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary purchasing an equity interest in or portion of the Company which remains a wholly owned Subsidiary after consummation assets of such transaction(other than as set forth in Section 4.1(a)(iii)), or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof, (C) declaretake or omit to take any action that would cause any rights under Material Intellectual Property, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement including with respect to the voting of its capital stockany registrations or applications for registration, to lapse, be abandoned or canceled, or (E) purchasefall into the public domain, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, actions or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan omissions in the ordinary course of business consistent with past practice that does and not materially increase the cost otherwise in violation of such Company Plan this Section 4.1, or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance enter into a joint venture or termination payments partnership or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equitysimilar third-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesparty business enterprise;
(iviii) incur acquire assets or capital stock from any Indebtedness or issue any warrants or other rights to acquire any IndebtednessPerson, except other than (A) in the ordinary course of business consistent with past practice or (B) acquisitions of assets at or below fair market value with a purchase price not in excess of $500,000 individually or $7,500,000 in the aggregate, in each case for any transaction or series of related transactions;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than (A) the issuance of Shares upon the exercise of Company Options or SARs and the settlement of Restricted Stock Awards, RSUs and PSPUs (and dividend equivalents thereon, if applicable) outstanding on the date of this Agreement or (B) the issuance of shares of capital stock by a principal amount Subsidiary of the Company to the Company or another Subsidiary of the Company or (C) the issuance, sale, pledge, disposition of, grant, transfer, encumbrance, or authorization of the issuance, sale, pledge, disposition, grant, transfer or encumbrance of capital stock of any Subsidiary of the Company in connection with financing arrangements not restricted under this Agreement) or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to exceed acquire any shares of such capital stock or such convertible, exchangeable or exercisable securities;
(v) other than ordinary course trade credit made in the ordinary course of business, make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect Subsidiary of the Company) in excess of $400,000,000 1,000,000 in the aggregate at any time outstanding on prevailing market terms time;
(vi) (A) declare, set aside or on terms substantially consistent pay any dividend or other distribution, whether payable in cash, stock or other property, with respect to its capital stock, except for dividends by any wholly owned direct or more beneficial indirect Subsidiary of the Company to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date or any other wholly owned direct or indirect Subsidiary of the Contract evidencing such IndebtednessCompany; provided, that the Company may, at its election, pay the $0.15 per Share cash dividend declared by the Company on June 17, 2015, (B) except with split, combine or reclassify the Shares or any other outstanding capital stock of the Company or issue or authorize the issuance of any other securities in respect to the Bridge Facilityof, in replacement of, lieu of or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednesssubstitution therefor, (C) intercompany Indebtedness among redeem, purchase or otherwise acquire, directly or indirectly, any capital stock or other Rights of the Company, except for acquisitions, or deemed acquisitions, of Shares or other equity securities of the Company in connection with (1) the satisfaction of Tax withholding obligations with respect to Company Options, SARs, Restricted Stock Awards, RSUs, or PSPUs outstanding on the date of this Agreement, (2) the payment of the exercise price of Company Options or SARs outstanding on the date of this Agreement with Shares (including in connection with “net exercises”) and (3) forfeitures of Company Options, SARs, Restricted Stock Awards, RSUs or PSPUs outstanding on the date of this Agreement, in the case of each of (1), (2) and (3), pursuant to their terms as in effect on the date of this Agreement, and except for acquisitions or deemed acquisitions of Shares or other equity securities of the Company or any of its wholly owned Subsidiaries by the Company or any of its wholly owned Subsidiaries, or (D) enter into any agreement, understanding or arrangement with respect to the sale, voting, registration or repurchase of the Company’s capital stock or other Rights of the Company or any of its Subsidiaries; provided that nothing contained herein shall prohibit dividends and distributions paid or made on a pro rata basis by direct or indirect Subsidiaries of the Company in the ordinary course consistent with past practice;
(1vii) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify the terms of any Indebtedness, including any Indebtedness under the existing revolving credit facilities of the Company, in excess, in the aggregate, of $3,000,000 of letters of credit and $1,000,000 of all other Indebtedness. “Indebtedness” of any Person means (A) all indebtedness for borrowed money, (B) any other indebtedness which is evidenced by a note, bond, indenture, debenture or similar Contract, (C) all capitalized lease obligations of such Person or obligations of such Person to pay the deferred and unpaid purchase price of property and equipment, other than trade payables incurred in the ordinary course of business, (D) all obligations of such Person pursuant to securitization or factoring programs or arrangements, (E) all guarantees and arrangements having the economic effect of a guarantee of such Person of any other Indebtedness of any other Person, (F) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or financial covenants of others, for the purpose of assuring the holder of any obligation which would constitute Indebtedness under any other clause of this definition of such others, or to purchase any other Person’s Indebtedness of the type referred to in any other clause of this definition or any security therefor (excluding any such obligation or undertaking by the Company or any Subsidiary thereof in respect of Indebtedness of the Company or any Subsidiary thereof, to the extent not drawn (i) such Indebtedness is in existence on the date hereof or is permitted hereby and (ii) the terms of such Indebtedness require such obligation or undertaking), (G) net cash payment obligations of such Person under swaps, options, derivatives and other hedging agreements or arrangements that will be payable upon termination thereof (assuming they were terminated on the date of determination), and payments are not triggered thereby, (H) reimbursement obligations under (i) letters of credit, bank guaranteesguarantees and other similar contractual obligations entered into by or on behalf of such Person or (ii) surety, security customs, reclamation or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programsother than, in each the case issued, made or of this clause (ii) those entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin.
Appears in 2 contracts
Sources: Merger Agreement (XPO Logistics, Inc.), Merger Agreement (Con-Way Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after From the execution date of this Agreement and prior until the Closing or the earlier termination of this Agreement, except that Seller may incur up to an additional $3,000,000 of debt from Perceptive Credit Opportunities Fund, L.P. and as (w) required by Law, (x) otherwise expressly contemplated by this Agreement, (y) set forth in Section 6.1 of the First Effective Time Seller Disclosure Letter or (unless Parent shall otherwise approve z) consented to in writing, writing by Buyer (which approval shall consent will not be unreasonably withheld, conditioned conditional or delayed), Seller will, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall will cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practicepractice and in material compliance with all material applicable Laws and Permits, and the Company shallwill, and shall will cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use its commercially reasonable efforts to preserve intact its present Business organization, maintain in effect all of its Permits, keep available the Retained Business’ organization intact services of its directors, officers and employees and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensorslenders, creditorspartners, lessors, employees and business associates suppliers and others having material business dealings associations with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and it or its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality ofof the foregoing and subject to the exceptions set forth in the foregoing clauses (w), (x), (y) and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that(z), from and after the date of this Agreement and prior to until the First Effective Time (unless Parent shall otherwise approve in writingClosing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall Seller will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable governing instruments;
(ii) merge or consolidate Seller or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers otherwise enter into any Contracts imposing material changes or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongrestrictions on its assets, operations or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)businesses;
(iii) except as expressly required by create or incur any Company Plan as in effect Lien or other encumbrance on any of the date hereof: (A) establishAcquired Assets, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan Permitted Liens and operating Liens incurred in the ordinary course of business consistent with past practice that practice;
(iv) make any changes with respect to accounting policies or procedures used by it in the preparation of the Financial Statements or revalue or reclassify in any material respect any of the Acquired Assets or the Assumed Liabilities, except as required by changes in applicable GAAP;
(A) waive, release, settle or compromise any pending or threatened Action against Seller or any of its Subsidiaries relating to the Business other than settlements or compromises of any Action (1) in which the amount paid by or on behalf of Seller or any of its Subsidiaries in settlement or compromise does not materially increase exceed $500,000 individually or $1,000,000 in the cost aggregate and (2) that would entail the incurrence of (I) any obligation or liability of Seller or any of its Subsidiaries in excess of such Company Plan amount, including costs or benefits provided under such Company Plan based revenue reductions or (II) any obligation that would impose any material restrictions on the cost on business or operations of Seller or its Subsidiaries or (B) commence, join or appeal in any Action, other than in the date hereofordinary course of business;
(vi) other than in the ordinary course of business and consistent with past practices, (A) make or change any material Tax election, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company change Seller’s or any of its Subsidiaries’ method of accounting for Tax purposes, (C) increase file any material amended Tax Return, (D) settle, concede, compromise or abandon any material Tax claim or assessment, (E) surrender any right to a refund of material Taxes or (F) consent to any extension or waiver of the compensationlimitation period applicable to any claim or assessment with respect to material Taxes;
(vii) fail to maintain in full force and effect material Insurance Policies or comparable replacement policies covering Seller and its Subsidiaries and their respective properties, bonus assets and businesses in a form and amount consistent with past practice;
(viii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or pension, welfare allow to lapse or other benefits expire or otherwise dispose of any director, officer or employee of the Company or any of its SubsidiariesAcquired Assets, except in the ordinary course of business consistent with past practice and sales of obsolete assets;
(ix) except as required pursuant to any Employee Plan, consistent with respect past practice, or as otherwise required by applicable Law, (A) pay, grant or provide any severance or termination payments or benefits to any Continuing Employee; (1B) employees below increase the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare welfare, severance or other benefits prior of, pay any bonus, incentive or retention payments to, or make any new equity awards to such changeany Continuing Employee, except for increases in base salary in the ordinary course of business consistent with past practice for employees who are not officers; (C) establish, adopt, amend or terminate any Employee Plan or amend the terms of any outstanding equity-based awards; (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan Employee Plan; (including any equity-based awards), (FE) change in any material respect any actuarial or other assumptions used to calculate funding obligations with respect to any Company Employee Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP; or (GF) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the TransactionsContinuing Employee;
(x) other than capital expenditures made enter into any new line of business; or
(xi) agree, authorize or commit to do any of the foregoing actions or enter into any letter of intent (binding or non-binding) or similar Contract with respect to any of the foregoing actions.
(b) Nothing contained in accordance this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct the Business prior to the Closing, and nothing contained in this Agreement is intended to give Seller, directly or indirectly, the right to control or direct Buyer’s operations. Prior to the Closing, each of Buyer and Seller will exercise, consistent with Section 5.01(b)(v) the terms and other than purchases conditions of this Agreement, complete control and licenses of film supervision over its and television its Subsidiaries’ respective business and production programming (includinoperations.
Appears in 2 contracts
Sources: Asset Purchase Agreement, Asset Purchase Agreement (Alliqua BioMedical, Inc.)
Interim Operations. (a) The Company Each of the Partnership and Parent covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent or the Partnership, as applicable, shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) otherwise expressly contemplated by this Agreement, as provided in any Contract in effect as of the date of this Agreement, or as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation business of it and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in the ordinary course of business consistent with past practiceOrdinary Course and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) associates. Without limiting the generality of, of and in furtherance of, of the foregoing, from the Company covenants and agrees date of this Agreement until the Effective Time, except as to itself and its Subsidiaries thatotherwise expressly: (i) contemplated by this Agreement; (ii) contemplated by any Contract entered into prior to, from and concurrently with or after the date of this Agreement and prior by Parent with respect to the First Effective Time Other Parent Transactions (unless Parent shall as such Contract may be amended, supplemented or otherwise approve modified from time to time); (iii) required by applicable Law or the terms of any Contract in writingeffect on the date of this Agreement, (iv) as approved in writing (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) other Party; or (3v) otherwise expressly disclosed set forth in the corresponding subsection of Section 5.01(b) 8.1 of the Company Partnership Disclosure Letter), as it relates to the Company Partnership and its Subsidiaries, or on Section 8.1 of the Parent Disclosure Letter, as it relates to Parent and its Subsidiaries, each Party, on its own account, shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments make any material change to the governing documents nature of its business and operations;
(ii) make any Subsidiary change to its Organizational Documents as in effect on the date of this Agreement in any manner that would reasonably be expected to prohibit, prevent or materially impede, hinder or delay the ability of such Party to satisfy any of the Company that would not preventconditions to, delay or impair the Initial consummation of, the Merger or the other Transactions;
(iii) (A) merge or consolidate itself or any of its Subsidiaries with any other Person (expressly excluding, for the avoidance of doubt, any of the Other Parent Transactions), or (B) splitadopt a plan or agreement of complete or partial liquidation, combinedissolution, subdivide restructuring, recapitalization or reclassify its outstanding shares of capital stock (other reorganization, in each case, except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends such transactions solely between or distributions paid by a direct among, or indirect solely involving, such Party and one or more of its wholly owned Subsidiaries, or a Subsidiary of the Company to another direct such Party and one or indirect more wholly owned Subsidiary Subsidiaries of the Company or to the Company or such Subsidiary, (2) normal semiannual cash dividends on as would not reasonably be expected to result in a Partnership Material Adverse Effect or Parent Material Adverse Effect, as applicable, or (3) as would not reasonably be expected to prohibit, prevent or materially impede, hinder or delay the Common Stock as described in Section 5.01(b)(i) ability of such Party to satisfy any of the Company Disclosure Letter)conditions to, or the consummation of, the Merger or the other Transactions;
(Div) issue, sell, grant, transfer or authorize the issuance, sale or grant, or otherwise enter into any agreement Contract with respect to the voting of, any of its capital stockpartnership interests, or (E) purchaselimited liability company interests, repurchase, redeem or otherwise acquire any shares of its capital stock or any equity interests, as applicable (other than the issuance of partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, (A) by its wholly owned Subsidiary to it or another of its wholly owned Subsidiaries, (B) by the Partnership to the GP Delegate pursuant to the Partnership Agreement or (C) in respect of equity-based awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement), or securities convertible or exchangeable into or exercisable for any such partnership interests, limited liability company interests, shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable forequity interests, as applicable, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any kind to acquire any partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, or such convertible or exchangeable securities;
(v) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable, or securities convertible or exchangeable into or exercisable forfor any partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable;
(vi) waive, release, assign, settle or compromise any claim, action or proceeding, including any state or federal regulatory proceeding seeking damages or injunction or other equitable relief, which waiver, release, assignment, settlement or compromise would reasonably be expected to result in a Partnership Material Adverse Effect or Parent Material Adverse Effect, as applicable;
(vii) other than in the Ordinary Course, make, change or revoke any material Tax election, adopt or change any material Tax accounting method, file any material amended Tax Return, settle any material Tax claim, audit, assessment or dispute for an amount materially in excess of the amount reserved or accrued on such Party’s most recent consolidated balance sheet included in the Parent Reports or Partnership Reports, as applicable, or surrender any optionsright to claim a refund of a material amount of Taxes;
(viii) make any material changes with respect to accounting policies, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii)except as required by changes in GAAP;
(ix) with respect make or declare any dividends or distributions to the Retained Businessholders of Common Units or Parent Common Stock, in each case, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game productionthe Ordinary Course, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition)8.12; provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;or
(x) other than capital expenditures made agree, authorize or commit to do any of the foregoing.
(b) Notwithstanding anything to the contrary in accordance this Agreement, a Party’s obligations under Section 8.1(a) to take an action or not to take an action, or to cause its Subsidiaries to take an action or not to take an action, shall, with Section 5.01(b)(vrespect to any Persons (and their respective Subsidiaries) controlled by such Party, or in which such Party otherwise has a voting interest, but that are not wholly owned Subsidiaries of such Party or have public equity holders, only apply (i) to the extent permitted by the organizational documents and other than purchases governance arrangements of such entity and licenses its subsidiaries, (ii) to the extent a Party is authorized and empowered to bind such entity and its subsidiaries and (iii) to the extent permitted by the Party’s or its Subsidiaries’ duties (fiduciary or otherwise) to such entity and its subsidiaries or any of film and television and production programming (includinits equity holders.
Appears in 2 contracts
Sources: Merger Agreement (Enbridge Inc), Merger Agreement (Enbridge Energy Partners Lp)
Interim Operations. (a) The Company covenants and EchoStar agrees as to itself and its Subsidiaries that, during the period from and after the execution date of this Agreement and prior through the earlier of the Closing or the date of termination of this Agreement, except (1) to the First Effective Time (unless Parent extent DISH shall otherwise approve give its prior consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law), (2) as set forth in Section 4.1(a) of the EchoStar Disclosure Letter, (3) as required by applicable Legal Requirements (including any applicable Covid-19 Measures that are Legal Requirements) or (4) as expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)this Agreement, the Company EchoStar shall, and shall cause each of its the EchoStar Subsidiaries to, use conduct its reasonable best efforts to conduct the Retained Business business in the ordinary course of business in all material respects and in a manner consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable best efforts to maintain and preserve intact its business organization, keep available the Retained Business’ organization intact and services of key employees, maintain the Retained Business’ existing relations and goodwill satisfactory relationships with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees distributors and business associates other commercial counterparties and others having maintain its material business dealings with the Retained Business assets and properties in their current condition (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers normal wear and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) tear excepted). Without limiting the generality of, and in furtherance of, the foregoing, during the Company covenants and agrees as to itself and its Subsidiaries that, period from and after the date of this Agreement and prior through the earlier of the Closing or the date of termination of this Agreement, except (1) to the First Effective Time (unless Parent extent DISH shall otherwise approve give its prior consent in writing, which approval shall writing (such consent not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law), (2) as set forth in Section 4.1(a) of the EchoStar Disclosure Letter, (3) as required by applicable Legal Requirements or (4) as expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter)this Agreement, the Company EchoStar shall not (and shall not permit any of its Subsidiaries EchoStar Subsidiary to:):
(i) amend EchoStar’s Organizational Documents or the Organizational Documents of any EchoStar Subsidiary (except for immaterial amendments to the Organizational Documents of any EchoStar Subsidiary which would not reasonably be expected to materially delay or prevent the consummation of the Closing or would reasonably be expected to adversely impact DISH and the DISH Subsidiaries);
(ii) split, combine, subdivide, amend the terms of or reclassify any shares of EchoStar’s capital stock or the capital stock of any EchoStar Subsidiary (other than any wholly owned EchoStar Subsidiary) (or any securities convertible into any of the foregoing);
(iii) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) with respect to SpinCo and any shares of EchoStar’s capital stock or the SpinCo Subsidiaries capital stock of any EchoStar Subsidiary, except for dividends or other distributions paid by any wholly owned EchoStar Subsidiary to EchoStar or another wholly owned EchoStar Subsidiary;
(iv) (A) form any Subsidiary that would constitute an EchoStar Subsidiary, (B) make any capital contributions to, or investments in, any other Person (including any officer, director, Affiliate, agent or consultant of EchoStar or any EchoStar Subsidiary) other than to wholly owned EchoStar Subsidiaries that are not H▇▇▇▇▇ Satellite Systems Corporation or any “Restricted Subsidiary” under the Secured Indenture or the Unsecured Indenture or (C) acquire (by merger, consolidation, acquisition of stock or assets, formation of a joint venture or otherwise) (1) any other Person, (2) any equity interest in any other Person, (3) any business, or (4) any assets, except, in the case of clause (A)C), (A) amend its certificate of incorporation in one or bylaws (more transactions with respect to which the aggregate consideration for all such transactions does not exceed $5,000,000 and which would not reasonably be expected to materially delay or comparable governing documents) (other than amendments to prevent the governing documents of any Subsidiary consummation of the Company that would not preventClosing;
(v) issue, delay sell, grant or impair the Initial Merger otherwise permit to become outstanding any additional shares of, or the other Transactions)securities convertible or exchangeable for, (B) splitor options, combinewarrants or rights to acquire, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock or the capital stock of any EchoStar Subsidiary, other than: (except for (1A) any dividends or distributions paid by shares of capital stock of a direct or indirect wholly owned Subsidiary of the Company EchoStar issued to either EchoStar or another direct or indirect wholly owned Subsidiary of EchoStar; (B) shares of EchoStar Common Stock issuable upon exercise of EchoStar Options or the Company or vesting of EchoStar RSU Awards outstanding on the date of this Agreement; (C) pursuant to the Company or EchoStar ESPP in accordance with the terms of this Agreement; and (2D) normal semiannual cash dividends on the shares of EchoStar Class A Common Stock issuable upon conversion from other classes of EchoStar Common Stock in accordance with the EchoStar Articles.
(vi) except in a transaction solely between EchoStar and any wholly owned Subsidiary of EchoStar or solely among any wholly owned Subsidiaries of EchoStar, sell, assign, transfer, lease or license to any third party, or encumber (other than EchoStar Permitted Encumbrances), or otherwise dispose of, any EchoStar IP or any material assets of EchoStar, other than: (A) sales of inventory or of obsolete assets in the ordinary course of business; (B) pursuant to written Contracts or commitments existing as described in of the date of this Agreement and set forth on Section 5.01(b)(i4.1(a)(vi) of the Company EchoStar Disclosure Letter), ; (C) non-exclusive licenses of EchoStar IP granted in the ordinary course of business; or (D) enter into disposals of any agreement with respect immaterial EchoStar Registered IP resulting from a cancellation, abandonment or failure to renew any immaterial EchoStar Registered IP in the voting ordinary course of its capital stock, business;
(vii) directly or (E) purchase, indirectly repurchase, redeem or otherwise acquire any shares of its EchoStar’s capital stock stock, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable into or exercisable for any shares of its EchoStar’s capital stock stock, except: (other than (1A) shares of EchoStar Common Stock repurchased from employees or consultants or former employees or consultants of EchoStar pursuant to the forfeiture ofexercise of repurchase rights binding on EchoStar and existing prior to the date of this Agreement; or (B) shares of EchoStar Common Stock accepted as payment for the exercise price of EchoStar Options outstanding on the date of this Agreement pursuant to the applicable EchoStar Equity Plan or for withholding Taxes incurred in connection with the exercise, vesting or withholding settlement of Taxes with respect toEchoStar Options and EchoStar RSU Awards outstanding on the date of this Agreement, Company Restricted Stock Unitsas applicable, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable award;
(iiviii) merge (A) incur any indebtedness for borrowed money, guarantee any such indebtedness, issue or consolidate with sell any debt securities or rights to acquire any debt securities (directly, contingently or otherwise) or make any loans or advances to any other Personperson; (B) incur any Lien on any of its material property or assets, except for EchoStar Permitted Encumbrances; or restructure, reorganize (C) enter into any transactions that amend or completely or partially liquidate (other than transactions otherwise alter available capacity under Section 4.7 of either the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, Unsecured Indenture or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)Secured Indenture;
(iiiix) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, terminate or materially amend or terminate any material Company EchoStar Plan or amend any collective bargaining or other labor agreement, (B) increase, or accelerate the terms vesting or payment of, the compensation or benefits of any outstanding equity-based awards director, independent contractor or employee of EchoStar or any EchoStar Subsidiary, other than than, (1) in the event the Closing has not occurred by April 2, 2024, increases in base salary to any such action taken for purposes individuals who are not directors or officers of replacing, renewing EchoStar or extending a broadly applicable material Company Plan any EchoStar Subsidiary in the ordinary course of business consistent with past practice that does do not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except exceed 5% in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President aggregate and (2) employees at or above the level of Executive Vice President increases in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, connection with promotions permitted under clause (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (C) grant any rights to severance, retention, change in control or termination pay to any director, independent contractor or employee of EchoStar or any EchoStar Subsidiary, (D) hire or promote any employee to a position with EchoStar or any EchoStar Subsidiary with an annual rate of base salary in excess of $300,000 or a title of Senior Vice President or higher, or (E) commercial paper issued terminate the employment of any employee of EchoStar or any EchoStar Subsidiary with an annual rate of base salary in excess of $300,000 or a title of Senior Vice President or higher (other than for cause), except for: (1) amendments to EchoStar Plans determined by EchoStar in good faith to be required to comply with applicable Legal Requirements; and (2) increases required pursuant to any EchoStar Plan as in effect on the date of this Agreement;
(x) other than in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at (A) amend, supplement or otherwise modify or terminate any time outstandingMaterial Contracts or waive, release or assign any material rights under any Material Contracts (Fexcept for (1) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial terminations pursuant to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal expiration of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, Material Contract and (L2) purchase money indebtedness and lease financing extensions at the option of EchoStar or any EchoStar Subsidiary under the terms thereof exercised in the ordinary course of business consistent with past practice), or (B) enter into any Contract that, if in effect on the date of this Agreement, would constitute a Material Contract;
(vxi) change any of its methods of financial accounting or accounting practices in any material respect other than as required by changes in GAAP;
(xii) (A) make, change or revoke any material Tax election, (B) change or adopt any Tax accounting period or material method of Tax accounting, (C) amend any material EchoStar Return, (D) settle or compromise any liability for material Taxes or any Tax audit, claim, or other proceeding relating to any material Taxes, (E) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar state, local or non-U.S. Legal Requirement), (F) request any Tax ruling from any Governmental Entity, (G) surrender any right to claim a refund of material Taxes or (H) extend or waive (other than automatically granted extensions and waivers) of the statute of limitations with respect to a material amount of Taxes;
(xiii) make any capital expenditure that is not contemplated by the capital expenditure budget set forth in Section 4.1(a)(xiii) of the EchoStar Disclosure Letter (a “EchoStar Non-Budgeted Capital Expenditure”), except that EchoStar or any Subsidiary of EchoStar may make any EchoStar Non-Budgeted Capital Expenditure that, when added to all other EchoStar Non-Budgeted Capital Expenditures made by EchoStar and the EchoStar Subsidiaries since the date of this Agreement, would not exceed $5,000,000, individually, or $10,000,000, in the aggregate;
(xiv) convene any annual or special meeting (or any adjournment or postponement thereof) of EchoStar’s stockholders;
(xv) enter into any agreement, understanding or arrangement with respect to the Retained Businesssale or voting of its capital stock or other equity interests;
(xvi) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(xvii) commence, settle or compromise any litigation, claim, suit, action, proceeding or other Legal Proceeding, except for settlements or compromises that (A) involve solely monetary remedies and, in the case of settlements involving the payment of money by EchoStar or the EchoStar Subsidiaries, have a value not in excess of $5,000,000 in the aggregate, (B) do not impose any material restriction on EchoStar’s business or the business of the EchoStar Subsidiaries, (C) do not relate to any litigation, claim, suit, action, proceeding or other Legal Proceeding by EchoStar’s stockholders in connection with this Agreement or the Merger and (D) do not include an admission of liability or fault on the part of EchoStar or any EchoStar Subsidiary;
(xviii) materially reduce the amount of insurance coverage or fail to renew or maintain any material existing insurance policies;
(xix) amend, terminate or allow to lapse any EchoStar Permits in a manner that adversely impacts EchoStar’s ability to conduct its business in any material respect;
(xx) (A) fail to pay any issuance, renewal, maintenance and other payments that become due with respect to the EchoStar Registered IP or otherwise abandon, cancel, or permit to lapse any material EchoStar IP or agreements pursuant to which EchoStar or any EchoStar Subsidiary licenses or obtains the right to use any Intellectual Property, other than with respect to acquisitions any abandonment of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties any EchoStar Registered IP at the end of the applicable statutory term or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) otherwise in the ordinary course of business consistent with past practice and practice, or (B) disclose to any third party any Trade Secret included in the aggregate not EchoStar IP, other than pursuant to a non-disclosure agreement restricting the disclosure and use of such Trade Secret, or in excess connection with any regulatory filing or any publication of 120% any patent application;
(xxi) except in the ordinary course of business, enter into any Contract under which EchoStar or any EchoStar Subsidiary grants or agrees to grant any right, or agrees to pay any royalties or similar obligations, with respect to any Intellectual Property;
(xxii) enter into any material new line of business or line of business of any kind competitive with DISH and the DISH Subsidiaries;
(xxiii) take any action, or knowingly fail to take any action, which action or failure to act could be reasonably expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the amounts reflected Code; or
(xxiv) authorize, enter into any Contract or make any commitment to do any of the foregoing.
(b) DISH agrees that, during the period from the date of this Agreement through the earlier of the Closing or the date of termination of this Agreement, except (1) to the extent EchoStar shall otherwise give its prior consent in the Company’s capital expenditure budget for each of 2017writing (such consent not to be unreasonably withheld, 2018 and 2019 conditioned or delayed), (2) as set forth in Section 5.01(b)(v4.1(b) of the Company DISH Disclosure Letter;
, (vi3) with respect to the Retained Businessas required by applicable Legal Requirements (including any applicable Covid-19 Measures that are Legal Requirements) or (4) as expressly required by this Agreement, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonmentDISH shall, and cancellationsshall cause the DISH Subsidiaries to, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not conduct its business in the ordinary course in all material respects and in a manner consistent with past practice, and use reasonable best efforts to maintain and preserve intact its business organization, maintain satisfactory relationships with Governmental Entities, customers, suppliers, distributors and other commercial counterparties and maintain its material assets and properties in their current condition (normal wear and tear excepted). Without limiting the foregoing, during the period from the date of this Agreement through the earlier of the Closing or $75,000,000 individually the date of termination of this Agreement, except (1) to the extent EchoStar shall otherwise give its prior consent in any event writing (other than transactions among the Company and its wholly owned Retained Subsidiariessuch consent not to be unreasonably withheld, conditioned or delayed), (D2) licensesas set forth in Section 4.1(b) of the DISH Disclosure Letter, sales(3) as required by applicable Legal Requirements or (4) as expressly required by this Agreement, letting lapse, abandonment DISH shall not (and cancellations shall not permit any DISH Subsidiary to):
(i) amend DISH’s Organizational Documents in any manner which would reasonably be expected to materially delay or prevent the consummation of Intellectual Property that is used the Closing or held for use exclusively would be adverse in any material respect to the SpinCo Business and (E) Affiliation Agreementsholders of EchoStar Class A Common Stock relative to holders of DISH Class A Common Stock;
(viiii) with respect to split, combine, subdivide, amend the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon terms of or otherwise dispose reclassify any shares of any properties the DISH’s capital stock or assets (including the capital stock of any of its Retained Subsidiaries but not including DISH Subsidiary (other than any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for wholly owned DISH Subsidiary) (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible into or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viiiforegoing);
(ixiii) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock, property or otherwise) with respect to any shares of DISH’s capital stock or the Retained Businesscapital stock of any DISH Subsidiary, except for dividends or other than capital expenditures made in accordance with Section 5.01(b)(vdistributions paid by any wholly owned DISH Subsidiary to DISH or another wholly owned DISH Subsidiary;
(iv) and other than with respect to film and television production and programming directly or video game productionindirectly repurchase, which is subject to Section 5.01(b)(xredeem or otherwise acquire any shares of DISH Common Stock (excluding, for clarity, securities convertible into shares of DISH Common Stock), spend or commit to spend in excess of except: (A) $25,000,000 if shares of DISH Common Stock repurchased from employees or consultants or former employees or consultants of DISH pursuant to the transaction is not in the ordinary course exercise of repurchase rights binding on DISH and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case existing prior to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includint
Appears in 2 contracts
Sources: Agreement and Plan of Merger (EchoStar CORP), Agreement and Plan of Merger (DISH Network CORP)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after After the execution date of this Agreement and prior to the First earlier of the Effective Time and the termination of this Agreement in accordance with its terms, except (unless i) as Parent shall otherwise approve in writing, which approval shall consent (such consent not to be unreasonably withheld, delayed or conditioned and such consent to be deemed given if Parent provides no written response within 3 business days after a written request by the Company for such consent) or delayedrequest, and except (ii) as otherwise expressly contemplated by this Agreement, (1iii) as required by applicable LawLaws, (2iv) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a) 5.1 of the Company Disclosure LetterLetter or (v) as necessary to comply with the express obligations of any Company Material Contract in effect on the date hereof (the exceptions described in the foregoing clauses (i) through (v), each, a “General Exception”), the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to conduct the Retained Business its and its Subsidiaries’ business in the ordinary course of business consistent with past practice, and and, to the Company extent consistent therewith, it shall, and it shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use its and their respective commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entitiestheir business organizations; provided, customersthat, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of no action by the Company and or any of its Subsidiaries’ present employees and agentsSubsidiaries with respect to matters specifically addressed by any provision of Section 5.1(b) shall be deemed a breach of Section 5.1 unless such action or omission would constitute a breach of such provision of Section 5.1(b).
(b) Without limiting the generality of, of and in furtherance of, of the foregoing, foregoing but subject to the Company covenants and agrees as to itself and its Subsidiaries thatproviso in Section 5.1(a), from and after the date of this Agreement and prior to until the First earlier of the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed termination of this Agreement in Section 5.01(b) of the Company Disclosure Letter)accordance with its terms, except pursuant to a General Exception, the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt any change in the case of clause (A)), (A) amend its Company’s or any Subsidiary’s certificate of incorporation or bylaws (or comparable governing documents;
(ii) (merge or consolidate itself or any of its Subsidiaries with any other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock Person (except for any such transaction by a among its wholly owned subsidiary subsidiaries), restructure, reorganize or completely or partially liquidate;
(iii) other than (A) in connection with the exercise, vesting or settlement of Company Equity Awards outstanding as of the date hereof and in accordance with the terms thereof (including sales of Shares in order to satisfy tax withholding obligations) or (B) as disclosed in Section 5.1(b)(iii) of the Company which remains a wholly Disclosure Letter, issue, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance by it or any of its Subsidiaries of, any shares of its capital stock or of any its Subsidiaries (other than the issuance of shares by its wholly-owned Subsidiary after consummation to it or another of its wholly-owned Subsidiaries), or securities convertible or exchangeable into or exercisable for any shares of such transaction)capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(Civ) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly wholly-owned Subsidiary of the Company to another it or to any other direct or indirect wholly wholly-owned Subsidiary of the Company Subsidiary) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(v) other than (A) acquisitions of Shares tendered by holders of Company Equity Awards outstanding as of the date hereof and in accordance with the terms thereof, in order to satisfy obligations to pay the exercise price and/or tax withholding obligation with respect thereto, and (B) the acquisition by the Company of Shares in connection with the forfeiture of Company Equity Awards, reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its the Company’s capital stock or any securities convertible or exchangeable into or exercisable for any shares of the Company’s capital stock;
(vi) (A) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or of any of its capital stock Subsidiaries, except for (other than x) (1) pursuant to indebtedness incurred in the forfeiture of, or withholding ordinary course of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice business under its credit agreements and with the terms of the Company Stock Plans facilities as in effect on the date of this Agreement (or as modified after Agreement, including under the date of this Agreement in accordance with the terms of this Agreement) Sub Debt Facility or (2) purchasesas necessary to operate the business in the ordinary course of business consistent with past practices, repurchasesor (y) interest rate swaps on customary commercial terms, redemptions (B) except for credit default protection provided in connection with services and products in the ordinary course of business consistent with past practice, enter into any “keep well” or other acquisitions of securities Contract to maintain any financial statement condition of any wholly owned Subsidiary other Person (other than any of its Subsidiaries) or (C) enter into any arrangement having the economic effect of any of the Company by the Company foregoing clause (A) or any other wholly owned Subsidiary of the Company(B);
(iivii) merge except as may be required by GAAP or consolidate with any other Personapplicable accounting standard (including the Current Expected Credit Loss accounting standard), make any material changes with respect to accounting policies or procedures;
(viii) other than in the ordinary course of business, (A) settle or compromise any material Tax claim, audit, or restructure, reorganize or completely or partially liquidate (other than transactions assessment for an amount materially in excess of the type contemplated by Section 5.01(b)(viiamount reserved or accrued on the Audited Company Balance Sheet (or most recent consolidated balance sheet included in the Company Reports), (B) make, change or revoke any material Tax election, material method of Tax accounting or any annual Tax accounting period, (C) amend any material Tax Returns or file claims for material Tax refunds, or (D) enter into any material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(ix) transfer, sell, lease, exclusively license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse (except with respect to patents expiring in accordance with their terms) or Section 5.01(b)(ixexpire or otherwise dispose of any of its material assets, product lines or businesses or of its Subsidiaries, including capital stock of any of its Subsidiaries, except (A) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement services and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan products provided in the ordinary course of business consistent with past practice that does not materially increase the cost and sales of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofobsolete assets, (B) grant incurrence of Permitted Liens, (C) for assets with a fair market value not in excess of $350,000 in the aggregate, in the ordinary course of business consistent with past practice, or provide (D) pursuant to Contracts in effect prior to the date of this Agreement;
(x) other than (A) as set forth on Section 5.1(b)(x) of the Company Disclosure Letter, or (B) as required by any transaction Company Benefit Plan in effect on the date of this Agreement, (1) materially increase any compensation or retention bonuses benefit provided or to be provided to any director, officer, current or former employee or other service provider of the Company or any of its Subsidiaries, (C2) increase the compensation, bonus enter into or pension, adopt any new Company Benefit Plan or amend in any material respect or terminate any Company Benefit Plan except for routine amendments or renewals of health and welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except plans in the ordinary course of business consistent with past practice practice, or (3) accelerate the funding or vesting of any material compensation or benefit;
(xi) except in connection with respect services and products provided in the ordinary course of business consistent with past practices or pursuant to (1) employees below Contracts, copies of which shall be publicly filed with the level of Executive Vice President and (2) employees at SEC or above the level of Executive Vice President shall have been provided to Parent, in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits effect prior to such changethe date of this Agreement, (DA) increase the severance acquire, by merger, consolidation, acquisition of stock or termination payments assets, or benefits payable to otherwise, any director, officer, employee business or other service provider of the Company Person or any division thereof or (B) except in favor of its Subsidiaries, (E) take make any action to accelerate the vesting loans, advances, or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which capital contributions to such plans are made or investments in any Person (other than advances of expenses to employees in the basis on which such contributions are determined or (G) forgive any ordinary course of business and loans and other credit products to directors, officers or employees of and for the Company or any of its SubsidiariesCompany’s commercial counterparties);
(ivxii) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except than (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except as permitted under Section 5.1(b)(iii), 5.1(b)(v) or 5.1(b)(x), enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract or any Lease with respect to the Bridge Facilitymaterial real property or any other Contract or Lease that, if in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken effect as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after of the date hereof would constitute a Company Material Contract or Lease with respect to material real property hereunder;
(xiii) settle or compromise any Action involving the payment of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of monetary damages by the Company or any of its Subsidiaries with respect to such Indebtedness of any amount exceeding $350,000 in the aggregate (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have including any obligations in respect thereofamounts payable or reimbursable by insurance), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with any Action brought against or by Parent, Merger Sub, Sponsor or any of their respective Affiliates and Financing Sources arising out of a breach or alleged breach of this Agreement, the repair Confidentiality Agreement, the Equity Commitment Letter or replacement of facilitiesthe Limited Guarantee, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or and (B) the settlement of claims, liabilities, or obligations specifically reserved against on the Audited Company Balance Sheet (or most recent consolidated balance sheet included in the ordinary course of business consistent with past practice and Company Reports) in the aggregate an amount not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) specific reserve with respect to the Retained Businesssuch claim, transferliability or obligation; provided, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall settle or agree to settle any Action which settlement involves a conduct remedy or injunctive or similar relief that has a material restrictive impact on the Company’s business;
(xiv) enter into any such transaction that wouldmaterial agreement, agreement in principle, letter of intent, memorandum of understanding, or would reasonably be expected tosimilar Contract, preventin each case with respect to any joint venture, materially delay strategic partnership, or materially impair the consummation alliance (excluding, for avoidance of the Transactionsdoubt, strategic relationships not involving equity, alliances, reseller agreements, and relationships that are commercial in nature);
(xxv) other than capital expenditures made terminate or modify in accordance any material respect, or fail to exercise renewal rights with Section 5.01(b)(vrespect to, any material insurance policy except in the ordinary course of business or if such material insurance policy is replaced by a substantially comparable policy; or
(xvi) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the operations of the Company or its Subsidiaries prior to the Effective Time in violation of applicable Law. Prior to the Effective Time, the Company shall exercise, consistent with the terms and other than purchases conditions of this Agreement, complete control and licenses of film supervision over its and television and production programming (includinits Subsidiaries’ operations.
Appears in 2 contracts
Sources: Merger Agreement (Elevate Credit, Inc.), Merger Agreement (Elevate Credit, Inc.)
Interim Operations. Except as may be (ai) The Company covenants and agrees as expressly provided for in this Agreement, (ii) expressly provided for in the Merger Agreement (including the Schedules), (iii) required by applicable Law or (iv) consented to itself and its Subsidiaries that, from and after the execution of this Agreement and prior to the First Effective Time in writing by Buyer in advance (unless Parent shall otherwise approve in writing, which approval shall consent will not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and Sellers shall cause each of its the Companies and the Company Subsidiaries to, use its reasonable best efforts and Westway Canada shall (with respect to conduct the Retained Business Canadian Feed Business), carry on their respective business in the ordinary course of business consistent with past practice, and, to the extent consistent therewith, the Sellers shall cause the Companies and the Company shall, Subsidiaries to and Westway Canada shall cause each of its Subsidiaries to, solely (with respect to the extent related to the Retained Canadian Feed Business, subject to compliance with the specific matters set forth below, ) use commercially reasonable best efforts to preserve substantially intact their respective business organization, to keep available the Retained Business’ organization intact services of their respective current officers and maintain the Retained Business’ existing relations and goodwill employees, to preserve their respective present relationships with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees licensees and other Persons having business associates relationships with them. The Parties agree that each of ▇▇▇▇ ▇▇▇▇▇▇▇ and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services ▇▇▇ ▇▇▇▇▇▇▇ shall be authorized to provide consent on behalf of the Company and its Subsidiaries’ present employees and agents.
(b) Buyer for purposes of this Section 5.1. Without limiting the generality of, and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after between the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writingClosing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) otherwise expressly provided for in this Agreement or as set forth in Schedule 5.1 or as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and Sellers shall not permit any of its the Companies or the Company Subsidiaries to:, and Westway Canada shall not (with respect to the Canadian Feed Business), without the prior written consent of Buyer (which consent will not be unreasonably withheld conditioned or delayed):
(a) amend or propose to amend their respective governing documents;
(b) (i) split, subdivide, combine or reclassify any securities of any of the Companies, the Company Subsidiaries or Westway Canada (ii) except with respect as pursuant to SpinCo and this Agreement, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any securities of any of the SpinCo Companies, the Company Subsidiaries or Westway Canada or (other than in the case of clause (A)), iii) except (A) amend its certificate of incorporation for transfers which would cause either a net cash inflow or bylaws (or comparable governing documents) (other than amendments to outflow between the governing documents of any Subsidiary of Feed Intercompany Cash Sweep Account and the Company that would not prevent, delay or impair the Initial Merger or the other Transactions)Parent Swingline Account, (B) splitfor the UK Reorganization, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), and (C) in connection with the direct or indirect repatriation (in any form or method approved by the relevant entity) of cash or cash equivalents to Netherlands Holdings or its direct or indirect owners, or (D) as otherwise consistent with past practice, declare, set aside or pay any dividend or distribution payable (whether in cash, stock stock, property or property (or any combination thereofotherwise) in respect of any shares of its capital stock (except for (1) any dividends of, or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement Contract with respect to the voting of its capital stockor registration of, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock the Companies’, the Company Subsidiaries’ or any securities convertible or exchangeable into or exercisable for any shares of its Westway Canada’s capital stock (other than (1) pursuant to the forfeiture of, dividends from its direct or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly indirect wholly-owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the CompanySubsidiary);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin
Appears in 2 contracts
Sources: Purchase Agreement, Purchase Agreement (Westway Group, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after Without limiting the execution Company's obligations under Section 6.5 of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writingAgreement, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by set forth in the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) corresponding section of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoingLetter or otherwise as expressly contemplated hereby, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time (unless Parent Cingular shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned withheld or delayed), the business of it and which determination its Subsidiaries shall take into account be conducted in the ordinary course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of the present employees and agents of the Company Overview Presentationand its Subsidiaries. Without limiting the Company's obligations under Section 6.5 of this Agreement and without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the Effective Time, the Company will not and will not permit its Subsidiaries to (unless Cingular shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed):
(i) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except as for any such transactions among wholly-owned Subsidiaries of the Company that are not obligors or guarantors of third party indebtedness;
(1iii) required by applicable Lawacquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $50,000,000, (2) expressly required by other than acquisitions pursuant to Contracts to the Transaction Documents (including extent in connection with effect immediately prior to the Separation execution of this Agreement and the Distribution) or (3) otherwise expressly disclosed set forth in Section 5.01(b6.1(a)(iii) of the Company Disclosure Letter or as otherwise set forth in Section 6.1(a)(iii) of the Company Disclosure Letter;
(iv) other than pursuant to Contracts to the extent in effect as of immediately prior to the execution of this Agreement and set forth in Section 6.1(a)(iv) of the Company Disclosure Letter, and other than the issuance of shares of Common Stock upon the exercise of outstanding Company Options and pursuant to other equity-based awards granted under the Stock Plans and shares under the Company's 401(k) plan and the deferred compensation plans, in each case, in accordance with their terms, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) other than in connection with existing receivables facilities and securitizations and renewals thereof in the ordinary course of business, create or incur any Lien on assets of the Company shall not and shall not permit or any of its Subsidiaries to:that is material, individually or in the aggregate, to the Company and its Subsidiaries taken as a whole;
(ivi) except with respect other than acquisitions pursuant to SpinCo Contracts to the extent in effect as of immediately prior to the execution of this Agreement and set forth in Section 6.1(a)(vi) of the SpinCo Subsidiaries Company Disclosure Letter, make any loan, advance or capital contribution to or investment in any Person (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any a wholly-owned Subsidiary of the Company that would not prevent, delay or impair Company) in excess of $25,000,000 in the Initial Merger or the other Transactions), aggregate;
(B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or other distributions paid by a any direct or indirect wholly wholly-owned Subsidiary of the Company to another the Company or to any other direct or indirect wholly wholly-owned Subsidiary of the Company and periodic dividends and other periodic distributions by non-wholly-owned Subsidiaries consistent with past practices) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(viii) other than the redemption of the Series C Preferred Stock or the Series E Preferred Stock in accordance with the Company's certificate of incorporation, reclassify, combine, split, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares share of its capital stock stock;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) indebtedness for borrowed money incurred in the ordinary course of business not to exceed $50,000,000 in the aggregate, (B) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money on customary commercial terms, (C) guarantees incurred in compliance with this Section 6.1(a) by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (D) interest rate swaps on customary commercial terms, consistent with past practices and not to exceed $750,000,000 of notional debt in the aggregate;
(x) except as set forth in Section 6.1(a)(x) of the Company Disclosure Letter, make or authorize any capital expenditure;
(xi) enter into any Material Contract that would have been a Material Contact as described in clauses (J), (L) or (M) of Section 5.1(j)(i) had it been entered into prior to the execution of this Agreement, and other than in the ordinary course of business, enter into any other Material Contract that would have been a Material Contract as described in Section 5.1(j)(i) (other than as described in clauses (1J), (L) pursuant or (M)) had it been entered into prior to the forfeiture of, or withholding execution of Taxes this Agreement;
(xii) make any changes with respect toto accounting policies or procedures, Company Restricted Stock Unitsexcept as required by changes in GAAP or by Law or except as the Company, Company Deferred Stock Units based on the advice of its independent auditors and after consultation with Cingular, determines in good faith is advisable to conform to best accounting practices;
(xiii) settle any litigation or Company Performance Stock Units, other proceedings before or threatened to be brought before a Governmental Entity for an amount in each case in accordance with past practice and with excess of $10,000,000 or which would be reasonably likely to have any adverse impact on the terms operations of the Company Stock Plans as or any of its Subsidiaries or on any current or future litigation or other proceeding of the Company or any of its Subsidiaries; provided, that any litigation or other proceeding with respect to an item relating to Taxes may be settled for an amount that is not in effect excess of the amount reserved or accrued for such item on the most recent balance sheet contained in the Company Reports filed prior to the date of this Agreement (which reserve and accrual information shall be furnished by the Company to Cingular upon Cingular's request);
(xiv) other than in the ordinary course of business, amend or modify in any material respect, or terminate or waive any material right or benefit under any Material Contract;
(xv) except as modified required by Law, make any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement or adopt any material method therefor that is inconsistent with elections made, positions taken or methods used in accordance preparing or filing similar Tax Returns in prior periods. Notwithstanding the foregoing, the Company shall consult with Cingular and its Representatives prior to claiming any depreciation allowance under Section 168(k) of the terms of this AgreementCode;
(xvi) sell, lease, license, or (2) purchases, repurchases, redemptions or other acquisitions of securities otherwise dispose of any wholly owned Subsidiary assets of the Company by the Company or any other wholly owned Subsidiary its Subsidiaries except for ordinary course sales of mobile telephone equipment to customers of the Company, services provided in the ordinary course of business or obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $25,000,000 in the aggregate, other than pursuant to Contracts in effect prior to the execution of this Agreement and set forth in Section 6.1(a)(iii) of the Company Disclosure Letter or as otherwise set forth in Section 6.1(a)(iii) of the Company Disclosure Letter and other than any dispositions of assets to the extent used as consideration for acquisitions that are permitted pursuant to Section 6.1(a)(iii);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iiixvii) except as expressly required pursuant to existing written, binding agreements in effect prior to the execution of this Agreement, as otherwise required by any Company Plan as in effect on the date hereof: (A) establishLaw, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (Bwhich with respect to annual bonus plans and performance share awards is set forth in Section 6.1(a)(xvii) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its SubsidiariesDisclosure Letter), (Ci) increase the compensation, bonus enter into any commitment to provide any severance or pension, welfare termination benefits to (or other benefits of amend any existing arrangement with) any director, officer or employee of the Company or any of its Subsidiaries, except in (ii) increase the ordinary course benefits payable under any existing severance or termination benefit policy or employment agreement (other than as required to be increased pursuant to the existing terms of business consistent any such policy or agreement), (iii) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement) with past practice with respect to any director or officer of the Company or any of its Subsidiaries other than for new hires, (1iv) employees below establish, adopt, amend, terminate or make any new awards under any bonus, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any director, officer or employee of the level Company or any of Executive Vice President and its Subsidiaries (2v) employees at or above increase the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee employee, consultant or other service provider independent contractor of the Company or any of its Subsidiaries, or (Evi) amend the terms of any outstanding Company Option or other equity-based award; provided, that the Company shall in no event take any action to accelerate the vesting or payment of compensation or benefits under amend its severance plans, except as required by applicable Law;
(xviii) fail to initiate appropriate steps to renew any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of material FCC Licenses held by the Company or any of its SubsidiariesSubsidiaries that are scheduled to terminate prior to or within 60 days after the Effective Time;
(ivxix) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) engage in the ordinary course conduct of any business requiring the receipt or transfer of a License issued by a Governmental Entity other than engaging in the mobile wireless voice and data business in the U.S. and activities incident thereto, other than any other current lines of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations geographic locations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to as expressly permitted by Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v6.1(a)(iii) of the Company Disclosure Letter;
(vixx) except as otherwise permitted hereby with respect to the Retained Businessemployees, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of enter into any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses Contract with or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually engage in any event (material transaction with DoCoMo or any other than transactions among Affiliate of the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation AgreementsCompany;
(viixxi) with respect to the Retained Businessadopt a technology platform other than existing technologies, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Propertyanalog, which is governed by Section 5.01(b)(vi)TDMA, EDGE, GSM and GPRS), except for HSDPA or UMTS and W-CDMA (Aincluding in each case the standards set forth on Section 6.1(a)(xxi) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viiiDisclosure Letter);
(ixxxii) with respect to amend, modify or waive any provision under the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(vRights Agreement; and
(xxiii) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend agree or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date foregoing.
(b) Each of SBC and BellSouth will cause Cingular and Cingular Wireless to take all action necessary to consummate the agreement for such acquisition); provided that neither transactions contemplated by this Agreement subject to the Company terms and conditions hereof. Neither SBC nor BellSouth will take or permit any of its Retained Subsidiaries shall enter into to take any action that at the time of taking such transaction that would, or would action is reasonably be expected to, prevent, materially delay or materially impair likely to prevent the consummation of the Transactions;
Merger. Except as set forth in the corresponding section of the disclosure letter delivered by SBC to the Company at the time of entering into this Agreement (xthe "SBC Disclosure Letter"), neither SBC nor BellSouth shall, and each shall cause its Subsidiaries not to, prior to the Termination Date, (i) enter into any definitive agreement for the acquisition of any business or Person which provides commercial mobile wireless voice and data services offered to the public utilizing frequencies and spectrum licensed by the FCC, other than capital expenditures made the provision of such services in accordance de minimis amounts or (ii) take any action which would, at the time the action is taken, reasonably be expected to materially interfere with Section 5.01(b)(v) its ability to make available to Cingular or the Paying Agent as of the Effective Time funds sufficient for its Specified Interest of the Merger Consideration. Each of SBC and other than purchases BellSouth will, subject to the terms and licenses conditions of film and television and production programming (includinthis Agreement, make available to Cingular or the Paying Agent its Specified Interest of the Merger Consideration.
Appears in 2 contracts
Sources: Merger Agreement (At&t Wireless Services Inc), Merger Agreement (SBC Communications Inc)
Interim Operations. (a) The Company covenants and agrees Except (i) as to itself and its Subsidiaries thatexpressly contemplated, from and after the execution of required or permitted by this Agreement and prior to the First Effective Time Agreement, (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except ii) as (1) required by applicable Law, (2iii) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or conditioned), (iv) as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in set forth on Section 5.01(a) 6.1 of the Company Disclosure LetterSchedule, or (v) for any necessary or advisable actions taken in good faith to respond to the actual or reasonably anticipated effects of COVID-19 or to comply with COVID-19 Measures (provided, that, with respect to actions taken or omitted to be taken in reliance on this clause (v), to the extent permitted under applicable Law and practicable under the circumstances, the Company shallshall provide prior notice to and consult in good faith with Parent prior to taking such action), from the date of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company will, and shall will cause each of its Subsidiaries to, use its and their commercially reasonable best efforts to (A) conduct their businesses in the Retained Business ordinary course of business and (B) preserve intact their business organizations and relationships with customers, suppliers, distributors and other Persons with which it has material business dealings; provided that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such provision of Section 6.1(b).
(b) Except (u) as expressly contemplated, required or permitted by this Agreement, (v) as required by applicable Law, (w) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned), (x) as set forth on Section 6.1 of the Company Disclosure Schedule, or (y) for any necessary or advisable actions taken in good faith to respond to the actual or reasonably anticipated effects of COVID-19 or to comply with COVID-19 Measures (provided, that, with respect to actions taken or omitted to be taken in reliance on this clause (y), to the extent permitted under applicable Law and practicable under the circumstances, the Company shall provide prior notice to and consult in good faith with Parent prior to taking such action), from the date of this Agreement until earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company will not, and will cause its Subsidiaries not to:
(i) (x) adopt any change in the certificate of incorporation or bylaws of the Company or (y) adopt any change in the comparable organizational document of any of the Company’s Subsidiaries;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize, recapitalize or completely or partially liquidate or dissolve or otherwise enter into any agreement or arrangement imposing restrictions on the assets, operations or business of the Company or any of its Subsidiaries;
(iii) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) any such transaction among the Company and its Subsidiaries or among the Company’s wholly owned Subsidiaries, (B) any issuance of Shares pursuant to exercise or settlement of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms, or (C) incurrence of any Permitted Liens;
(iv) make any loans, advances or capital contributions to or investments in any Person (other than (A) to the Company or any of its wholly owned Subsidiaries and (B) operating leases and extensions of credit terms to customers in each case in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.);
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Cv) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise with respect to any combination thereof) in respect of any shares of its capital stock (stock, except for (1) any dividends or other distributions paid by a direct or indirect any wholly owned Subsidiary of the Company to another direct the Company or indirect to any other wholly owned Subsidiary of the Company Company;
(vi) reclassify, split, combine, subdivide or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than except for (1A) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company such transaction by the Company or any other a wholly owned Subsidiary of the Company, (B) acquisitions of Shares in satisfaction of withholding obligations in respect of Company Equity Awards to the extent required by such Company Equity Awards, or (C) payment of the exercise price in respect of Company Options, in the case of clauses (B) and (C), outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement);
(iivii) merge create, incur, assume or consolidate with guarantee any Indebtedness for borrowed money or issue any debt securities or guarantees of the same or any other PersonIndebtedness, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: for (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan borrowings in the ordinary course of business consistent with past practice under the Company’s existing revolving credit facilities (including under both the Cash Flow Credit Agreement and ABL Credit Agreement); provided that any such incurrence does not materially increase and is not reasonably expected to cause the cost of such Company Plan Payment Condition (as defined in the ABL Credit Agreement) to fail to be satisfied on, or benefits provided under such Company Plan based on as of, the cost on the date hereofClosing Date, (B) grant guarantees or provide credit support provided by the Company or any transaction or retention bonuses to any director, officer, employee or other service provider of its Subsidiaries of the obligations of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except Subsidiaries in the ordinary course of business consistent to the extent such Indebtedness is in existence on the date of this Agreement or incurred in compliance with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except clause (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtednessthis Section 6.1(b)(vii), and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany any Indebtedness solely among the Company and its wholly wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries;
(viii) other than in accordance with the Company’s capital expenditure budget made available to Parent, incur or commit to any capital expenditure or expenditures, except capital expenditures of less than $5 million individually or $10 million in the aggregate or capital expenditures as required on an emergency basis or for the safety of individuals or the environment;
(Dix) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into other than in the ordinary course of business consistent with past practice, (EA) commercial paper issued enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement; provided, that no Contract of the type described in Section 5.1(k)(i)(B)(x) or (C) shall be entered into without the ordinary course prior written consent of business consistent with past practice Parent, or (B) amend, modify or waive in any material respect or terminate any Material Contract in a principal manner adverse to the Company (other than expirations of any such Contract in accordance with its terms);
(x) make any material changes with respect to financial accounting policies or procedures, except as required by Law, proposed Law or by U.S. GAAP or official interpretations with respect thereto or by any Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(xi) settle any Action for an amount not to exceed in excess of $250,000,000 1 million individually or $5 million in the aggregate at other than (A) any time outstandingsettlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries is fully covered by insurance coverage or retention amounts maintained by the Company or any of its Subsidiaries and (B) settlements or compromises of any Action for an amount not materially in excess of the amount, if any, reflected or specifically reserved in the balance sheet (For the notes thereto) Indebtednessof the Company included in the Company Reports (with materiality measured relative to the amount so reflected or reserved, if any); provided that, in the case of each of the foregoing clauses (A) and (B), the proceeds settlement or compromise of which will be used to finance all such Action does not (x) impose any non-de minimis restriction on the business or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations operations of the Company or any of its Subsidiaries with respect to such Indebtedness (or Parent or any of its Subsidiaries after the Closing) and Parent and its Subsidiaries(y) include any non-de minimis non-monetary or injunctive relief, includingor the admission of wrongdoing, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of by the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms any of its Subsidiaries or on terms substantially consistent with any of their respective officers or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practicedirectors;
(vxii) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfersell, lease, license, sell, assign, let lapseencumber (other than Permitted Liens), abandon, cancelpermit to lapse, mortgage, pledge, place a Lien upon or otherwise dispose of any material assets or property (including any material Intellectual Property; provided that this clause (viProperty Rights) shall not restrict except (A) ordinary course non-exclusive licenses pursuant to existing contracts or ordinary course security interests in connection with the production commitments (or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Propertyrefinancings thereof), (B) as may be required by a Governmental Authority to permit or facilitate the granting consummation of the Merger or any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per licenseother transactions contemplated in this Agreement solely to the extent required pursuant to Section 6.5, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries or among the Company’s wholly owned Subsidiaries, or (D) in the ordinary course of business and in no event in an amount exceeding $1 million individually or $5 million in the aggregate;
(xiii) except for such actions required by the terms of Benefit Plans as in effect on the date hereof: (A) increase the compensation or other benefits payable or provided to the Company’s Employees or other service providers; (B) increase or accelerate or commit to accelerate the funding, payment or vesting of compensation or benefits provided under any Benefit Plan, (C) grant or announce any cash- or equity or equity-based incentive awards, bonus, change of control, severance or retention award to any Employee or other service provider of the Company or its subsidiaries; (D) establish, adopt, enter into terminate or amend any Labor Agreement or material Benefit Plan (or any plan, program, agreement or arrangement that would be a Benefit Plan if in effect on the date hereof); (E) recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative of any employees of the Company or its Subsidiaries or (F) hire or terminate the employment of any employee of the Company whose annualized base compensation exceed $300,000;
(xiv) acquire any business, assets or capital stock of any Person or division thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation or otherwise), other than the acquisition of assets from vendors or suppliers of the Company or any of its Subsidiaries in the ordinary course of business;
(xv) cancel, modify, amend or waive or terminate any of the Existing Credit Documents, except for modifications or amendments to any of the Existing Credit Documents that would not (A) impair the ability of Parent to obtain the Debt Financing or any high-yield bonds being issued in lieu of all or a portion of the Debt Financing on the Closing Date, (B) reduce the ability of the Company and its Subsidiaries to incur secured debt for borrowed money in the form of the Debt Financing or any high-yield bonds being issued in lieu of all or a portion of the Debt Financing on the Closing Date in any material respect, (C) reduce the ability of the Company and its Subsidiaries to make Restricted Payments (as defined in the applicable Existing Credit Document) on the Closing Date in any material respect, (D) licenses, sales, letting lapse, abandonment and cancellations impair the ability of Intellectual Property that is used the Merger to be consummated in compliance with any “merger” or held for use exclusively “fundamental changes” covenant in the SpinCo Business and Existing Credit Documents or (E) Affiliation Agreementsamend or modify the stated final maturity date of any indebtedness for borrowed money thereunder to be sooner than such maturity date as in effect as of the date hereof, amend or modify the interest rate or undrawn commitment fees payable by the Company or its Subsidiaries under any such agreement in a manner materially adverse to the Company and its Subsidiaries or amend or modify any such agreement to reduce the amount of the total lending commitments thereunder;
(viixvi) with respect to implement or announce any permanent plant closings or permanent facility shutdown that would implicate the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets WARN Act;
(including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (Axvii) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not than in the ordinary course of business or $100,000,000 individually in consistent with past practice (A) change or revoke any event or material Tax election; (B) transactions among change any annual Tax accounting period or material method of Tax accounting, (C) file any material amended Tax Return, (D) settle or compromise any material claim related to Taxes for an amount materially in excess of amounts reserved, (E) enter into any material closing agreement or (F) surrender any right to claim a material Tax refund, offset or other reduction in liability for an amount materially in excess of amounts reserved (it being agreed and understood that, notwithstanding any other provision, neither Section 6.1(b)(xi) nor Section 6.1(b)(xviii) (insofar as it relates to Section 6.1(b)(xi)) shall apply to Tax compliance matters); or
(xviii) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement is intended to give Parent or Merger Sub or any of their Affiliates, directly or indirectly, the right to control or direct the operations of the Company and its Subsidiaries prior to the Retained Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries;’ respective operations.
(viiid) except with respect Subject to SpinCo the terms of this Agreement, including Section 6.5 and the SpinCo SubsidiariesSection 6.13, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on from the date of this Agreement in accordance with until the existing terms Effective Time, none of Parent, Merger Sub or their respective Subsidiaries shall (i) knowingly take any action that would prevent, materially delay or materially impede the consummation of the Equity Financing or the Debt Financing; (ii) acquire or agree to acquire by merging or consolidating with, or by purchasing a material portion of the assets of or equity in, any Person (a “Specified Acquisition”), if the entering into of a definitive agreement relating to or the consummation of such awards and the Company Stock Plansa Specified Acquisition, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided thatapplicable, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, to (A) prevent, materially delay or materially impair the obtaining of, or adversely affect in any material respect the ability of Parent or its Affiliates to procure, any authorizations, consents, orders, declarations or approvals of any Governmental Authority or the expiration or termination of any applicable waiting period necessary to consummate the transactions contemplated by this Agreement, including the Merger, or (B) materially increase the risk of any Governmental Authority entering an order, ruling, judgment or injunction prohibiting the consummation of the Transactions;
transactions contemplated by this Agreement, including the Merger; or (xiii) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses take any action that would reasonably be expected to prevent, materially impair or materially delay the consummation of film and television and production programming (includinthe Merger or the satisfaction of any of the closing conditions thereto.
Appears in 2 contracts
Sources: Merger Agreement (CD&R Associates VIII, Ltd.), Merger Agreement (Cornerstone Building Brands, Inc.)
Interim Operations. (a) The Company covenants During the period commencing on the date hereof and agrees as to itself running until the earlier of the Closing Date and its Subsidiaries that, from and after the execution termination of this Agreement and prior to in accordance with Article VIII (the First Effective Time “Pre-Closing Period”), except (unless Parent shall otherwise approve in writingi) as expressly contemplated, which approval shall not be unreasonably withheldrequired or permitted by this Agreement (including, conditioned or delayedfor the avoidance of doubt, and except the Company LLC Units Redemptions), (ii) as (1) required by applicable Law, (2iii) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or as contemplated by the Final Step Plan) conditioned), or (3iv) otherwise expressly disclosed in as set forth on Section 5.01(a) 6.1 of the Company Disclosure Letter)Schedule, the Company shallwill, and shall will cause each of its Subsidiaries to use reasonable efforts to, use its reasonable best efforts to (A) conduct their businesses in the Retained Business ordinary course of business consistent with past practice, (B) manage their working capital in the ordinary course of business consistent with past practice, and the Company shall(C) preserve intact in all material respects their respective assets, properties, business organizations and shall cause each of its Subsidiaries torelationships with partners, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customersclients, suppliers, distributors, licensors, creditors, lessors, employees distributors and business associates and others having other Persons with which it has material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of dealings; provided that no action by the Company and or its Subsidiaries’ present employees and agentsSubsidiaries with respect to matters specifically permitted by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would otherwise constitute a breach of such provision of Section 6.1(b).
(b) Without limiting During the generality ofPre-Closing Period, and in furtherance ofexcept (i) as expressly contemplated, the foregoingrequired or permitted by this Agreement, the Company covenants and agrees (ii) as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2iii) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distributionsuch approval not to be unreasonably withheld, delayed or conditioned) or (3iv) otherwise expressly disclosed in as set forth on Section 5.01(b) 6.1 of the Company Disclosure Letter)Schedule, the Company shall not will not, and shall not permit any of will cause its Subsidiaries not to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its adopt any change in the certificate of incorporation or bylaws of the Company or (B) adopt any change in the comparable organizational document of any of the Company’s Subsidiaries (including any amendment to the Company LLC Agreement);
(ii) merge or comparable governing documents) (consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize, recapitalize or completely or partially liquidate or dissolve or otherwise enter into any agreement or arrangement imposing restrictions on the assets, operations or business of the Company or any of its Subsidiaries, other than amendments to the governing documents restructuring, reorganization, recapitalization, liquidation or dissolution of any Subsidiary of the Company that would are immaterial to the Company and its Subsidiaries, taken as a whole, and to the extent such actions are not preventexpected to be adverse to Parent;
(iii) issue, delay sell, pledge, encumber, dispose of or impair grant, or authorize the Initial Merger issuance, sale, pledge, encumbrance, disposition or grant of, any shares of capital stock of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other Transactions)rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) any such transaction among the Company and its Subsidiaries or among the Company’s Subsidiaries or (B) any grant or issuance of shares of Company Stock or Company LLC Units (1) in redemption of Company LLC Units in accordance with the terms of the Company LLC Agreement, (2) in respect of any exercise of Company Options or Company SARs, (3) in settlement of any Company RSUs or Company PSUs or (4) in connection with the conversion or cancellation of any Class G Units or Class G Common Stock;
(iv) make any loans, advances or capital contributions to or investments in any Person (other than to the Company or any of its Subsidiaries);
(v) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to any of its capital stock, except for (A) dividends or other distributions paid by any Subsidiary of the Company to the Company or to any other Subsidiary of the Company and (B) distributions in accordance with Section 5.03 of the Company LLC Agreement, to the extent consistent with past practice;
(vi) reclassify, split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)redeem, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock except for (other than A) any such transaction solely among the Company and any of its Subsidiaries or solely among any of the Company’s Subsidiaries, (1B) pursuant to the forfeiture ofacquisitions of shares of Company Stock or Company LLC Units in satisfaction of withholding obligations in respect of Company Equity Awards, or withholding (C) acquisitions of Taxes Company LLC Units in connection with respect to, a redemption of such Company Restricted Stock Units, Company Deferred Stock LLC Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement LLC Agreement;
(vii) create, incur, assume or as modified after the date of this Agreement in accordance with the terms of this Agreement) guarantee any Indebtedness for borrowed money or (2) purchases, repurchases, redemptions issue any debt securities or other acquisitions of securities of any wholly owned Subsidiary guarantees of the same or any other Indebtedness, except for (A) borrowings in the ordinary course of business under the Company Credit Agreement, (B) guarantees or credit support provided by the Company or any other wholly owned Subsidiary of its Subsidiaries of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary obligations of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned of its Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase to the cost of extent such Company Plan or benefits provided under such Company Plan based on the cost Indebtedness is in existence on the date hereofof this Agreement or incurred in compliance with clause (A) of this Section 6.1(b)(vii), (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, and (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness solely among the Company and its wholly owned Subsidiaries or among the Company’s Subsidiaries, ;
(Dviii) (1A) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into other than in the ordinary course of business consistent with past practice, enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement, (EB) commercial paper issued amend, modify or waive in the ordinary course of business consistent with past practice any material respect or in a principal manner adverse to the Company or any of its Subsidiaries, or terminate, any Material Contract (other than renewals or expirations of any such Contract in accordance with its terms), or (C) make any materially adverse changes to the Company’s policies regarding minimum quality, revenue or commission rates with respect to entry into new homeowner customer contracts or renewals of existing homeowner customer contracts;
(ix) make any material changes to the Company’s sales and marketing budget set forth on Section 6.1(b)(ix) of the Company Disclosure Schedule;
(x) make any material changes with respect to financial accounting policies or procedures, except as required by Law or by U.S. GAAP or official interpretations with respect thereto or by any Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(xi) settle any Action for an amount not to exceed in excess of $250,000,000 500,000 individually or $1,500,000 in the aggregate at other than (A) any time outstandingsettlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries is fully covered (less retention or deductible under the applicable insurance policy) by insurance coverage amounts maintained by the Company or any of its Subsidiaries, and (FB) Indebtednesssettlements or compromises of any Action for an amount not materially in excess of the amount, if any, reflected or specifically reserved in the balance sheet (or the notes thereto) of the Company included in the Company Reports filed prior to the date hereof (with materiality measured relative to the amount so reflected or reserved, if any); provided that, in the case of each of the foregoing clause (A) and clause (B), the proceeds settlement or compromise of which will be used to finance all such Action does not (x) impose any non-de minimis restriction on the business or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations operations of the Company or any of its Subsidiaries with respect to such Indebtedness (or Parent or any of its Subsidiaries after the Closing) and Parent and (y) include any non-de minimis non-monetary or injunctive relief, or the admission of wrongdoing, by the Company or any of its SubsidiariesSubsidiaries or any of their respective officers or directors;
(xii) assign, includingtransfer, following the Distributionsell, the Retained Subsidiarieslease, shall not have any obligations in respect thereoflicense, encumber (other than Permitted Liens), (G) Indebtedness under the Bridge Facilityabandon, refinancings permit to lapse, or replacements thereof and of commitments thereunder, and any refinancings or replacements otherwise dispose of any such refinancing material assets or replacement Indebtedness; provided that property (including any material Intellectual Property rights) except (A) as may be required by a Governmental Authority to permit or facilitate the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 consummation of the Company Disclosure Letter; provided, further, that Mergers or any of the Company shall consult with Parent prior other transactions contemplated in this Agreement solely to incurring Indebtedness under this clause (G)the extent required pursuant to Section 6.5, (HB) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to transactions among the Company and its Subsidiaries or among the Company’s Subsidiaries, taken (C) as a whole, than the Indebtedness being replaced or refinanced; provided, further, that permitted under the Company shall consult with Parent prior Credit Agreement, or (D) in the ordinary course of business and in no event in an amount or value exceeding $750,000 individually or $2,000,000 in the aggregate;
(xiii) except as required by the terms of any Plan in effect on the date of this Agreement: (A) grant any equity or equity-based awards or increase the compensation or other benefits payable or provided to incurring Indebtedness under this clause (H)the current or former employees, (I) any amendmentofficers, refinancing directors or renewal other individual service providers of the existing revolving and term loan facilities Employer Entities; (B) increase or accelerate the funding, payment or vesting of compensation or benefits provided under any Plan; (C) grant any cash or equity or equity-based incentive awards, bonus, change of control, severance or retention award or similar types of payments or benefits to any current or former employees, officers, directors or other individual service providers of the YES Facility Employer Entities; (D) establish, adopt, enter into, terminate or materially amend any Plan (or any plan, program, agreement or arrangement that would be a Plan if in effect on the date hereof) other than (x) offer letters or similar arrangements extended to newly hired individuals following the date hereof where such letters or arrangements do not provide for severance or equity-based compensation or (y) in connection with routine, immaterial or ministerial amendments to health and welfare plans that do not materially increase benefits or result in a material increase in administrative costs; or (E) amend or modify any refinancing thereofperformance criteria, metrics or targets under any Plan such that, as compared to those criteria, metrics or targets under any Plan in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company effect as of the date of this Agreement Agreement, the performance criteria, metrics or targets would reasonably be expected to be more likely to be achieved than in the ordinary course absence of business consistent with past practice such amendment or modification;
(xiv) acquire any business, assets or capital stock of any Person or division thereof, whether in whole or in connection with a Sky Acquisition part (and not for speculative purposes; provided that whether by purchase of stock, purchase of assets, merger, consolidation or otherwise), other than the acquisition of assets from vendors or Suppliers of the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness or any of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing Subsidiaries in the ordinary course of business consistent with past practice;
(vxv) with respect to the Retained Business, make (other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business a manner consistent with past practice and practice), change or revoke any material Tax election or change any annual Tax accounting period or method of Tax accounting, intentionally surrender any right to claim for a material Tax refund, credit, offset or other reduction in Tax liability, file any amended income Tax Return or other material amended Tax Return; enter into any closing agreement in respect of any material Tax; waive or extend the aggregate not statute of limitations in excess respect of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017any Taxes, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Businessor settle, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon resolve or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests Action in connection with the production or financing respect of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation AgreementsTaxes;
(viixvi) with respect incur, or commit to the Retained Businessincur, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not expenditures that are in excess of $50,000,000 500,000 individually if the transaction is not or $1,500,000 in the ordinary course aggregate, other than any capital expenditure (or $100,000,000 individually series of related capital expenditures) made in any event or (B) transactions among accordance with the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its Company’s annual capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) expenditure budget for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on periods following the date of this Agreement in accordance with the existing terms of such awards and the Company Stock PlansAgreement, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries provided to Parent prior to the Company or date hereof;
(xvii) (A) make any material modifications to any other wholly owned Subsidiary of the Company; provided thatmaterial Business Systems, excluding, for the avoidance of doubt, granting customary profit participation rights any routine updates or entering into customary film previously scheduled upgrades necessary for the continued performance, function or television financing partnerships operation of such Business Systems, or contractual arrangements (B) enter into, terminate, or materially amend or modify, any Contract for film the purchase, license or television financing shall be deemed not to be an issuance, sale or grant integration of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii)material property management system Software;
(ixxviii) with respect voluntarily terminate, suspend, abrogate, amend or modify any material Company Permit in a manner materially adverse to the Retained BusinessCompany and its Subsidiaries, taken as a whole;
(xix) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other than capital expenditures made in accordance with Section 5.01(b)(vrestrictive covenant obligation of any current or former officer, manager, employee or independent contractor of the Employer Entities;
(xx) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if negotiate or enter into any Collective Bargaining Agreement, (B) voluntarily certify or recognize any labor union, labor organization, works council, or group of employees as the transaction is not bargaining representative for any employees of the Company or any Company Subsidiary, or (C) implement or announce any plant closings, mass layoffs, group terminations, or other actions affecting employees of the Company or any Company Subsidiary that trigger notice requirements under the WARN Act;
(xxi) enter into any Real Property Lease, or modify, renew or terminate any Real Property Lease, in each case, unless in the ordinary course of business and the annual payment obligations thereunder by the Company or any of its Subsidiaries do not exceed $50,000,000 in any event or (B) $50,000,000 500,000 individually or $200,000,000 2,000,000 in the aggregate aggregate; or
(xxii) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement is intended to give Parent or Merger Subs or any yearof their Affiliates, in each case directly or indirectly, the right to acquire any businesscontrol or direct the operations of the Company and its Subsidiaries prior to the Company Merger Effective Time. Prior to the Company Merger Effective Time, whether by mergerthe Company shall exercise, consolidationconsistent with the terms and conditions of this Agreement, purchase complete control and supervision over its and its Subsidiaries’ respective operations.
(d) Subject to the terms of property or assetsthis Agreement, licenses or otherwise (valuing any non-cash consideration at its fair market value as of including Section 6.5 and Section 6.13, from the date of the agreement for such acquisition); provided that neither this Agreement until the Company nor any Merger Effective Time, none of its Retained Parent, Merger Subs or their respective Subsidiaries shall enter into (i) knowingly take any such transaction action that would, or would reasonably be expected to, prevent, materially delay or materially impair impede the consummation of the Transactions;
Equity Financing; or (xii) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses acquire or agree to acquire by merging or consolidating with, or by purchasing substantially all of film and television and production programming the assets of or equity in, any Person (includina “Specified Acquisition”), if the entering into of a definitive agreement relating to or the consummation of such a Specified Acquisition, as applicable, would reasonably be expected to materially increase the risk of any Governmental Authority entering an Order, ruling, judgment or injunction prohibiting the consummation of the transactions contemplated by this Agreement, including the Mergers.
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Vacasa, Inc.), Agreement and Plan of Merger (Vacasa, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) otherwise expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by this Agreement or the Final Step Plan) Stock Option Agreement or (3) otherwise expressly disclosed set forth in Section 5.01(a) 7.1 of the Company Disclosure Letter), the ):
(a) The business of all Company shall, and Entities shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business be conducted in the ordinary and usual course (it being understood and agreed that nothing contained herein shall permit the Company to enter into or engage in (through acquisition, product extension or otherwise) the business of selling any products or services materially different from existing products or services of the Company Entities or to enter into or engage in new lines of business without Parent's prior written approval), and it shall be conducted in compliance in all material respects with all applicable Laws.
(b) To the extent consistent with past practice(a) above, and the each Company shall, and Entity shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use all commercially reasonable efforts to preserve the Retained Business’ its business organization intact and maintain the Retained Business’ its existing relations and goodwill with Governmental Entities, customers, suppliers, reinsurers, distributors, licensors, creditors, lessors, employees and business associates associates, and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of maintain all Permits necessary for the Company and its Subsidiaries’ present employees and agentsEntities to conduct business in the jurisdictions in which they currently conduct business.
(bc) Without limiting the generality ofNo Company Entity shall permit a material change in any of its underwriting, and investment, actuarial, financial reporting or accounting practices or policies or in furtherance ofany material assumption underlying an actuarial practice or policy, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) may be required by any change in GAAP, statutory accounting principles or applicable Law, .
(2d) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the The Company shall not and shall not permit (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries to:
Subsidiaries; (i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (Aii) amend its certificate Certificate of incorporation Incorporation or bylaws Bylaws or amend, modify or terminate the Rights Agreement; (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (Biii) split, combine, subdivide combine or reclassify its outstanding shares of capital stock stock; (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction)iv) authorize, (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock other than (except for (1A) any dividends or distributions paid by a from its direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or Subsidiaries, (2B) normal semiannual regular quarterly cash dividends on the Company Common Stock as described in Section 5.01(b)(inot to exceed $.12 per share per quarter, and (C) of regular semi-annual cash dividends required to be paid by the Company Disclosure Letter), (D) enter into any agreement on the Company 9% Preferred Stock in accordance with respect to the voting Company's Certificate of its capital stock, Incorporation; or (Ev) purchase, repurchase, redeem or otherwise acquire or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) as may be required pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect Plans.
(e) No Company Entity shall (i) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any other property or assets (other than shares of Company Common Stock issuable pursuant to Company Options outstanding on the date hereof under any of this Agreement the Company Stock Plans); (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other Assets (including capital stock of any of Company Subsidiary) or incur or modify any material indebtedness or other material Liability; (iii) make or authorize or commit for any capital expenditures other than in amounts not exceeding $1 million in the aggregate; (iv) by any means, make any acquisition of, or investment in, assets or stock of any other Person or entity, including by way of assumption reinsurance, in excess of $100,000 individually or $1 million in the aggregate (other than in connection with ordinary course investment activities); or (v) make any capital investment in or loan to NHP Holding Company, Inc. or any entity controlled by it.
(f) No Company Entity shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans, or increase the salary, wage, bonus or other compensation of any employees, except annual base salary (and corresponding benefit) increases occurring in the ordinary and usual course of business (which shall not exceed on an annual basis the lesser of 10% or $5,000 for any individual employee) or as modified after required by applicable Law or under existing Contracts.
(g) Each Company Entity shall use all commercially reasonable efforts to ensure that no payments are paid or become due under the date change of this Agreement control employment agreements listed in accordance with Section 5.6 of the Company Disclosure Letter.
(h) No Company Entity shall pay, discharge, settle or satisfy any claims, Liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of (A) claims arising under the terms of this Agreement) products, contracts or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company policies issued by the Company Insurance Subsidiaries in the ordinary and usual course of business, and (B) such other claims, Liabilities or any other wholly owned Subsidiary of the Company);obligations (including Litigation) as shall not exceed $250,000 per claim.
(iii) merge No Company Entity shall make or consolidate with change any material Tax election, settle any material audit, file any material amended Tax Returns or permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated except in the ordinary and usual course of business.
(j) No Company Entity shall enter into any Contract containing any provision or covenant limiting in any material respect the ability of any Company Entity to (A) sell any products or services of or to any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions B) engage in any line of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongbusiness, or (C) compete with or to obtain products or services from any Person or limiting the restructuring, reorganization ability of any Person to provide products or liquidation of, services to any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);Entity.
(iiik) except as expressly required by No Company Entity shall enter into any Company Plan as in effect on the date hereof: new quota share or other reinsurance transaction (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofcontain standard cancellation and termination provisions, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiariesthat, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at business, materially increases or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of reduces the Company or any Insurance Subsidiaries' consolidated ratio of its Subsidiariesnet written premiums to gross written premiums, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) pursuant to which $5 million or more in gross written premiums are ceded by wholly owned the Company Insurance Subsidiaries to any Person other than a Company Entity.
(l) No Company Entity shall enter into, amend or terminate any Material Contract (including for this purpose the Amended Shareholders Agreement, dated May 23, 1994, by and among JA Services, Inc., Dimension Holding Company, Inc. and NHP Holding Company, Inc.).
(m) The Company Entities shall make new investments only in Qualified Investments.
(n) The Company shall use all commercially reasonable efforts to ensure that there will be no downgrade in any Company Insurance Subsidiary's rating relating to its financial strength or claims-paying ability as published by A.M. Best Company.
(o) No Company Entity shall take any action or omit to take any other wholly owned Subsidiary action that would cause any of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights conditions set forth in Sections 8.2(a) or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed (b) not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or being satisfied (other rights to acquire, any such shares for purposes of this Section 5.01(b)(viiithan by waiver);.
(ixp) with respect No Company Entity shall authorize or enter into a Contract to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in do any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Fortis Inc /Nv/), Agreement and Plan of Merger (Alden John Financial Corp)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) otherwise expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letterthis Agreement), the Company shall, business of it and shall cause each of its Subsidiaries to, shall be conducted in the ordinary and usual course and it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly required by this Agreement, (B) as Parent shall otherwise may approve in writing, which such approval shall not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except (C) as (1) required by applicable Law, (2) expressly required contemplated by the Transaction Documents (including IP Group Sale and Trust Distribution as described in connection with the Separation and the Distribution) term sheet attached hereto as Exhibit B or (3D) otherwise as expressly disclosed in set forth on Section 5.01(b5.1(a) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (organizational documents, except for (1) any dividends or distributions paid as specifically required by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing changes or restrictions on its assets, operations or businesses;
(iii) acquire from any other Person any asset or group of related assets with a value or purchase price in excess of $25,000 individually or $100,000 in the aggregate, in any transaction or series of related transactions;
(iv) issue, sell, pledge, dispose of, grant, transfer, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than transactions the issuance of the type contemplated shares by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such to the Company or a wholly owned Subsidiary is of the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongCompany), or the restructuringsecurities convertible or exchangeable into or exercisable for any shares of such capital stock, reorganization or liquidation ofany options, warrants or other rights of any wholly owned Subsidiaries kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrances on any FCC Licenses, or create or incur any Encumbrances on any other asset or group of related assets of the Company that would not prevent, materially delay or materially impair any of its Subsidiaries having a value in excess of $25,000 individually or $100,000 in the Transactions)aggregate;
(iiivi) except as expressly required by make any Company Plan as loans, advances, guarantees or capital contributions to or investments in effect on the date hereof: any Person (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than the Company or any such action taken for purposes direct or indirect wholly owned Subsidiary of replacingthe Company), renewing or extending a broadly applicable material Company Plan except in the ordinary course of business consistent with past practice that does not materially increase and in no event in excess of $10,000 individually or $25,000 in the cost aggregate;
(vii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofits capital stock, (Bexcept for dividends paid by any direct or indirect Subsidiary of the Company to its stockholders or unit-holders on a pro rata basis in the ordinary course of business consistent with past practices) grant or provide enter into any transaction agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or retention bonuses to redeem, purchase or otherwise acquire, directly or indirectly, any directorof its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(ix) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, officer, employee or issue or sell any debt securities or warrants or other service provider rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (A) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the terms of the indebtedness being replaced as of the date of such replacement, or (B) in connection with guarantees by the Company of indebtedness of wholly owned Subsidiaries of the Company as of the Effective Time complying with clause (A) above;
(x) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, unless it is on terms substantially consistent with, or on terms more favorable to the Company and/or its Subsidiaries (and to Parent and its Subsidiaries and Affiliates following the Closing) than, a Contract it is replacing;
(xi) amend, modify or terminate any Material Contract, or waive, release or assign any material rights, claims or benefits under any Material Contract, in each case except in the ordinary course of business consistent with past practices;
(xii) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles, by Regulation S-X under the Securities Act, or by the Public Company Accounting Oversight Board or Financial Accounting Standards Board;
(xiii) settle (x) any litigation or claim or (y) other proceedings before a Governmental Entity, in each case for an amount in excess of $25,000 (excluding amounts that may be paid under insurance policies);
(xiv) except as required by applicable Law, (A) make any Tax election that is material to the Company and its Subsidiaries, taken as a whole, or take any position that is material to the Company and its Subsidiaries, taken as a whole, on any material Tax Return filed on or after the date of this Agreement, that is inconsistent with elections made or positions taken in prior periods, (B) change any material method of Tax accounting, which change is material to the Company and its Subsidiaries, taken as a whole, (C) amend any Tax Return with respect to an amount of Taxes that is material to the Company and its Subsidiaries, taken as a whole, or (D) settle or resolve any Tax controversy that is material to the Company and its Subsidiaries, taken as a whole, other than, in each case, in the ordinary course of business consistent with past practice;
(xv) transfer, sell, lease, assign, license, surrender, divest, forfeit, cancel, abandon or allow to lapse or expire, fail to extend or defend or otherwise dispose of any part of its assets (including material Intellectual Property), FCC Licenses, securities or equity of any Subsidiary, licenses, operations, rights, product lines, businesses or interests therein of the Company or its Subsidiaries, except (A) in connection with services or products provided in the ordinary course of business consistent with past practices or sales of obsolete assets, or (B) for sales, leases, licenses or other dispositions of any asset or any group of related assets (other than FCC Licenses or wireless spectrum) with a fair market value not in excess of $100,000 individually or $250,000 in the aggregate;
(xvi) make or commit to any capital expenditures other than in the ordinary course of business consistent with past practice and in the aggregate in any event not in excess of $100,000;
(xvii) enter into any Contract pursuant to which the Company or any of its Subsidiaries agrees to provide any wireless services to any Person as an agent or reseller if such Contract is not terminable by the Company or one of its Subsidiaries on 60 days’ or less notice without penalty;
(xviii) hire or rehire any new or additional employees or terminate any current employees, except in the ordinary course of business, consistent with past practice;
(xix) except as required pursuant to a Benefit Plan or existing written, binding agreements as in effect as of the date of this Agreement, or as otherwise required by applicable Law, (A) grant new or increase the existing compensation, bonus or pension, welfare severance or other benefits of payable or to become payable to any director, officer or employee of the Company or any of its Subsidiaries, except (B) adopt, enter into, establish, or materially amend, modify or terminate any Benefit Plan or any arrangement that would constitute a Benefit Plan had it been in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider effect as of the Company date of this Agreement or any of its Subsidiaries, (EC) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of expressly required by any such refinancing Benefit Plan or replacement Indebtednessprovided in this Agreement; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;or
(vxx) with respect to the Retained Businessagree, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 2 contracts
Sources: Merger Agreement (Straight Path Communications Inc.), Merger Agreement (Straight Path Communications Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after From the execution date of this Agreement and prior to until the First Effective Time (Time, except as set forth in SECTION 5.2(a) OF THE COMPANY DISCLOSURE LETTER, unless Parent shall otherwise approve has consented in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)writing thereto, the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except conduct its operations according to its ordinary course of business consistent with respect past practice and in compliance in all material respects with all applicable Laws; (ii) use its commercially reasonable efforts to SpinCo preserve intact its business organizations and goodwill, keep available the SpinCo Subsidiaries services of its officers, employees and consultants, and maintain satisfactory relationships with those Persons having business relationships with them; (other than iii) upon the discovery thereof, promptly notify Parent of the existence of any breach of any representation or warranty contained herein (or, in the case of clause any representation or warranty that makes no reference to Company Material Adverse Effect or materiality, any breach of such representation or warranty in any material respect) or the occurrence of any event that would cause any representation or warranty contained herein no longer to be true and correct (Aor, in the case of any representation or warranty that makes no reference to Company Material Adverse Effect or materiality, to no longer be true and correct in any material respect); (iv) promptly deliver to Parent true and correct copies of any report, statement or schedule filed with the SEC subsequent to the date of this Agreement; and (v) pay its Taxes when due.
(b) From and after the date of this Agreement until the Effective Time, except as set forth in SECTION 5.2(b) OF THE COMPANY DISCLOSURE LETTER, unless Parent has consented in writing thereto (which consent shall not be unreasonably withheld or delayed), the Company shall not, and shall cause its Subsidiaries not to: (Ai) amend its certificate Certificate of incorporation Incorporation or bylaws By- Laws; (ii) offer, issue, sell or comparable governing documents) (pledge any shares of its capital stock or other than amendments to the governing documents of any Subsidiary of ownership interest in the Company that would not preventor its Subsidiaries, delay or impair the Initial Merger any securities convertible into or the other Transactions)exchangeable for any such shares or ownership interest, (B) splitor any rights, combine, subdivide warrants or reclassify its outstanding options to acquire or with respect to any such shares of capital stock, ownership interest, or convertible or exchangeable securities; (iii) effect any stock split or otherwise change its capitalization as it exists on the date hereof; (except for iv) grant, confer or award any such transaction by a wholly owned subsidiary option, warrant, convertible security or other right to acquire any shares of the Company which remains a wholly owned Subsidiary after consummation of such transaction), its or its Subsidiaries' capital stock; (Cv) declare, set aside or pay any dividend or make any other distribution payable in cash, stock or property (or any combination thereof) in payment with respect of to any shares of its capital stock or other ownership interests (except for (1) any dividends or distributions paid other than such payments by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or Subsidiaries to the Company Company); (vi) directly or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)indirectly redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire any shares of its capital stock or capital stock of its Subsidiaries or any securities that are convertible into or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding other equity interests in, or any outstanding options, warrants or rights of Taxes with respect toany kind to acquire any shares of capital stock of, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Personequity interests in, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries; (vii) sell, (C) increase the compensationlease, bonus license, mortgage, pledge, encumber, transfer, exchange or pension, welfare or other benefits otherwise dispose of any director, officer or employee of the Company or any of its Subsidiariesproperties or assets, except in the ordinary course of business consistent with past practice with respect to whether tangible or intangible (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any including capital stock of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced sale or refinanced, and in each case with a maturity date no more than 10 years after the date disposition of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement inventory in the ordinary course of business consistent with past practice or the sale, lease or other disposition of assets which individually or in connection with a Sky Acquisition and the aggregate, are obsolete or not for speculative purposes; provided that material to the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its SubsidiariesSubsidiaries taken as a whole; provided that (viii) acquire by merger or consolidation with, by purchase of any equity interest of or by any other manner, any business or entity or otherwise acquire any assets which would be material, individually or in the aggregate principal amount aggregate, to the Company and its Subsidiaries taken as a whole, except for purchases of such Indebtednessinventory, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing supplies or capital equipment in the ordinary course of business consistent with past practice;
(v) with respect to and except for the Retained Businessacquisition of any business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties entity or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less having aggregate individual consideration greater than $100,000,00050,000 or aggregate consideration greater than $100,000; (ix) incur or (B) assume any long-term or short-term debt, except for working capital purposes and the purchase of capital equipment in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in under the Company’s capital expenditure budget for each of 2017, 2018 and 2019 's existing credit agreements set forth in Section 5.01(b)(v5.2(b) of the Company Disclosure Letter;
; (vix) with respect to the Retained Businessassume, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon guarantee or otherwise dispose become liable or responsible (whether directly, contingently or otherwise) for the obligations of any material Intellectual Propertyother Person except its Subsidiaries; provided that this clause (vixi) shall not restrict (A) ordinary course non-exclusive licenses make or ordinary course security interests in connection with the production forgive any loans, advances or financing of film capital continuations to, or investments in, any other Person other than loans and television programming advances to officers or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not employees in the ordinary course or of business, not to exceed $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively 100,000 in the SpinCo Business and aggregate; (Exii) Affiliation Agreements;
increase the compensation (viior benefits) with respect payable to the Retained Businessor to become payable to any director, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon officer or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi))other employee, except for increases in salary or wages of non-officer employees in the ordinary course of business and consistent with past practice; (Axiii) salesestablish, leasesadopt, licenses enter into, materially amend, or other dispositions of take any properties action to accelerate any rights or assets benefits under any collective bargaining agreement or any Plan; (excluding capital stock of the Retained Subsidiariesxiv) with a fair market value not effect any reorganization or recapitalization; (xv) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $50,000,000 250,000 individually if and $500,000 in the transaction is not aggregate, other than the payment, discharge, settlement or satisfaction in the ordinary course of business or $100,000,000 individually in any event accordance with their terms, of liabilities disclosed, reflected or reserved against in the most recent consolidated financial statements (Bor the notes thereto) transactions among of the Company and included in the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, Company SEC Reports or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on incurred since the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not financial statements in the ordinary course of business, or cancel any indebtedness in excess of $10,000 individually and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 50,000 in the aggregate in aggregate; (xvi) take any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided action that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, : (A) prevent, impair or materially delay the ability of the Company, Parent or materially impair Merger Sub to consummate the Merger or (B) cause any of the conditions to the consummation of the Transactions;
Merger not to be satisfied; (xxvii) other than capital expenditures made make or change any Tax election, file any amended Tax Return, enter into any closing agreement, settle or compromise any liability with respect to Taxes, agree to any material adjustment of any Tax attribute, file any claim for a refund of Taxes, or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment; or (xviii) agree in accordance with Section 5.01(b)(v) and other than purchases and licenses writing or otherwise to take any of film and television and production programming (includinthe foregoing actions.
Appears in 2 contracts
Sources: Merger Agreement (Integrated Defense Technologies Inc), Merger Agreement (Integrated Defense Technologies Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after From the execution date of this Agreement and prior until the Effective Time or the earlier termination of this Agreement, except (v) in connection with the Carveout Transaction, (w) as set forth in Section 6.1(a) of the Company Disclosure Letter, (x) as otherwise expressly contemplated or permitted by this Agreement (including Section 6.17), (y) to the First Effective Time extent consented to in writing by Parent (unless Parent shall otherwise approve in writing, which approval consent shall not be unreasonably withheld, conditioned delayed or delayed, and except conditioned) or (z) as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct cause the Retained Business business of it and its Subsidiaries to be conducted in the ordinary course of business consistent with past practice, and the Company it shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially their respective reasonable best efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting associates. Notwithstanding the generality of, and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior subject to the First Effective Time exceptions set forth in clauses (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Laww), (2x), (y) expressly required by the Transaction Documents and (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(bz) of the Company Disclosure Letter)immediately preceding sentence, the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and amend the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or incorporation, bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company any of its Subsidiaries;
(ii) acquire (by merger, consolidation, acquisition of stock or (2assets or otherwise) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) any corporation, partnership or other business organization or any property or assets outside of the Company Disclosure Letter)ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $5 million in any transaction or series of related transactions, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) acquisitions pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as Contracts in effect on as of the date of this Agreement (or as modified after that have been made available to Parent prior to the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(iiiii) merge or consolidate with any other Person, Person or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is or any of its Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber or authorize the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amongissuance, sale, pledge, disposition, grant, transfer or the restructuring, reorganization or liquidation encumbrance of, any wholly owned Subsidiaries shares of the Company that would not preventcapital stock or securities convertible, materially delay exchangeable or materially impair the Transactions);
exercisable therefor (iiicollectively, “Equity Interests”) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its SubsidiariesSubsidiaries (including any Company Stock Options, Company Restricted Stock, Stock Appreciation Rights, Performance Share Units, Phantom Stock Units, Phantom Stock Appreciation Units, Time Stock Appreciation Rights or Performance Stock Appreciation Rights), except issuances or dispositions of (A) Shares pursuant to Company Stock Options, Stock Appreciation Rights or Performance Share Units outstanding on the date of this Agreement under the Company Plans, (B) Shares in connection with the matching of contributions under the Company’s 401(k) Plans, (C) increase Shares or options or rights to acquire Shares in connection with grants or awards of stock based compensation made in accordance with Section 6.1(a)(ix) hereof or (D) Equity Interests pursuant to the compensationRights Agreement;
(v) declare, bonus set aside, establish a record date for, or pensionpay any dividends on or make any other distributions (whether payable in cash, welfare stock, property or a combination thereof) in respect of any of the capital stock, other than any dividends from any wholly owned Subsidiary of the Company to the Company or to another wholly owned Subsidiary of the Company;
(vi) reclassify, split, combine, subdivide, repurchase, redeem or otherwise acquire, directly or indirectly, any of the Equity Interests, except for (A) redemptions, purchases or acquisitions pursuant to the exercise or settlement of Company Stock Options, Stock Appreciation Rights, Performance Share Units, employee severance, retention, termination, change of control and other contractual rights existing on the date of this Agreement on the terms in effect on the date of this Agreement, including with respect to Company Restricted Stock or (B) pursuant to the Rights Agreement;
(vii) except as contemplated by the terms of this Agreement, including pursuant to Section 6.18, (A) incur, issue or modify in any material respect the terms of any Indebtedness for borrowed money, or assume, prepay, (except as required pursuant to the terms of any Indebtedness currently outstanding), defease, cancel, acquire, guarantee or endorse, or otherwise become responsible for (whether directly or indirectly, contingently or otherwise), the indebtedness of any Person, (B) issue or sell any debt securities or warrants or other benefits rights to acquire any debt security of the Company or any of its Subsidiaries or (C) assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person for borrowed money (in each case, for the avoidance of doubt, excluding trade payables, capitalized lease obligations, or obligations issued or assumed as consideration for services or property, including inventory), except for (1) Indebtedness incurred under the Second Amended and Restated Loan and Guaranty Agreement, dated August 16, 2011, by and among Collective Brands Financial, Inc., the Guarantors signatory thereto, the Lenders signatory thereto, ▇▇▇▇▇ Fargo Retail Finance, LLC and Citigroup Global Markets, Inc. (the “Revolving Credit Facility”), (2) letters of credit issued pursuant to the Revolving Credit Facility or otherwise issued in the ordinary course of business, (3) interest rate and other hedging arrangements on customary commercial terms in the ordinary course of business and (4) Indebtedness owed by any controlled Subsidiary of the Company to the Company; provided that the Company and its Subsidiaries shall not materially increase or decrease any intercompany payables or receivables except at or in connection with the Closing as contemplated by or required to accomplish the Carveout Transaction;
(viii) grant or incur any Lien material to the Company and its Subsidiaries, other than (A) Permitted Encumbrances; (B) pledges or deposits by the Company or any of its Subsidiaries in the ordinary course of business under workmen’s compensation Laws, unemployment insurance Laws or similar Laws; (C) good faith deposits in connection with Contracts (other than for the payment of Indebtedness) to which the Company or one of its Subsidiaries is a party, in each case, in the ordinary course of business; (D) Liens that may be incurred or granted pursuant to or in accordance with the terms of any Indebtedness in effect as of the date hereof, in connection with any Indebtedness permitted pursuant to Section 6.1(a)(vii) or (E) pursuant to licenses or sublicenses of Intellectual Property granted in the ordinary course of business;
(ix) except as required pursuant to agreements in effect prior to the date of this Agreement, or as otherwise required by applicable Law, (A) grant, pay or agree to pay any severance or termination payments or any benefits to any current or former director, officer or employee of the Company or any of its Subsidiaries, except in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice practice, (B) increase the compensation or bonus (or grant, pay or agree to pay bonuses) to any current or former director, officer or employee of the Company or any of its Subsidiaries, except in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with respect to past practice, (1C) increase pensions or welfare benefits of any current or former director, officer or employee of the Company or any of its Subsidiaries, except in the case of employees below who are not executive officers of the level Company, in the ordinary course of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changebusiness, (D) increase establish, adopt, terminate or materially amend any Company Plan or materially amend the severance terms of any Equity Awards, or termination payments enter into any new, or benefits payable to amend any existing change in control arrangements or retention, retirement or similar agreements with any new, current or former director, officer, officer or employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of or take action to fund, any compensation payable or benefits under to become payable or provided to any current or former director, officer or employee of the Company Plan or any of its Subsidiaries, except as otherwise provided in this Agreement, (including F) enter into any equity-based awardsnew, or amend any existing, employment agreements with any new, current or former director, officer or employee of the Company or any of its Subsidiaries except in the case of employees who are not executive officers of the Company, in the ordinary course of business consistent with past practice and with an annual base salary and incentive compensation opportunity not to exceed $175,000 or (G) grant or make any equity awards that may be settled in Shares, preferred shares, or any Equity Interest or any other securities of the Company or any of its Subsidiaries, or the value of which is linked directly or indirectly, in whole or in part, to the price or value of any Shares, preferred shares, Equity Interests or other Company securities or Subsidiary securities;
(x) other than in the ordinary course of business, (A) make or change any material Tax election, (B) change the Company’s or any Subsidiary of the Company’s method of accounting for Tax purposes, (C) file any material amended Tax Return, (D) settle, concede, compromise or abandon any material Tax claim or assessment, (E) surrender any right to a refund of material Taxes or (F) consent to any extension or waiver of the limitation period applicable to any claim or assessment with respect to material Taxes;
(xi) except as required by GAAP, a Governmental Entity or applicable Law, make any material changes to accounting policies or principles;
(xii) except in the ordinary course of business, make any loans, advances or capital contributions to, or investments in, any Person, other than (i) to or in the Company or to or in any direct or indirect controlled Subsidiary of the Company or (ii) to or in franchise partners or wholesale customers;
(xiii) (A) enter into any Contract that would have been a Company Material Contract pursuant to subsections (C), (D), (E), (F), (G), (J), (K) change or (M) of Section 5.1(q)(i) had it been entered into prior to the date of this Agreement, (B) terminate, materially amend or waive any actuarial material rights under any Company Material Contract or any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement, in each case in a manner materially adverse to the Company and its Subsidiaries, excluding any termination upon expiration of a term in accordance with the terms of such Company Material Contract, or (C) except in the ordinary course of business, waive any material default under, or release, settle or compromise any material claim against the Company or liability or obligation owing to the Company, under any Company Material Contract; provided, in each case, that the Company and its Subsidiaries shall be permitted to renew or replace any Company Material Contract with one or more Contracts on substantially similar terms;
(xiv) transfer, sell, lease, license, assign, mortgage, pledge, divest or otherwise dispose of any entity or material assets, product lines, rights or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, in each case having a current value of $2,000,000 individually or $5,000,000 for all such transactions in the aggregate, other than (A) inventory, supplies and other assets in the ordinary course of business, (B) pursuant to Contracts in effect prior to the date of this Agreement that have been made available to Parent prior to the date of this Agreement or (C) pursuant to licenses or sublicenses of Intellectual Property granted in the ordinary course of business;
(xv) except for the expenditures contemplated by the capital budgets set forth in Section 6.1(a)(xv) of the Company Disclosure Letter or for expenditures required by Law or in response to casualty loss or property damage, make or authorize any capital expenditures;
(xvi) other than pursuant to Section 6.16, waive, release, settle or compromise any pending or threatened litigation, arbitration, claim (excluding ordinary course disputes with vendors in which no litigation or arbitration commences) or action against the Company or any of its Subsidiaries other than settlements or compromises of any litigation, arbitration, claim or action (A) where the amount paid in an individual settlement or compromise by the Company (and not including any amount paid by the Company’s insurance carriers or third parties) does not exceed $1,000,000 individually or $5,000,000 in the aggregate or (B) that would impose any material restrictions on the business or operations of the Company or its Subsidiaries; provided that the foregoing clause (A) will not restrict the Company’s ability to settle any ordinary course claim involving a settlement amount not in excess of $100,000;
(xvii) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees reorganization of the Company or any of its Subsidiaries;
(ivxviii) incur any Indebtedness or issue any warrants or other rights fail to acquire any Indebtedness, except (A) maintain in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to full force and effect material insurance policies covering the Company and its SubsidiariesSubsidiaries and their respective properties, taken as assets and businesses in a whole, than existing Indebtedness, form and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business amount consistent with past practice, unless the Company determines in its reasonable commercial judgment that the form or amount of such insurance should be modified; or
(Exix) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not agree, authorize or commit to exceed $250,000,000 in the aggregate at do any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend foregoing actions or enter into any letter of intent (and fees and expenses in connection therewithbinding or non-binding) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company similar agreement or any of its Subsidiaries arrangement with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;foregoing actions.
(vb) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties Neither Parent nor Merger Sub shall knowingly take or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of permit any of its Retained Subsidiaries but not including their Affiliates to take any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided action that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would could reasonably be expected to, prevent, materially delay to prevent or materially impair impede the consummation of the Transactions;Merger, the Carveout Transaction or the other transactions contemplated by this Agreement and the Carveout Transaction Agreement.
(xc) other than capital expenditures made Nothing contained in accordance this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Affiliates’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with Section 5.01(b)(v) the terms and other than purchases conditions of this Agreement, complete control and licenses of film supervision over its and television and production programming (includinits Subsidiaries’ respective operations.
Appears in 2 contracts
Sources: Merger Agreement (Wolverine World Wide Inc /De/), Merger Agreement (Collective Brands, Inc.)
Interim Operations. (a) The Company Each of FMCTI and Technip covenants and agrees as to itself and its respective Subsidiaries that, from and after the execution date of the MOU and until the earlier of the FMCTI Effective Time or the termination of this Agreement and prior in accordance with its terms, unless FMCTI (in the case of any action proposed to be taken by Technip or any Subsidiary of Technip) or Technip (in the First Effective Time (unless Parent case of any action proposed to be taken by FMCTI or any Subsidiary of FMCTI) shall otherwise approve in writingwriting (which approval, which approval other than with respect to Section 5.1(b)(iii) and Section 5.1(b)(v), shall not be unreasonably withheld, conditioned or delayeddelayed by the party from whom it is requested), and except as (1) required by applicable Law, (2) Self-Regulatory Organization, or as expressly required contemplated by the Transaction Documents this Agreement (including with respect to the Preliminary Transactions and actions that are incidental thereto) or, in connection with the Separation and the Distribution or case of Technip, as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a) 5.1 of the Company Technip Disclosure Letter or, in the case of FMCTI, as otherwise set forth in Section 5.1 of the FMCTI Disclosure Letter), :
(a) the Company shall, business of it and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in the ordinary and usual course of business consistent with past practice, practice and the Company shall, it and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, shall use their respective commercially reasonable efforts to preserve the Retained Business’ intact its business organization intact and maintain the Retained Business’ its existing relations and goodwill with all Governmental EntitiesEntities (including applicable Regulatory Authorities) and Self-Regulatory Organizations, clients, customers, suppliers, distributors, licensors, creditors, lessors, employees employees, stockholders and other Persons with which it or its Subsidiaries has significant business associates and others having material business dealings with the Retained Business (including material content providersrelations, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.as applicable;
(bi) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit neither it nor any of its Subsidiaries to:
shall amend or propose to amend, modify, waive, rescind or otherwise change any provisions of its Organizational Documents, whether by merger or otherwise); (iii) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A))neither FMCTI nor Technip, (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not preventas applicable, delay or impair the Initial Merger or the other Transactions), (B) shall split, combine, subdivide combine or reclassify its outstanding shares of capital stock or other equity interests; (except for iii) neither it nor any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) its Subsidiaries shall declare, set aside or pay any type of dividend or distribution other distribution, whether payable in cash, stock stock, property or property (or any a combination thereof) , in respect of any capital stock or other equity interests, as appropriate, other than dividends payable by its direct or indirect wholly owned Subsidiaries to it or another of its direct or indirect wholly owned Subsidiaries in the ordinary and usual course of business and consistent with past practice; (iv) it shall not adopt a plan of merger, consolidation or complete or partial liquidation or resolutions providing for a merger, consolidation or complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization; or (v) except (x) for the acquisition by such party of shares of its capital stock (except for (1) any dividends or distributions paid other equity interests in connection with the surrender of such shares by a direct holders of FMCTI Stock Awards or indirect wholly owned Subsidiary Technip Stock Awards, as applicable, in order to pay the exercise price of such Stock Awards in accordance with the Company to another direct or indirect wholly owned Subsidiary terms of the Company or to the Company such Stock Awards or (2y) normal semiannual cash dividends on for the Common Stock as described in Section 5.01(b)(i) withholding or disposition of the Company Disclosure Letter), (D) enter into any agreement shares of capital stock or other equity interests to satisfy withholding Tax obligations with respect to FMCTI Stock Awards or Technip Stock Awards, as applicable, granted pursuant to the voting FMCTI Stock Plan and the Technip Stock Plans, as applicable, in accordance with the terms of such Stock Awards, neither it nor any of its capital stock, or (E) purchase, Subsidiaries shall repurchase, redeem or otherwise acquire any shares of its or their capital stock or other equity interests, as applicable, or any securities convertible into or exchangeable into or exercisable for any shares of its or their capital stock or other equity interests, as applicable;
(other than c) neither it nor any of its Subsidiaries shall (1i) pursuant to the forfeiture issue, sell, pledge, dispose of or encumber any shares of, or withholding securities convertible into or exchangeable or exercisable for, or options, warrants, calls, profits interests, conversion rights, stock appreciation rights, stock-based units (performance based or otherwise), redemption rights, repurchase rights, commitments or rights of Taxes any kind to acquire or other rights that relate to or are derivative of any of its or their capital stock, voting securities or other equity interests, or any bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with respect toits stockholders on any matter, Company Restricted other than FMCTI Shares or Technip Shares (as applicable) issuable or transferable pursuant to (A) Technip OCÉANEs outstanding prior to the date of the MOU or (B) FMCTI Stock UnitsAwards or Technip Stock Awards outstanding on or awarded prior to the date of the MOU or made by FMCTI or Technip, Company Deferred Stock Units or Company Performance Stock Unitsas applicable, after the date of the MOU in accordance with Section 5.1(d), except, in each case case, in accordance connection with internal reorganizations entered into in the ordinary and usual course of business solely among such party’s wholly owned Subsidiaries which will not adversely affect the Technip Intended French Tax Treatment or otherwise be reasonably expected to have a material adverse Tax consequence on the Topco Group after the Closing, (ii) incur any indebtedness for borrowed money (including any guarantee of indebtedness) or issue any debt securities, except (x) in connection with refinancings of existing indebtedness for borrowed money upon market terms and conditions or (y) for drawdowns of credit facilities outstanding as of the date of the MOU (or refinancings of such credit facilities permitted under clause (x)) in the ordinary and usual course of business and consistent with past practice practice; or (iii) make or authorize or commit to any capital expenditures, other than in the ordinary and usual course of business and consistent with past practice;
(d) except as required by applicable Law or the terms of the Company Stock Plans as any Benefit Plan or Labor Agreement existing and in effect on the date of this Agreement the MOU, neither it nor any of its Subsidiaries shall (i) terminate, establish, adopt, enter into, or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchasesmaterially amend any Benefit Plan, repurchasesTechnip Stock Award, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company FMCTI Stock Award or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company arrangement that would not prevent, materially delay be a FMCTI Benefit Plan or materially impair the Transactions);
(iii) except as expressly required by any Company a Technip Benefit Plan as if in effect on the date hereof: of the MOU, (Aii) establishincrease the salary, adoptwage, amend bonus, pension, severance, fringe benefits or terminate other compensation payable to any material Company Plan current or amend former Service Provider or enter into any contract, agreement, commitment or arrangement to do any of the terms of any outstanding equity-based awards foregoing, other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary and usual course of business and consistent with past practice that does and in a manner which will not materially increase adversely impact the cost ability of such Company Plan or benefits provided under such Company Plan based on either of the cost on counsel listed in Section 7.2(e) to render the date hereofopinion described in Section 7.2(e) at the expected Merger Effective Date, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (Eiii) take any action to accelerate the vesting vesting, payment or payment funding of (A) any compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company current or former Service Provider under any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (GB) forgive any loans to directorsstock option, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants restricted stock, restricted stock unit or other rights to acquire any Indebtednessequity-related award, in each case, except (Ax) if such accelerated vesting, payment or funding is a result of a termination of employment or service without cause upon or following the consummation of the transactions contemplated by this Agreement or (y) in the ordinary and usual course of business and consistent with past practice and in a principal amount manner which will not to exceed $400,000,000 in adversely impact the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date ability of either of the Contract evidencing such Indebtednesscounsel listed in Section 7.2(e) to render the opinion described in Section 7.2(e) at the expected Merger Effective Date, or (Biv) grant any stock option, restricted stock, restricted stock unit, performance stock unit or other equity-based award;
(e) neither it nor any of its Subsidiaries shall establish, adopt, enter into, materially amend or terminate any Labor Agreement;
(f) except with respect to the Bridge FacilityIntellectual Property, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or neither it nor any of its Subsidiaries with respect to such Indebtedness shall lease, license, transfer, exchange or swap, mortgage (and Parent and including securitizations), pledge, abandon or otherwise dispose of (whether by way of merger, consolidation, sale of stock or assets, or otherwise) any material portion of its assets, including the capital stock or other equity interests of its Subsidiaries, including, following except for (i) dispositions of assets (including the Distribution, amount of indebtedness assigned in such dispositions) that individually or in the Retained Subsidiaries, shall not aggregate with all other such dispositions have any obligations in respect thereof)fair market value of less than $50,000,000, (Gii) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, transactions between it and any refinancings of its direct or replacements indirect Subsidiaries or transactions between such Subsidiaries or (iii) the sale of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement goods in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary usual course of business consistent with past practice;
(vg) with respect to the Retained Businessneither it nor any of its Subsidiaries shall, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) except in the ordinary and usual course of business and consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017practices, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfersell, lease, license, selltransfer, assignexchange or swap, let lapsemortgage (including securitizations) pledge, abandon, cancel, mortgage, pledge, place a Lien upon allow to lapse or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Material Intellectual Property where the aggregate payments under owned by such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course party or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viiih) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, neither it nor any shares of its capital stock Subsidiaries shall acquire or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case agree to acquire any business, (whether by merger, consolidation, purchase of property or otherwise) any Person, division or assets, licenses except for acquisitions (x) entered into on an arm’s length basis, (y) the expected gross expenditures and commitments (including the amount of any indebtedness assumed) of which do not exceed $50,000,000 individually or otherwise in the aggregate with all other such acquisitions and (valuing z) which are not reasonably likely, individually or in the aggregate, to prevent or materially delay the satisfaction of the conditions set forth in Section 6.1(d);
(i) except for litigation or arbitration addressed in Section 5.7, neither it nor any of its Subsidiaries shall settle or compromise, or offer to settle or compromise (other than any litigation or arbitration brought by FMCTI against Technip or brought by Technip against FMCTI arising out of or relating to this Agreement) any litigation or arbitration if such settlement or compromise (x) would involve individually the payment of money by such party or its Subsidiaries in excess of $10,000,000 or together with all such other settlements or compromises the payment of money by such party or its Subsidiaries in excess of $20,000,000 or (y) would involve any admission of material wrongdoing or include any other material non-cash consideration at monetary remedy, including any material conduct requirement or restriction by such party or its fair market value as Subsidiaries, except, in the case of each clause (x) and clause (y), in the ordinary and usual course of business consistent with past practice;
(j) neither it nor any of its Subsidiaries shall (x) renew, amend in any material respect or terminate any of its Material Contracts, (y) waive, release or assign any material rights or claims thereunder or (z) enter into or subsequently amend in any material respect any Contract that, if existing on the date of the agreement for such acquisitionMOU, would be a Material Contract, except, in each case, as permitted pursuant to Section 5.1(c)(ii) or Section 5.1(d) and, in the case of clause (x); provided that , in the ordinary and usual course of business consistent with past practice;
(k) neither the Company it nor any of its Retained Subsidiaries shall make or change any material Tax election, adopt or change any material method of Tax accounting, file any material amended Tax Return or enter into a closing agreement or advance pricing agreement in respect of a material amount of Taxes or settle or compromise any material audit, assessment, notice, Tax claim or proceeding relating to Taxes, or agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes (except in the ordinary course of business), or enter into any closing agreement within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. law) with respect to a material amount of Taxes, surrender any material right to claim a refund or offset of any Taxes, or change the classification of FMCTI or Technip, as applicable, or any of their Subsidiaries for United States Tax purposes, except, in each case, to the extent otherwise required by Law, required as part of the completion of the Preliminary Transactions or in the ordinary and usual course of business consistent with past practice;
(l) neither it nor any of its Subsidiaries shall make a request for a Tax ruling (other than the French Tax Ruling or any additional ruling request from the French Ministry of Budget having the purpose of obtaining the Technip Intended French Tax Treatment and the transfer to Topco of French Tax losses of the Technip Tax consolidated group, any confirmation requested from Her Majesty’s Revenue and Customs (“HMRC”) as referred to in Section 5.9 or Section 5.11, any additional ruling request from any other Governmental Entity the parties agree is desirable as part of the consummation of the Preliminary Transactions or except as otherwise provided in this Agreement or any schedule to this Agreement);
(m) neither it nor any of its Subsidiaries shall permit any change in its financial accounting principles, policies or practices, except to the extent that any such changes in financial accounting principles, policies or practices shall be required by changes in GAAP or SEC rules and regulations or Regulation S-X of the Exchange Act and, in each case, authoritative interpretations thereof (in the case of FMCTI) or IFRS and authoritative interpretations thereof (in the case of Technip);
(n) neither it nor any of its Subsidiaries shall enter into any such transaction Contract that wouldgrants “most favored nation” status to any counterparty or any “non-compete” or similar Contract that, in any case, would (or would purport to) materially restrict the business of the Topco Group following the FMCTI Effective Time with respect to engaging or competing in any line of business or in any geographic area;
(o) neither it nor any of its Subsidiaries shall make any loans, advances or capital contributions to, or investments in, any other Person (other than any wholly owned Subsidiary), other than (x) any routine travel, relocation and business advances to employees of it or its Subsidiaries and (y) trade credit to customers, in either case, made in the ordinary and usual course of business consistent with past practice;
(p) neither it nor any of its Subsidiaries shall enter into any material new line of business outside of its existing business segments;
(q) it shall not convene any regular or special meeting (or any adjournment or postponement thereof) of its stockholders other than a (i) stockholder meeting to adopt this Agreement, including the FMCTI Stockholders’ Meeting and the Technip Stockholders’ Meetings, and approve the Mergers and (ii) a regular annual meeting to address matters arising in the ordinary course consistent with past practice other than this Agreement and the Mergers;
(r) neither it nor any of its Subsidiaries shall implement or announce any material plant closing, material reduction in labor force or other material layoff of employees or service providers other than routine employee terminations for cause or following performance reviews in the ordinary and usual course of business and consistent with past practice;
(s) neither it nor any of its Subsidiaries shall enter into, renew, amend or terminate any Contract that, if existing on the date of the MOU, would reasonably need to be expected todisclosed on Section 4.21 of the FMCTI Disclosure Letter or Technip Disclosure Letter, preventas applicable; and
(t) neither it nor any of its Subsidiaries shall authorize or enter into an agreement, materially delay arrangement or materially impair understanding to do any of the foregoing set forth in Section 5.1(a) through (s) if FMCTI or Technip, as applicable, would be prohibited by the terms of Section 5.1(a) through (s) from doing the foregoing. Nothing contained in this Agreement shall give (x) Technip, directly or indirectly, the right to control or direct the operations of FMCTI or Topco, or (y) FMCTI or Topco, directly or indirectly, the right to control or direct the operations of Technip, prior to consummation of the Transactions;
Technip Merger and FMCTI Merger, respectively. Prior thereto, each of Technip and its Subsidiaries, on the one hand, and FMCTI and its Subsidiaries (x) including Topco), on the other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinhand, sh
Appears in 2 contracts
Sources: Business Combination Agreement (FMC Technologies Inc), Business Combination Agreement (FMC Technologies Inc)
Interim Operations. (a) The Company covenants From the date hereof and agrees as to itself until the earliest of the Acceleration Time and its Subsidiaries that, from and after the execution termination of this Agreement and prior Agreement, except (w) as set forth in Section 7.1(a) of the Company Disclosure Letter, (x) as otherwise expressly contemplated or expressly permitted or required by this Agreement, (y) to the First Effective Time extent consented to in writing by Parent (unless Parent shall otherwise approve in writing, which approval consent shall not be unreasonably withheld, conditioned delayed or delayed, and except conditioned) or (z) as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use cause the business of it and its reasonable best efforts Subsidiaries to conduct the Retained Business be conducted in the ordinary course of business consistent with past practicecourse, and the Company shallshall use reasonable best efforts to, and shall cause each of its Subsidiaries to use reasonable best efforts to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization its business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting associates. Notwithstanding the generality of, and in furtherance of, of the foregoing, and subject to the Company covenants exceptions set forth in clauses (w), (x), (y) and agrees as to itself and its Subsidiaries that(z) of the immediately preceding sentence, the Company, from and after the date of this Agreement through earlier of the Acceleration Time and prior to the First Effective Time (unless Parent termination of this Agreement, shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayednot, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of cause its Subsidiaries not to:
(i) except with respect to SpinCo and amend the SpinCo certificate of incorporation, bylaws or comparable governing documents of the Company or any of its Subsidiaries;
(ii) issue, sell, pledge, dispose of, grant, transfer or otherwise encumber any shares of capital stock, voting securities, partnership interest, membership interest or similar interest or any option, warrant, right or security convertible, exchangeable or exercisable therefor or other instrument or right the value of which is based on any of the foregoing of the Company or any of its Subsidiaries (including any Company Equity Awards) (collectively, “Equity Interests”), other than in the case of clause (A)), (A) amend its certificate issuance of incorporation or bylaws (or comparable governing documents) (other than amendments Shares pursuant to the governing documents of any Subsidiary of Company Stock Options outstanding on date hereof under the Company that would not prevent, delay or impair Plans in accordance with the Initial Merger or the other Transactions)terms thereof, (B) issuances of Shares in connection with the matching of contributions under the (1) Dynegy Midwest Generation, Inc. 401(k) Savings Plan for Employees Covered under a Collective Bargaining Agreement (As Amended and Restated Effective January 1, 2009); (2) Dynegy Midwest Generation, Inc. 401(k) Savings Plan (As Amended and Restated Effective January 1, 2009); (3) Dynegy Inc. 401(k) Savings Plan (As Amended and Restated Effective January 1, 2009); and (4) Dynegy Northeast Generation, Inc. Savings Incentive Plan (As Amended and Restated Effective January 1, 2009), in each case in accordance with the terms thereof, (C) the issuance of the Top-Up Option Shares pursuant to the Top-Up Option and (D) issuances of Equity Interests in accordance with the Rights Agreement;
(iii) split, combine, subdivide or reclassify any of its outstanding shares of capital stock Equity Interests;
(except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Civ) declare, set aside aside, establish a record date for, or pay any dividend dividends on or distribution make any other distributions (whether payable in cash, stock stock, property or property (or any a combination thereof) in respect of any shares of its capital stock (except for (1) Equity Interests, other than any dividends or distributions paid by a direct or indirect (A) from any wholly owned Subsidiary of the Company to the Company or to another direct or indirect wholly owned such Subsidiary of the Company and (B) any dividends or to distributions issued in accordance with the Company or Rights Agreement;
(2v) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock Equity Interests, except for (A) mandatory sinking fund obligations existing on the date hereof and disclosed in Section 7.1(a)(v) of the Company Disclosure Letter, (B) redemptions, purchases or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) acquisitions pursuant to the forfeiture ofexercise or settlement of Company Stock Options, or withholding employee severance, retention, termination, change of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice control and with other contractual rights existing on the date of this Agreement on the terms of the Company Stock Plans as in effect on the date of this Agreement Agreement, including with respect to Company Restricted Stock and (C) acquisition or as modified after the date exchange of this Agreement Rights in accordance with Rights Agreement;
(vi) incur, issue, or modify in any material respect the terms of, any Indebtedness, or assume, prepay, defease, cancel, acquire, guarantee or endorse, or otherwise become responsible for (whether directly or indirectly, contingently or otherwise), the Indebtedness of this Agreementany Person, except for (A) advances of credit incurred under the Company’s existing credit facilities in an aggregate amount not to exceed $2,500,000, (B) letters of credit issued under the Credit Agreement (x) in the ordinary course of business consistent with past practices for non-trading activities but in any event in an aggregate amount not to exceed $25,000,000 or (2y) purchasesin connection with the sale or purchase of Derivative Products, repurchasesphysical electricity products, redemptions or other acquisitions fuel commodities for the Company’s assets in the ordinary course of securities business consistent with past practices, (C) letters of credit issued under the Credit Agreement to support positions in place as of the date hereof, or (D) Indebtedness owed by any wholly owned Subsidiary of the Company by to the Company or any other wholly owned Subsidiary of the Company);
(iivii) merge grant or consolidate incur any Lien, other than (A) Permitted Liens, (B) Liens for current Taxes, assessments or other charges of a Governmental Entity not yet due and payable or which is being contested in good faith through appropriate proceedings, (C) pledges or deposits by the Company or any of its Subsidiaries in the ordinary course of business under workmen’s compensation Laws, unemployment insurance Laws or similar legislation, (D) good faith deposits in connection with any other Person, or restructure, reorganize or completely or partially liquidate Contracts (other than transactions for the payment of the type contemplated by Section 5.01(b)(viiIndebtedness) or Section 5.01(b)(ixleases to which the Company or one of its Subsidiaries is a party, in each case, in the ordinary course of business consistent with past practice, (E) which are not restricted thereby and other than mergers deposits to secure public or consolidations of a Subsidiary statutory obligations of the Company in or one of its Subsidiaries, or to secure surety or appeal bonds to which such Subsidiary entity is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers amonga party, or deposits as security for contested Taxes, in each case incurred or made in the restructuringordinary course of business consistent with past practice, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iiiF) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan licenses granted to third parties in the ordinary course of business consistent with past practice that does not materially increase by the cost Company or its Subsidiaries, (G) Liens required under the outstanding Indebtedness of such the Company Plan or benefits provided under such Company Plan based on the cost on and its Subsidiaries as of the date hereof, (BH) Liens granted in connection with any Indebtedness permitted under Section 7.1(a)(vi), and (I) Liens granted or incurred in connection with the sale or purchase of Derivative Products, physical electricity products, or fuel commodities for the Company’s assets in the ordinary course of business consistent with past practices or to support positions in place as of the date of this Agreement;
(viii) (A) except (1) to the extent required by applicable Law or (2) to the extent required by written agreements existing on the date of this Agreement, grant or provide announce any transaction stock option, equity or retention incentive awards or increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any directorof the employees, officerofficers, employee directors or other service provider independent contractors who provide services in an individual capacity of the Company or any of its Subsidiaries, (CB) increase except to the compensationextent required by written agreements existing on the date of this Agreement, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or pensionother employee benefit not required by any existing Company Plan to any employee, welfare officer, director or other benefits of any director, officer or employee independent contractor who provide services in an individual capacity of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with whether past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationpresent, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of any right to compensation or benefits under any Company Plan (including any equity-based awards)benefits, (FC) except to the extent required by written agreements existing on the date of this Agreement, enter into or amend any Contracts of employment or any consulting, bonus, severance, retention, retirement or similar agreement, (D) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (GE) change the accrual rate for the Company’s short-term incentive plans used to prepare the Company’s financial statements, (F) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries, or (G) except as required to ensure that any Company Plan is not then out of compliance with applicable Law, enter into or adopt any new or renew, amend or terminate any existing Company Plan or benefit arrangement if such adoption, renewal, amendment or termination would result in a material cost to the Company or any of its Subsidiaries;
(ivix) incur hire any Indebtedness employee or issue individual independent contractor with total expected annual base salary, including commissions, in excess of $100,000, other than to fill vacancies arising in the ordinary course of business at annual base salary levels not in excess of 120% of prevailing market rates, or, without consulting with Parent in advance, terminating any warrants such employee or independent contractor;
(x) other rights to acquire any Indebtednessthan in the ordinary course of business and consistent with past practice, except (A) make or change any material Tax election, or change the Company’s or such Subsidiary of the Company’s method of accounting for Tax purposes, (B) file any amended Tax Return involving a material amount of additional Taxes, (C) settle or compromise any material Tax liability, or any claim for a material refund of Taxes or enter into any closing agreement with respect to any material amount of Tax, or (D) agree to an extension or waiver of the statute of limitations applicable to the assessment or collection of any material Taxes except, in each case, as required by applicable Law;
(xi) except as required by GAAP, the SEC or applicable Law, change any material accounting policies or principles;
(xii) except in the ordinary course of business (A) enter into or assume any Contract that would have been a Company Material Contract had it been entered into prior to the date hereof, (B) terminate, materially amend or waive any material rights under any Company Material Contract or any Contract that would have been a Company Material Contract had it been entered into prior to the date hereof excluding any termination upon expiration of a term in accordance with the terms of such Company Material Contract or (C) or waive any material default under, or release, settle or compromise any material claim against the Company or liability or obligation owing to the Company under any Company Material Contract; provided in each case that the Company or any of its Subsidiaries shall be permitted to renew or replace any Company Material Contract with one or more Contracts on substantially similar terms;
(xiii) subject to Section 7.16, waive, release, settle or compromise any pending or threatened action, litigation, claim or arbitration or other proceedings before a Governmental Entity if such waiver, release, settlement or compromise by the Company or any of its Subsidiaries (A) is for an amount in excess of $2,500,000 individually or $5,000,000 in the aggregate, or (B) would entail the incurrence of (1) any obligation or liability of the Company in excess of such amount, including costs or revenue reductions or (2) obligations that would impose any material restrictions on the business or operations of the Company or its Subsidiaries;
(xiv) acquire (including by merger, consolidation, or acquisition of stock or assets) any interest in any Person or any division thereof or any assets thereof, excluding acquisitions of supplies, parts, fuel, materials and other inventory in the ordinary course of business consistent with past practice practice, or make any loan, advance or capital contribution to, or investment in, any Person or any division thereof, other than (A) any such acquisitions, loans, advances, contributions or investments that are for consideration not in a principal amount not to exceed excess of $400,000,000 in the aggregate at any time outstanding on prevailing market terms 1,000,000 individually or on terms substantially consistent with or more beneficial to $5,000,000 for all such transactions by the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after Subsidiaries in the date of the Contract evidencing such Indebtedness, aggregate or (B) except with respect loans, advances or capital contributions to or among the Bridge FacilityCompany and wholly owned Subsidiaries of the Company;
(xv) sell, in replacement oftransfer, lease, license, assign, allow to lapse or otherwise dispose of (including, by merger, consolidation, or to refinancesale of stock or assets) any entity, existing Indebtedness on then prevailing market terms business, assets, rights or on terms substantially consistent with properties of the Company or more beneficial to any of its Subsidiaries having a current value in excess of $1,000,000 individually, or $5,000,000 for all such transactions by the Company and its SubsidiariesSubsidiaries in the aggregate other than (A) sales, taken as a wholetransfers, than the Indebtedness being replaced leases, licenses assignments and other dispositions of inventory, electricity or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security other commodities or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into Derivative Products in the ordinary course of business consistent with past practice, (EB) commercial paper issued in the ordinary course dispositions of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all obsolete or any portion of the Dividend (and fees and expenses in connection therewith) worthless assets or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement properties in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that (C) transactions solely among the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness and/or any of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(vxvi) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties authorize or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures expenditure, other than (A) in connection with any capital expenditures contemplated by the repair or replacement of facilitiesCompany’s current business plan, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) capital expenditures that are not, in the ordinary course aggregate, in excess of $5,000,000 above the capital expenditures provided for in such business plan or (C) capital expenditures required by Law or in response to a casualty loss or property damage;
(xvii) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(xviii) merge or consolidate the Company or any of its Subsidiaries with and into any other Person;
(xix) enter into, with respect or related to Dynegy ▇▇▇▇ Landing, LLC, Dynegy Morro Bay, LLC, Dynegy Oakland, LLC and Casco Bay Energy Company, LLC, any Contracts with a term extending beyond December 31, 2013;
(xx) fail to maintain in full force and effect material insurance policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of unless the Company Disclosure Letterdetermines in its reasonable commercial judgment that the form or amount of such insurance should be modified;
(vixxi) with respect permit any letters of credit to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (be issued other than transactions among letters of credit issued under the Company Credit Agreement by JPMorgan Chase Bank, N.A., Citibank, N.A, Credit Suisse, Cayman Islands Branch and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation AgreementsABN AMRO BANK N.V.;
(viixxii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x)7.2, spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in take any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or action which would reasonably be expected toto result in any of the Tender Offer Conditions or the conditions to the Merger set forth in Article VIII not being satisfied or delaying the satisfaction of any such conditions, or that would reasonably be expected to prevent, materially delay, impair or interfere with the ability of Parent to consummate the Offer or of Parent, Merger Sub or the Company to consummate the Merger; or
(xxiii) commit, authorize or agree to take any of the foregoing actions or enter into any letter of intent (binding or non binding) or similar agreement or arrangement with respect to any of the foregoing actions.
(b) Neither Parent nor Merger Sub shall take or permit any of their Affiliates to take any action that is reasonably likely to prevent or delay or materially impair the consummation of the Transactions;Offer or the Merger. Prior to making any written communications to the officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are directly affected by the transactions contemplated by this Agreement, the Company shall, to the extent legally permissible, provide Parent with a copy of the intended communication, Parent shall review and comment on the communication promptly (but in any event, Parent shall provide any comments it may have within forty-eight (48) hours after such communication has been provided to Parent for review), and the Company shall consider in good faith any comments reasonably proposed by Parent.
(xc) other than capital expenditures made Nothing contained in accordance with Section 5.01(b)(v) this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the earlier of the Offer Closing and other than purchases the Effective Time, and licenses of film and television and production programming (includinnothing contained in this
Appears in 2 contracts
Sources: Merger Agreement (Icahn Enterprises L.P.), Merger Agreement (Dynegy Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and except as (1otherwise expressly required by this Agreement) and except as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, and shall cause its Subsidiaries to, conduct the business of it and its Subsidiaries in all material respects in the ordinary course of business consistent with past practice and it shall, and shall cause each of its Subsidiaries to, use its respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practiceorganizations intact, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact maintain their Licenses and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of hereof until the Effective Time, except (A) as otherwise expressly required by this Agreement and prior to the First Effective Time Agreement, (unless B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and which determination shall take into account the Company Overview Presentation, and except (C) as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Laws or (3D) otherwise expressly disclosed as set forth in Section 5.01(b7.1(a) of the Company Disclosure Letter), the Company shall not do any of the following and shall not permit any cause each of its Subsidiaries tonot to do any of the following:
(i) adopt or propose to its shareholders any change in its articles of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company or restructure, reorganize or completely or partially liquidate;
(iii) acquire (by purchase, merger, joint venture, partnership, consolidation, dissolution, liquidation, tender offer, exchange offer, recapitalization, reorganization, share exchange, business combination or similar transaction) any business or material amount of assets outside of the ordinary course of business consistent with respect past practice from any other Person, other than (A) acquisitions pursuant to SpinCo Contracts in effect as of the date hereof and set forth in Section 7.1(a)(iii) of the SpinCo Company Disclosure Letter and (B) any such acquisition (x) that, individually or in the aggregate, would not reasonably be expected to prevent, delay, impede or otherwise adversely affect the consummation of the Transactions and (y) pursuant to which the total value or purchase price paid or payable by the Company and its Subsidiaries would not exceed $10,000,000 individually or in the aggregate;
(iv) issue, deliver, sell, pledge, dispose of, grant, transfer, or subject to any Lien or authorize the issuance, delivery, sale, pledge, disposition, grant, transfer or the subjection to any Lien any shares of capital stock of the Company or any of its Subsidiaries (other than in the case issuance of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any shares by a wholly owned Subsidiary of the Company that would not preventto the Company or another wholly owned Subsidiary of the Company), delay or impair securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, stock appreciation rights, warrants, restricted stock units, restricted stock, “phantom” stock, “phantom” stock rights, stock-based performance units or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, except for the Initial Merger issuance of Shares in respect of the exercise of Company Options or the vesting or settlement of Company RSUs or Company Restricted Stock, in each case, outstanding as of the date of this Agreement in accordance with their terms and the applicable Stock Plan as in effect on the date of this Agreement, or as may be granted in accordance with, or otherwise in compliance with, the terms of this Agreement;
(v) make any loans or advances to, or any capital contributions to or investments in, any Person, other Transactions), than (A) solely between or among the Company and/or one or more direct or indirect wholly owned Subsidiaries of the Company in immaterial amounts or made in the ordinary course of business consistent with past practice or (B) split, combine, subdivide or reclassify its outstanding shares advances in immaterial amounts made in the ordinary course of capital stock (except for any such transaction by a wholly owned subsidiary business consistent with past practice to employees of the Company which remains a wholly owned Subsidiary after consummation and its Subsidiaries for reimbursement of such transaction), routine travel or immaterial business expenses and in accordance with the terms of the applicable policy in effect on the date of this Agreement;
(Cvi) (A) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another the Company or to any other direct or indirect wholly owned Subsidiary of the Company, in each case in the ordinary course of business consistent with past practice), provided, that the Company may make, declare and pay one regular quarterly cash dividend in each quarter of the year ending December 31, 2015 in an amount per share not to exceed $0.1033 per quarter and with a record date consistent with the record date for each quarterly period of the year ended December 31, 2014, if the Company provides Parent with written notice of each record date it will select at least twenty (20) business days prior to the declaration date in respect of such applicable record date, (B) purchase, redeem or otherwise acquire any shares of capital stock or other securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other securities or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other securities, except for (i) any issuance or authorization or proposal to issue or authorize any securities of a wholly owned Subsidiary of the Company to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) another wholly owned Subsidiary of the Company Disclosure Letterin the ordinary course of business consistent with past practice, (ii) any split, combination or reclassification of capital stock of any wholly owned Subsidiary of the Company, or (iii) purchases, redemptions or other acquisitions of capital stock or other securities (x) in respect of the exercise of Company Options or for withholding of Shares to satisfy Tax withholding obligations in respect of the exercise, vesting or settlement of Company Options, Company RSUs and Company Restricted Stock, in each case, outstanding as of the date of this Agreement in accordance with their terms and the applicable Stock Plan as in effect on the date of this Agreement or (y) required by the terms of any plans, arrangements or Contracts existing on the date of this Agreement (or entered into after the date of this Agreement in accordance with this Section 7.1) between the Company or any of its Subsidiaries and any director or employee of the Company or any of its Subsidiaries (to the extent complete and accurate copies of such plans, arrangements or Contracts have been delivered to Parent prior to the date of this Agreement), or (DC) enter into any agreement with respect to the voting of its capital stock;
(vii) incur any indebtedness for borrowed money or assume, guarantee, endorse or otherwise become responsible for any indebtedness of another Person, or (E) purchase, repurchase, redeem issue or otherwise sell any debt securities or warrants or other rights to acquire any shares debt security of the Company or any of its capital stock Subsidiaries, enter into any “keep well” or other Contract to maintain any securities convertible financial statement condition of another person or exchangeable enter into or exercisable for any shares arrangement having the economic effect of its capital stock (any of the foregoing, other than (1) pursuant to solely between or among the forfeiture ofCompany and/or one or more direct or indirect wholly owned Subsidiaries of the Company in immaterial amounts or in the ordinary course of business consistent with past practice; provided that the Company and its Subsidiaries may incur indebtedness for borrowed money, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units issue or Company Performance Stock Unitssell debt securities, in each case in accordance the ordinary course of business consistent with past practice and practice, in an amount up to $25,000,000 at any given time; provided further, that all such borrowings pursuant to the preceding proviso shall be repaid within 30 days of the borrowing date (on a rolling basis with respect to each portion of such borrowings);
(viii) except as set forth in the terms capital budgets set forth in Section 7.1(a)(viii) of the Company Stock Plans as Disclosure Letter and consistent therewith, make or authorize any payment of, or accrual or commitment for, any capital expenditure in effect excess of $10,000,000 in the aggregate;
(ix) make any changes with respect to accounting policies or procedures (other than those required by changes in GAAP or applicable Law or, if applicable with respect to foreign Subsidiaries of the Company, the applicable foreign generally accepted accounting principles);
(x) settle or compromise, or offer or propose to settle or compromise, any threatened or pending actions, suits, claims, hearings, arbitrations, litigations, investigations or other proceedings before a Governmental Entity (each, a “Proceeding”) or other obligation or liability except in accordance with the parameters set forth on Section 7.1(a)(x) of the Company Disclosure Letter; provided that no such settlement or compromise, or offer in respect thereof, may involve any injunctive or other non-monetary relief which, in either case, imposes restrictions on the business operations of the Company and its Subsidiaries (or would impose restrictions on the business operations of the Parent and its Subsidiaries, including, for the avoidance of doubt, the Company and its Subsidiaries, after the Closing);
(xi) enter into any Contract that (A) would have been a Material Contract had it been entered into prior to the date of this Agreement (other than any Contract that would constitute a Material Contract solely pursuant to clauses (i), (iv) (only with respect to Material Contracts that are letters of credit or surety bonds in the ordinary course of business consistent with past practice, and as modified after expressly permitted pursuant to Section 7.1(a)(vii)), (vii), subclause (C) of clause (viii) (with respect to wholly owned Subsidiaries only), clause (xii) (with respect to such Material Contracts for which the date Company or its Subsidiaries are a beneficiary, to the extent otherwise compliant with Section 7.2) of this Agreement Section 5.13(a) and teaming agreements entered into in the ordinary course of business consistent with past practice), in each case except, for the avoidance of doubt, Government Contracts and Direct Charge Contracts, or (B) contains a change of control or similar provision that would require a material payment to the other party or parties thereto in connection with the Transactions;
(xii) amend, modify or terminate any Material Contract (other than any Contract that would constitute a Material Contract solely pursuant to clauses (i), (iv) (only with respect to Material Contracts that are letters of credit or surety bonds in the ordinary course of business consistent with past practice, and as expressly permitted pursuant to Section 7.1(a)(vii)), (vii), subclause (C) of clause (viii) (with respect to wholly owned Subsidiaries only), clause (xii) (with respect to such Material Contracts for which the Company or its Subsidiaries are a beneficiary, to the extent otherwise compliant with Section 7.2) of Section 5.13(a) and teaming agreements entered into in the ordinary course of business consistent with past practice), or cancel, release, waive or modify any material debts or waive, release, cancel, transfer, assign or pledge any material claims or rights held by it thereunder, in each case except in the ordinary course of business consistent with past practice, and except for terminations caused by expirations of Material Contracts in accordance with the terms their terms;
(xiii) except as required by Law, (A) make, change, or rescind any material Tax election, except for any Protective 2014 Distribution Election; (B) file any material amended Tax Return of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of its Subsidiaries; (C) adopt or change any material method or period of Tax accounting; (D) settle or compromise any material claim relating to Taxes; (E) voluntarily surrender any claim for a refund of material Taxes; (F) enter into any closing agreement relating to Taxes; (G) file any material Tax Return that is inconsistent with past practice; or (H) consent to any extension or waiver of the Companylimitation period applicable to any Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business consistent with past practice);
(iixiv) merge or consolidate with take any other Person, or restructure, reorganize or completely or partially liquidate action that would reasonably be expected (other than transactions A) to cause any of the type contemplated by Applicable Distributions not to qualify as transactions under Section 5.01(b)(vii368(a)(1)(D) of the Code or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary 355 of the Company Code or (B) to cause any stock or securities distributed in which such Subsidiary is the surviving entity in connection with an acquisition Applicable Distributions not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries to be treated as “qualified property” for purposes of Section 361(c)(2) of the Company that would not prevent, materially delay or materially impair the Transactions)Code;
(iiixv) except as expressly required by any Company Plan as in effect on the date hereof: (A) establishtransfer, adoptsell, amend lease, assign, license, mortgage, subject to Liens, pledge, surrender, encumber, divest, cancel, abandon or terminate any material Company Plan allow to lapse or amend the terms expire or otherwise dispose of any outstanding equity-based awards other than or any such action taken for purposes part of replacingits assets (including material Intellectual Property), renewing licenses, operations, rights, product lines, businesses or extending a broadly applicable material Company Plan interests therein, in each case except (x) in the ordinary course of business consistent with past practice that does not materially increase and (y) for transactions involving a de minimis amount of assets in the cost aggregate;
(xvi) except to the extent required pursuant to the terms of such Company any Benefit Plan or benefits provided under Material Contract (or any “rabbi trusts” relating to any such Company Plan based on the cost on Benefit Plans) in effect as of the date hereofof this Agreement, or as otherwise required by applicable Law, (BA) grant or provide any transaction severance, termination, change in control or retention bonuses payments or benefits to any present or former director, officer, or employee or other service provider of the Company or any of its Subsidiaries, (CB) increase in any manner the compensation, bonus or pension, welfare welfare, severance, termination pay, change in control, retention or other benefits of to any current or former director, officer officer, or employee of the Company or any of its Subsidiaries, except for any increase to employees below Band A or Band B that are not material individually or in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeaggregate, (DC) increase the severance or termination payments or benefits payable pay any bonus to any current or former director, officer, or employee or other service provider of the Company or any of its Subsidiaries, (D) grant any equity, equity-based or long-term incentive awards under any Benefit Plan or any arrangement that would have been a Benefit Plan had it been in effect as of the date of this Agreement, (E) become a party to, establish, adopt, commence participation in, amend or terminate any material compensation, employment, equity compensation, severance, termination, change in control, pension, retirement, profit-sharing, deferred compensation, incentive, welfare benefit, or other employee benefit plan or agreement with or for the benefit of any current or former directors, officers, or employees of the Company or its Subsidiaries (or newly hired employees), other than amendments that are necessary to avoid adverse tax consequences that do not increase materially costs to the Company, (F) amend or modify the terms of any outstanding equity-based or long-term incentive awards, (G) take any action to amend, waive or accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are award made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire the extent such actions are material individually or in the aggregate, (H) take any businessaction to accelerate the payment, whether by mergeror, consolidation, purchase in the case of property severance or assets, licenses similar benefits or otherwise (valuing any non-cash consideration at its fair market value as deferred compensation not provided under a plan that is qualified under Section 401(a) of the date Code, to fund or in any other way secure the payment of the agreement for such acquisition); provided that neither the Company nor severance or similar benefits or deferred compensation under any of its Retained Subsidiaries shall Benefit Plan, (I) establish, adopt, enter into or amend in any such transaction that wouldmaterial respect any collective bargaining agreement or other agreement with a labor union, works council or would reasonably be expected tosimilar organization, prevent, materially delay or materially impair the consummation of the Transactions;
(xJ) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinchange any
Appears in 2 contracts
Sources: Merger Agreement (Harris Corp /De/), Merger Agreement (Exelis Inc.)
Interim Operations. (a) The Company Debtor covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time Closing, except (unless i) as otherwise expressly required or contemplated by this Agreement, (ii) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and except (iii) as (1) otherwise required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) Laws or (3iv) otherwise expressly disclosed as set forth in Section 5.01(a) 4.1 of the Company Debtor Disclosure Letter), the Company shall, and Business shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business be conducted in the ordinary and usual course of business consistent with past practiceand, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to consistent therewith, the Retained Business, subject to compliance with the specific matters set forth below, Debtor and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization intact their business organizations intact, preserve governmental licenses, permits, consents, approvals, authorizations and qualifications and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providersassociates, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Closing, except (unless i) as otherwise expressly required or contemplated by this Agreement, (ii) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed), and which determination shall take into account the Company Overview Presentation, and except (iii) as (1) otherwise required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Laws or (3iv) otherwise expressly disclosed as set forth in Section 5.01(b) 4.1 of the Company Debtor Disclosure Letter), the Company shall Debtor will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions by-laws or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)applicable governing instruments;
(ii) merge or consolidate the Debtor or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate the Debtor or any of its Subsidiaries or otherwise enter into any agreements providing for the sale of their respective material assets, operations or business (other than transactions the sale or disposition of obsolete or worn-out assets in the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations ordinary course of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactionsbusiness);
(iii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $1,000,000 in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement which have been provided to Parent prior to the date of this Agreement;
(iv) acquire any corporation, partnership or other business organization or division thereof or collection of assets constituting all or substantially all of a business or business unit, whether by merger or consolidation, purchase of substantial assets or equity interest or any other manner, from any other Person;
(v) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of capital stock of the Debtor or any of its Subsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Debtor to the Debtor or another wholly-owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(vi) create or incur any Lien securing indebtedness for borrowed money (other than a Lien currently provided for under the Centerbridge Facility, any Permitted Lien (other than clause (d) of such definition) and/or the grant of any cash collateral in respect of letters of credit issued in respect of, or otherwise securing, ordinary course operating liabilities) on any assets of the Debtor or any of its Subsidiaries having a value in excess of $1,000,000 in the aggregate;
(vii) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Debtor or any direct or indirect wholly-owned Subsidiary of the Debtor);
(viii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except as expressly required for dividends paid by any Company Plan as in effect on direct or indirect wholly-owned Subsidiary to the date hereof: Debtor or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of its capital stock (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than the Restructuring Support Agreement);
(ix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(x) incur any indebtedness for borrowed money (which, for the avoidance of doubt, shall not include obligations in respect of cash-collateralized letters of credit issued in respect of, or other grants of cash collateral securing, ordinary course operating liabilities) or guarantee such action taken indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Debtor or any of its Subsidiaries, except for purposes of replacing, renewing or extending a broadly applicable material Company Plan indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice that does (A) not materially increase to exceed $2,000,000 in the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofaggregate, (B) grant guarantees incurred in compliance with this Section 4.1 by the Debtor of indebtedness of wholly-owned Subsidiaries of the Debtor or provide (C) indebtedness owed to the Debtor or another wholly-owned Subsidiary of the Debtor;
(xi) except as set forth in the capital expenditures budget set forth in Section 4.1(a)(xi) of the Debtor Disclosure Letter, make or authorize any transaction capital expenditure in excess of $2,000,000 in the aggregate, excluding any capital expenditure required by any Contract set forth on Section 4.1(a)(xi) of the Debtor Disclosure Letter or retention bonuses capital expenditure determined in good faith by the Debtor Board to be required for (A) the protection of, or to avoid injury to, any Person, (B) the care or safety of any patient under the care of any facility operated by the Debtor or any of its Subsidiaries or (C) compliance with Law;
(xii) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xiii) make any material changes with respect to material accounting policies or procedures, except as required by changes in applicable Law or GAAP;
(xiv) settle any litigation or other Proceeding brought against the Debtor or its Subsidiaries by a Governmental Entity (A) for an amount in excess of $100,000 individually or $1,000,000 in the aggregate for all such Proceedings (other than any resolution of claims processing for government reimbursement in the ordinary course of business, and excluding recoupment actions) or (B) in a manner that would impose any restrictions on its assets, operations or businesses or result in any injunction or equitable relief against the Debtor or any of its Subsidiaries;
(xv) settle any Proceeding other than against or brought by a Governmental Entity, (A) for an amount in excess of $500,000 individually or $8,000,000 in the aggregate for all such Proceedings in any one-calendar-month period (in each case, with respect to Proceedings in the state of Pennsylvania, net of applicable insurance proceeds) or (B) in a manner that would impose any restrictions on its assets, operations or businesses or result in any injunction or equitable relief against the Debtor or any of its Subsidiaries;
(xvi) amend, modify or terminate any Material Contract, including the Centerbridge Facility, in a manner adverse to the Debtor or its Subsidiaries;
(xvii) (A) change in any material respect any material method of accounting of the Debtor or its Subsidiaries for Tax purposes; (B) enter into any agreement with any Governmental Entity (including a “closing agreement” under Code Section 7121) with respect to any material Tax or Tax Returns of the Debtor or its Subsidiaries; (C) surrender a right of the Debtor or its Subsidiaries to a material Tax refund; (D) change an accounting period of the Debtor or its Subsidiaries with respect to any material Tax; (E) file an amended Tax Return; (F) change or revoke any material election with respect to Taxes; (G) make any material election with respect to Taxes that is inconsistent with past practice; (H) file any Tax Return that is inconsistent with past practice; or (I) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment (other than in the ordinary course of business);
(xviii) transfer, sell, lease, license, mortgage, pledge, divest or otherwise dispose of any material tangible or intangible assets (including Intellectual Property Rights), licenses, operations, rights, product lines, businesses or interests therein of the Debtor or its Subsidiaries, including the capital stock of any of its Subsidiaries, except in connection with services provided in the ordinary course of business and sales or other dispositions of obsolete or worn-out assets and except for sales, leases, licenses, divestitures, cancellations, abandonments, lapses, expirations or other dispositions of assets with a fair market value not in excess of $500,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xix) (A) enter into, adopt, amend in any material respect or terminate any Company Plan (other than entry into any new employment agreement with any individual whose hiring is not restricted by, or who is otherwise hired in accordance with, clause (H) below), (B) increase or accelerate the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any director, officer, officer or employee or other service provider of the Company Debtor or any of its Subsidiaries, (C) increase grant any new awards, or amend or modify the compensation, bonus or pension, welfare or other benefits terms of any directoroutstanding awards, officer under any Company Plan (other than grants of any new awards to any individual whose hiring is not restricted by, or employee of the Company or any of its Subsidiarieswho is otherwise hired in accordance with, except in the ordinary course of business consistent with past practice with respect to clause (1H) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changebelow), (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including any equity-based awards)Plan, (FE) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by the terms of any existing Company Plan set forth on Section 2.1(h)(i) of the Debtor Disclosure Letter or GAAP, (GF) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to directorsany director, officers officer or employees employee of the Company Debtor or any of its Subsidiaries;
, (ivG) incur terminate the employment of any Indebtedness officer of the Debtor or issue its Subsidiaries other than for “cause”, (H) hire (x) any warrants officer of the Debtor or its Subsidiaries with a title of Vice President or higher or (y) any employee of the Debtor or its Subsidiaries with aggregate annual base salary and target bonus of more than $250,000, except, in the case of the foregoing clauses (x) and (y), to the extent jointly determined by the Chief Restructuring Officer of the Debtor (“CRO”) and the Debtor Board in their reasonable business judgment in good faith necessary in the interests of patient care (any such individual described in the foregoing clauses (x) and (y) and hired to replace any such employee, a “New Hire”), provided that (i) any such officer New Hire (and his or her terms and conditions of employment, including any base and target incentive compensation) hired pursuant to this clause (H) shall be reasonably acceptable to Parent and (ii) the terms and conditions of employment of any New Hire that is not an officer, including base and target incentive compensation, shall be subject to notice and consultation with Parent, or (I) make any incentive payment or payment in respect of severance or any nonqualified deferred compensation entitlement to any current or former director, officer or employee of the Debtor or its Subsidiaries (including making any payments to any rabbi trust or taking any action that would cause the trustee of any rabbi trust to make payments to any current or former director, officer or employee of the Debtor or its Subsidiaries), except, with respect to clause (I) payment of any nondiscretionary incentive payments under existing Company Plans, nondiscretionary severance payments under existing Company Plans, and nondiscretionary payments of nonqualified deferred compensation (other rights than as set forth on Section 4.1(a)(xix)(I) of the Debtor Disclosure Letter) or as otherwise required by applicable Law; provided that payment in respect of any severance or nonqualified deferred compensation amount in excess of $200,000 shall be subject to acquire any Indebtednessprior notice and consultation with Parent and, except with respect to clauses (A) through (H) above,
(1) amendments to welfare plans in the ordinary course of business, consistent with past practices that do not materially increase the costs of such welfare plans, (2) with respect to any hourly employees and salaried facility-level employees of the Debtor or its Subsidiaries, and any other employees of the Debtor or its Subsidiaries whose annual base salary does not exceed $150,000, increases in compensation in the ordinary course materially consistent with the Debtor’s 2018 operating budget or otherwise as reasonably determined by the CRO, in consultation with the QCP Consultants, to be necessary to respond to market demand, (3) with respect to each other employee of the Debtor or its Subsidiaries whose annual base salary exceeds $150,000 (other than any Eligible Employee), increases in compensation in the ordinary course of business consistent with past practice in a principal amount that do not to exceed $400,000,000 in 1.5% of the aggregate at annual base salaries of such other employees or 7.5% of the annual base salary for any time outstanding on prevailing market terms individual and (4) as required pursuant to existing Company Plans, or on terms as otherwise required by applicable Law;
(xx) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(xxi) enter into any Contract adversely affecting in any material respect the Debtor’s or any of its Subsidiaries’ ability to use or otherwise exploit any material Intellectual Property Rights;
(xxii) fail to use commercially reasonable efforts to keep in full force the material Insurance Policies under substantially consistent with or more beneficial to the Company same levels of coverage as the current policies of the Debtor and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date ;
(xxiii) change in any material respect any of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, Debtor’s or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced ’ material policies or refinanced, and in each case with a maturity date no more than 10 years after the date procedures for or timing of the Contract evidencing such Indebtednesscollection of accounts receivable (or any other trade receivables), payment of accounts payable (C) intercompany Indebtedness among the Company or any other trade payables), billing of its customers, pricing and its wholly owned Subsidiariespayment terms, (D) (1) to the extent not drawn upon and cash collections, cash payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programsterms with suppliers, in each case issuedcase, made other than changes required by suppliers, vendors and service providers;
(xxiv) dismiss the QCP Consultants other than in accordance with Section 5.1(b);
(xxv) modify or entered into amend in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not any respect any Contract pursuant to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company HCR III or any of its Subsidiaries with respect currently subleases real property to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 other Subsidiary of the Company Disclosure LetterDebtor; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;or
(vxxvi) with respect to the Retained Businessagree, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;foregoing.
(vib) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) Parent shall not restrict (A) ordinary course non-exclusive licenses knowingly take or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of permit any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or take any action that is reasonably likely to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay prevent or materially impair impede the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin.
Appears in 2 contracts
Sources: Plan Sponsor Agreement, Plan Sponsor Agreement (Quality Care Properties, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First earlier to occur of (i) the date on which the designees of Parent and/or Merger Sub on the board of directors of the Company constitute a majority of the members of the Company’s board of directors and (ii) the Effective Time (the earlier of such dates, the “Control Date”) (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, conditioned or delayed, and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2) expressly required by the Transaction Documents (including business of it and its Subsidiaries shall be conducted in connection the ordinary and usual course consistent with past practice and to the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, shall use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributorslandlords, licensors, creditors, lessorslicensees, employees and business associates and others having material business dealings with associates. Notwithstanding the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Control Date, except (unless i) as otherwise contemplated by this Agreement, (ii) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld), conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except (iii) as (1) is required by applicable Law, (2) expressly required Law or by the Transaction Documents (including in connection with the Separation and the Distribution) any Governmental Entity or (3iv) otherwise expressly disclosed as set forth in Section 5.01(b) 7.1 of the Company Disclosure Letter)Schedule, the Company shall will not and shall will not permit any of its Subsidiaries to:
(ia) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation (including by way of any certificates of designation) or bylaws or other applicable governing instruments;
(b) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company;
(c) (acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $500,000 in any transaction or series of related transactions, other than amendments acquisitions pursuant to Contracts in effect as of the governing documents date of any Subsidiary this Agreement, all of which are identified on Section 6.1(q) of the Company that would not preventDisclosure Schedule;
(d) issue, delay sell, dispose of, grant, transfer or impair subject to any Lien, or authorize the Initial Merger issuance, sale, disposition, grant or the other Transactions)transfer of or Lien on, (B) split, combine, subdivide or reclassify its outstanding any shares of capital stock of the Company or any of its Subsidiaries, including, without limitation shares of Series A Junior Participating Preferred Stock (except in each case, other than the issuance or grant of Shares upon the exercise of Company Options that are outstanding as of the date hereof), or securities convertible or exchangeable into or exercisable for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, capital stock or property (other equity interests, or any combination thereof) in respect options, warrants or other rights of any kind to acquire any shares of its such capital stock or such convertible or exchangeable securities;
(except for e) make any loans, advances or capital contributions to or investments in any Person (1) other than the Company or any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company) in excess of $500,000 in the aggregate;
(f) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to another any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of to the Company or to the Company any other direct or (2indirect wholly owned Subsidiary) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock;
(g) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, acquisition of any such capital stock or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units other securities tendered by current or Company Performance Stock Units, former employees or directors in each case in accordance with past practice and connection with the terms exercise of the currently outstanding Company Stock Plans as in effect on the date Options);
(h) incur any indebtedness for borrowed money or guaranty such indebtedness of this Agreement another Person (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other than a wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize issue or completely sell any debt securities or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee warrants or other service provider of the Company or rights to acquire any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee debt security of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensationeach case for indebtedness, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business and consistent with past practice in a principal amount not to exceed $400,000,000 practice, for borrowed money under credit facilities, lines of credit and other debt or borrowing arrangements reflected in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to Financial Statements; provided, however that neither the Company and nor its Subsidiaries, taken as a whole, than Subsidiaries shall draw down on any amounts under its existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) credit facilities except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, necessary to comply with letters of credit, bank guaranteesunder credit facilities, security lines of credit and other debt or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, borrowing arrangements reflected in each case issued, made or entered into the Company’s most recent financial statements included in the Company Reports issued from time to time in the ordinary course of business consistent in an amount not to exceed $1,000,000 in the aggregate outstanding at any given time;
(i) make any material changes with past practicerespect to accounting policies or procedures, except as required by changes in GAAP or Law or by a Governmental Entity;
(Ej) commercial paper issued make, alter or revoke any Tax accounting method or material Tax election, or settle or compromise any Tax liability or otherwise pay or consent to any assessment as the result of an audit, file any amended Tax Return, enter into any closing agreement relating to Taxes, or waive or extend the statute of limitations in respect of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business consistent with past practice in a principal amount not business);
(k) transfer, sell, lease, exclusively license, surrender, divest, cancel, abandon or otherwise dispose of, or subject to exceed $250,000,000 in the aggregate at any time outstandingLien, (F) Indebtednessany assets, the proceeds of which will be used to finance all product lines or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations businesses of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, includingother than inventory, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof supplies and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing other assets in the ordinary course of business consistent with past practice;
(vl) except as expressly contemplated by this Agreement, required pursuant to the Benefit Plans in effect on the date of this Agreement disclosed in Section 6.1(h)(i) of the Company Disclosure Schedule, pursuant to any employment or separation agreement disclosed in Section 6.1(h)(vi) of the Company Disclosure Schedule or any collective bargaining agreement disclosed in Section 6.1(m) of the Company Disclosure Schedule, or as otherwise required by applicable Law, including to comply with Section 409A of the Code, (i) grant or provide any severance or termination payments or benefits to any officers, employee, independent contractor or consultant of the Company or any of its Subsidiaries, (ii) increase (or commit to increase) the compensation, perquisites or benefits payable to any director, officer, employee, independent contractor or consultant of the Company or any of its Subsidiaries, except for increases with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) non-executive employees in the ordinary course of business consistent with past practice and practice, (iii) enter into any new, or amend the terms of any existing, employment agreement or Benefit Plan with any member of management of the Company or any of its Subsidiaries, (iv) grant any equity or equity-based awards that may be settled in Shares or any other equity securities of the Company or any of its Subsidiaries or the value of which is linked directly or indirectly, in whole or in part, to the price or value of any Shares or other equity securities of the Company or any of its Subsidiaries, (vi) accelerate the vesting or payment of compensation payable or benefits provided or to become payable or provided to any current or former director, officer, employee, independent contractor or consultant, (vii) change the terms of any outstanding Company Option, or (viii) terminate or materially amend any existing, or adopt any new, Benefit Plan (other than changes that may be necessary to comply with applicable Law, in each case that do not materially increase the costs of any such Benefit Plans); provided, however, that the manner of any change, amendment or acceleration to comply with Section 409A of the Code must be approved by Parent, which approval shall not be unreasonably withheld or delayed); provided, further, that the Company shall take such actions as shall be necessary to cause any employee hired by the Company or any of its Subsidiaries after the date hereof to not be an “Eligible Employee” within the meaning of the Company’s Special Severance Plan authorized by the Company’s board of directors on May 7, 2007;
(m) enter into, amend or extend any collective bargaining agreement or other labor agreement;
(n) enter into, amend or modify any agreement of the type described in Section 6.1(s);
(o) make any capital expenditures in excess of $100,000 individually or $300,000 in the aggregate not in excess of 120% of the amounts reflected over and above those capital expenditures identified in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 plan set forth in Section 5.01(b)(v7.1(o) of the Company Disclosure LetterSchedule;
(vip) with respect enter into any rights agreement, establish any stockholder rights plan (or similar plan commonly referred to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place as a Lien upon “poison pill”) or otherwise dispose of enter into any material Intellectual Property; provided that this clause Contract (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (case other than transactions among the Stock Plans existing on the date hereof and Company Options issued thereunder) under which the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties may become obligated to sell or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, otherwise issue, deliverregister, sellredeem, grantrepurchase, transfer, or encumber, or authorize the issuance, delivery, sale, grantvote, transfer or encumbrance of, dispose of any shares of its capital stock or any securities convertible other securities; or
(q) except as provided in Section 7.2 and Section 7.3, agree, authorize or exchangeable into commit to do any of the foregoing. Nothing contained in this Agreement (including, without limitation, this Section 7.1) is intended to give Parent, directly or exercisable forindirectly, the right to control or direct the Company’s or any optionsof its Subsidiaries’ operations prior to the Control Date, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of nothing contained in this Agreement in accordance with is intended to give the existing terms Company, directly or indirectly, the right to control or direct Parent’s or any of such awards its Subsidiaries’ operations. Prior to the Control Date, each of Parent, Merger Sub and the Company Stock Plansshall exercise, (B) Investment Preferred Stock (as defined consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations. Subject to the immediately preceding paragraph, in connection with the Bridge Facility) continued operation of the Company and the Subsidiaries, the Company will reasonably confer in good faith on a regular basis with one or (C) more representatives of Parent, designated by wholly owned Subsidiaries Parent to the Company or to any other wholly owned Subsidiary in writing, regarding operational matters, and the general status of ongoing operations of the Company; provided that, for the avoidance Company and will notify Parent promptly of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 occurrence that has had or may reasonably be expected to have a Company Material Adverse Effect or that, individually or $200,000,000 in the aggregate in any yearaggregate, in each case to acquire any business, whether by merger, consolidation, purchase of property has materially delayed or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that wouldimpaired, or would reasonably be expected to, prevent, to materially delay or materially impair the impair, consummation of the Transactions;
(x) other than capital expenditures made transactions contemplated by this Agreement, or that, individually or in accordance the aggregate, has resulted, or would reasonably be expected to result, in the failure by the Company to comply with or satisfy in any material respect any condition set forth in Section 5.01(b)(v) 8.1 or 8.2; provided, however, that no such notification shall affect the covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement. The Company acknowledges that Parent does not and other than purchases and licenses will not waive any rights it may have under this Agreement as a result of film and television and production programming (includinsuch notice or consultations.
Appears in 1 contract
Sources: Merger Agreement (Topps Co Inc)
Interim Operations. (a) The Company covenants and agrees Except (i) as to itself and its Subsidiaries thatrequired by applicable Law, from and after the execution of (ii) as otherwise expressly contemplated by this Agreement and prior or (iii) as set forth in Schedule 6.01(b), (iv) as required by any Governing Documents of such entities or (v) as consented to the First Effective Time in writing by HESM (unless Parent shall otherwise approve in writing, which approval consent shall not be unreasonably withheld, conditioned delayed or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letterconditioned), during the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, period from and after the date of this Agreement and prior to until the First earlier of the Effective Time (unless Parent or the termination hereof, each HIP Entity shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend conduct its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (EB) commercial paper issued use commercially reasonable efforts to maintain and preserve intact its business organization and the goodwill of those having business relationships with it, (C) use commercially reasonable efforts to keep in full force and effect all material Permits and all material insurance policies maintained by the HIP Entities, other than changes to such policies made in the ordinary course of business consistent business, and (D) use commercially reasonable efforts to comply in all material respects with past practice in a principal amount not to exceed $250,000,000 in all applicable Laws and the aggregate at any time outstanding, requirements of all Material Contracts.
(Fb) Indebtedness, Without limiting the proceeds of which will be used to finance all or any portion generality of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that foregoing, during the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of period from the date of this Agreement in until the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness earlier of the type described in clauses Effective Time or the termination hereof, except (GA) as required by applicable Law, (B) as otherwise expressly contemplated by this Agreement or the other Transaction Documents or (HC) aboveas set forth in Schedule 6.01(b), none of the HIP Entities shall, without the prior written consent of HESM (Kwhich consent will not be unreasonably withheld, delayed or conditioned):
(i) Indebtedness and replacements and refinancings thereof incurred adopt or propose any change to any of their Organizational Documents as in connection with effect on the funding date of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practicethis Agreement;
(vii) with respect to issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the Retained Businessissuance, other than with respect to acquisitions of businessessale, which is subject to Section 5.01(b)(ix)pledge, and other than with respect to film and television production and programming (including sports rights) with third parties or video game productiondisposition, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Businessgrant, transfer, lease, license, guarantee or encumbrance of, any equity securities of the HIP Entities, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any equity securities or such convertible or exchangeable securities or interests;
(iii) declare, set aside or pay any distributions in respect of any of their equity securities or split, combine or reclassify any of their equity securities, other than cash distributions to their respective equity holders in accordance with their respective Organizational Documents;
(iv) settle, propose to settle or compromise any action before a Governmental Authority if such settlement, proposed settlement or compromise (A) with respect to the payment of monetary damages, involves the payment of monetary damages that exceed $1,000,000 in the aggregate (together with all other settlements or compromises after the date of this Agreement), net of any amounts covered by insurance that the HIP Entities expect to be promptly paid by the applicable insurer, (B) that imposes any material equitable or non-monetary relief, penalty or restriction on any HIP Entity or (C) that would reasonably be expected to affect the rights or defenses available to any HIP Entity in any related or similar claims that, individually or in the aggregate, are material to the HIP Entities, taken as a whole;
(v) recommend, propose, announce, adopt or vote to adopt a plan of complete or partial dissolution or liquidation, in each case, that would (A) prevent or materially impede or delay the ability of the Parties to satisfy any of the conditions to, or the consummation of, the transactions set forth in this Agreement or (B) adversely affect in a material way the rights of holders of the securities of any Party;
(vi) transfer, sell, assignlease, let lapse, abandon, cancellicense, mortgage, pledge, place a Lien upon surrender, encumber, divest, cancel or abandon or otherwise dispose of any of the HIP Entities’ material Intellectual Property; provided that this clause (vi) shall not restrict assets, product lines or businesses, including any equity interests of any of the HIP Entities, except (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production goods or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not services provided in the ordinary course of business and sales of obsolete assets, or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (DB) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not 1,000,000 in the ordinary course aggregate;
(vii) except (w) as set forth in Schedule 6.01(b)(vii), (x) transactions solely between or $100,000,000 individually among the HIP Entities and/or the HESM Entities that will not result in any event obligation or liability to any party other than the HIP Entities and/or the HESM Entities, (y) borrowings permitted under the HIP Credit Agreement or (z) in connection with the Financing Transactions, (A) incur, assume or guarantee any indebtedness for borrowed money, (B) transactions among issue, assume or guarantee any debt securities, (C) grant any option, warrant or right to purchase any debt securities, or (D) issue any securities convertible into or exchangeable for any debt securities of others, other than any such actions contemplated in (A) through (D), as would not, taken together, result in the Company and incurrence or guarantee of indebtedness or issuance of debt securities with a value in excess of $1,000,000 in the Retained Subsidiariesaggregate;
(viii) make any change to any of their accounting policies or procedures, except as required by changes after the date hereof in accordance with GAAP;
(ix) (A) change any material method of Tax accounting, (B) make, change or revoke any material Tax election, (C) settle or compromise any material liability for Taxes, (D) file any materially amended Tax Return, (E) enter into any written agreement with any Governmental Authority with respect to SpinCo and Taxes, (F) surrender any right to claim a refund for Taxes, (G) consent to an extension of the SpinCo Subsidiaries, issue, deliver, sell, grant, transferstatute of limitations applicable to any Tax claim or assessment, or encumber(H) take any action or fail to take any action that would reasonably be expected to cause any HIP Entity (other than HIP Holdings and ▇▇▇▇ Infrastructure Partners Finance Corporation) to be treated, for U.S. federal income Tax purposes, as a corporation; or
(x) agree, authorize or authorize commit to do any of the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except foregoing.
(Ac) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on From the date of this Agreement until the Closing Date, each of HESM Entities and HIP Parties shall promptly notify the other Parties in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess writing of (Ai) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event event, condition or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided circumstance that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would could reasonably be expected to, prevent, materially delay or materially impair the consummation to result in any of the Transactions;
conditions set forth in Article V not being satisfied at the Effective Time, and (xii) other than capital expenditures made any material breach by the notifying Party of any covenant, obligation or agreement contained in accordance with this Agreement; provided, however, that the delivery of any notice pursuant to this Section 5.01(b)(v6.01(c) and other than purchases and licenses of film and television and production programming (includinshall not limit or otherwise affect the remedies available hereunder to the notified Party.
Appears in 1 contract
Sources: Partnership Restructuring Agreement (Hess Midstream Partners LP)
Interim Operations. (a) The Company covenants and agrees Except as to itself and its Subsidiaries thatotherwise (w) required by this Agreement, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1x) required by applicable Law, (2y) expressly required approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or as contemplated by the Final Step Planconditioned) or (3z) otherwise expressly disclosed in set forth on Section 5.01(a6.1(a) of the Company Disclosure Letter)Schedule, the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writingTime, which approval shall not be unreasonably withheld, conditioned or delayedthe Company will, and which determination shall take into account will cause its Subsidiaries to, use its and their reasonable best efforts to conduct their businesses in the ordinary course and, to the extent consistent therewith, the Company Overview Presentationshall, and except shall cause its Subsidiaries to, use its and their commercially reasonable efforts to preserve their business organizations intact (including the service of key employees) and maintain existing relations with key customers, suppliers and other Persons with whom the Company and its Subsidiaries have significant business relationships; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 6.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision of Section 6.1(b).
(b) Except as otherwise (1w) required by this Agreement, (x) required by applicable Law, (2y) expressly required approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distributionsuch approval not to be unreasonably withheld, delayed or conditioned) or (3z) otherwise expressly disclosed in set forth on Section 5.01(b6.1(b) of the Company Disclosure Letter)Schedule, from the date of this Agreement until the Effective Time, the Company shall not will not, and shall not permit any of will cause its Subsidiaries not to:
(i) except (x) adopt any change in the certificate of incorporation or bylaws of the Company, or (y) adopt any change in the comparable organizational document of any Subsidiary of the Company that, in the case of this clause (y), would adversely affect the consummation of the Merger or the other transactions contemplated by this Agreement;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries, in each case other than any such transactions among any wholly-owned Subsidiaries of the Company which would not reasonably be expected to result in a restriction or reduction in any participation exemption available under non-U.S. Law with respect to SpinCo any such Subsidiaries;
(iii) (A) acquire or license tangible or intangible assets outside of the ordinary course of business or (B) make any capital contributions to or investments in any Person, in the case of clauses (A) and the SpinCo Subsidiaries (B), other than any such transactions (I) among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries or (II) for amounts that do not exceed $200,000,000 in the aggregate in any fiscal year of the Company (in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to determined based upon the governing documents of any Subsidiary greater of the fair market value of the assets so acquired by the Company that would not prevent, delay or impair the Initial Merger and its Subsidiaries or the other Transactionsfair market value of the consideration paid by the Company and its Subsidiaries);
(iv) issue, (B) splitsell, combinepledge, subdivide or reclassify its outstanding dispose of, grant, transfer, encumber any shares of capital stock of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (except for A) any such transaction by a wholly among the Company and its wholly-owned subsidiary Subsidiaries or among the Company’s wholly-owned Subsidiaries or (B) any issuance, sale, grant or transfer of Shares pursuant to the settlement of Company Options, Company SARs, Company RSUs, Company PSUs or Company Awards outstanding as of the date of this Agreement or granted after the date of this Agreement not in violation of this Agreement;
(v) make any loans, advances or guarantees outside the ordinary course of business, other than any such transactions (I) among the Company which remains a wholly and its wholly-owned Subsidiary after consummation of such transaction)Subsidiaries or among the Company’s wholly-owned Subsidiaries, (CII) permitted under Section 6.1(b)(viii) or (III) not in excess of $25,000,000 in the aggregate in any fiscal year of the Company;
(vi) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1A) any dividends or other distributions paid by a direct or indirect wholly any wholly-owned Subsidiary of the Company to another direct the Company or indirect wholly to any other wholly-owned Subsidiary of the Company or and except for any quarterly dividends to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) stockholders of the Company Disclosure Letter)by the Company in an amount not to exceed $0.54 per Share, (D) enter into any agreement in each case declared and paid at such times and in such amounts as is consistent with respect historical practice over the most recent fiscal year ended prior to the voting date of its capital stockthis Agreement and (B) dividend equivalents paid in respect of Company RSUs, Company PSUs or Company Awards outstanding as of the date of this Agreement or granted thereafter in accordance with the terms of this Agreement, in each case, in accordance with their terms);
(Evii) purchasereclassify, repurchasesplit, redeem combine, subdivide or redeem, purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than except for (1A) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms any such transaction by a wholly-owned Subsidiary of the Company Stock Plans and (B) acquisitions of Shares in satisfaction of withholding obligations or payment of the exercise price in respect of Company Options, Company SARs, Company RSUs, Company PSUs or Company Awards outstanding as in effect on of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement);
(viii) incur any Indebtedness, except for (A) intercompany Indebtedness among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, (B) Indebtedness not to exceed $1,500,000,000 in aggregate principal amount incurred to replace, renew, extend, refinance or refund any existing Indebtedness of the Company, which Indebtedness is (I) prepayable without premium or penalty (other than customary LIBOR breakage amounts) or (II) on terms that (x) taken as modified after a whole, are substantially consistent with or not more restrictive than those contained in the Indebtedness being replaced, renewed, extended, refinanced or refunded and (y) permit parent guarantees and parent company reporting to be substituted for Company reporting, (C) Indebtedness under commercial paper arrangements, revolving credit facilities and other working capital or liquidity facilities not to exceed $3,500,000,000 in aggregate principal amount at any time outstanding pursuant to this subclause (C), (D) guarantees of Indebtedness of the Company or its wholly-owned Subsidiaries outstanding on the date hereof or otherwise incurred in compliance with this Section 6.1(b), (E) Indebtedness of the Subsidiaries of the Company organized under the laws of a country other than the United States in an aggregate principal amount (for all such Subsidiaries, taken together) not to exceed $500,000,000 at any time outstanding pursuant to this subclause (E), (F) Indebtedness pursuant to receivables financing or factoring arrangements (but in any event for which the factoring balance does not exceed $2,400,000,000 at any time outstanding (it being understood that this clause (viii)(F) and clause (xv)(D), taken together, permit a factoring balance that does not exceed $2,400,000,000)), (G) Indebtedness pursuant to capitalized leases (1) entered into in the ordinary course of business or (2) entered into in connection with the Arizona Greenhouse project, (H) Indebtedness in respect of swaps, options, derivatives and other hedging Contracts entered into in the ordinary course of business, (I) Indebtedness under letters of credit, bank guarantee arrangements and any related reimbursement obligations entered into in the ordinary course of business or (J) Indebtedness not to exceed $250,000,000 in aggregate principal amount that may be incurred other than in accordance with subclauses (A) through (I) inclusive;
(ix) (A) make or authorize any payment of, or accrual or commitment for, capital expenditures that, in the aggregate, exceed by more than 5%, or (B) fail to make payments of capital expenditures that, in the aggregate, are no less than 90%, in the case of each of clauses (A) and (B), of the aggregate amounts set forth in Section 6.1(b)(ix) of the Company Disclosure Schedule (the “Capex Budget”) for the respective periods set forth therein, except with respect to acquisitions or licenses of tangible or intangible assets permitted by clause (II) of Section 6.1(b)(iii);
(x) other than in the ordinary course of business or in connection with any matter to the extent such matter is expressly permitted by any other clause of this Section 6.1(b), (A) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or (B) terminate or waive, or materially amend, modify or supplement, any rights or interests pursuant to or in any Material Contract, other than expirations of any such Contract in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company)such Contract;
(iixi) merge or consolidate with enter into any other Person, or restructure, reorganize or completely or partially liquidate Contract that (other than transactions of x) materially restricts the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider ability of the Company or any of its Subsidiaries (or, following the consummation of the Merger, would materially restrict the ability of the Surviving Corporation or its Affiliates) to compete in any business or geographic area, or (y) grants “most favored nation” status that, following the consummation of the Merger, would be material to the Company or the crop science business of Parent and would apply to Parent, the Company or any of their respective Subsidiaries;
(xii) make any material changes with respect to financial accounting policies or procedures, except as required by Law, proposed Law or by U.S. GAAP or statutory or regulatory accounting rules or interpretations with respect thereto or by any Governmental Entity or quasi-governmental authority (Cincluding the Financial Accounting Standards Board or any similar organization);
(xiii) increase the compensationsettle any action, bonus or pensionsuit, welfare claim, hearing, arbitration, investigation or other benefits proceedings (other than any audit or other proceeding in respect of any directorTaxes), officer in each case made or employee of pending against the Company or any of its Subsidiaries (and not including any settlement with respect to matters in which any of them is a plaintiff) for an amount in excess of $150,000,000 in the aggregate in any fiscal year of the Company or on a basis that would result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Entity that, in the aggregate, would materially restrict the future activity or conduct of Parent, the Company or any of their respective Subsidiaries, except other than with respect to monetary settlements only, settlements or compromises of any action, suit, claim, hearing, arbitration, investigation or other proceedings to the extent reflected or reserved against in the balance sheet (or the notes thereto) of the Company included in the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2016 for an amount not in excess of the amount so reflected or reserved;
(A) file or amend any material Tax Return (other than in the ordinary course of business consistent with past practice with respect to business), (1B) employees below settle or compromise any material Tax liability for an amount materially in excess of the level of Executive Vice President and amount reserved or accrued on the Company’s most recent consolidated balance sheet included in the Company Reports, (2C) employees at make, change or above the level of Executive Vice President revoke any material Tax election (other than an entity classification election under Treasury Regulation Section 301.7701-3 in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeany Subsidiary that is not material), (D) increase change any material method of Tax accounting or (E) terminate, consent to the severance termination of or termination payments or benefits payable agree to any director, officer, employee material modification of any ruling or other service provider agreement listed in Section 5.1(n)(iii) of the Company Disclosure Schedule (or any that would be necessary to be listed therein in order to prevent a breach of its Subsidiaries, (ESection 5.1(n)(iii)) take any if such action is reasonably expected to accelerate result in a material increase in the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees Tax liability of the Company or any of its Subsidiaries;
(ivxv) incur transfer, sell, lease, divest, cancel or otherwise dispose of any Indebtedness assets (other than Intellectual Property Rights, Germplasm, or issue Biological Materials) of the Company or any warrants of its Subsidiaries, except for transfers, sales, leases, divestments, cancellations or other rights to acquire any Indebtedness, except dispositions (A) of products and services in the ordinary course of business consistent with past practice business, (B) of obsolete inventory and equipment in the ordinary course of business, (C) of tangible assets having a principal amount net present value not to exceed in excess of $400,000,000 35,000,000 individually or $60,000,000 in the aggregate in any fiscal year of the Company (it being understood that the net present value of such assets shall count against the thresholds set forth in Section 6.1(b)(xvi)(IV)), (D) of receivables, invoices and related rights and assets pursuant to receivables financing or factoring arrangements (but in any event for which the factoring balance does not exceed $2,400,000,000 at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company (it being understood that this clause (xv)(D) and its Subsidiariesclause (viii)(F), taken as together, permit a whole, than existing Indebtedness, factoring balance that does not exceed $2,400,000,000)) and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (BE) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries;
(xvi) (A) transfer, sell, license, mortgage, pledge, encumber, divest or otherwise dispose of any Intellectual Property Rights, Germplasm or Biological Materials or (B) except in the ordinary course of business, grant, extend, amend, fail to diligently prosecute or cancel, abandon or allow to lapse (in each case, except as required in the diligent prosecution of Registered Intellectual Property), waive or modify, as applicable, any rights in or to material Owned Intellectual Property, Germplasm or Biological Materials, except, in the case of each of clauses (A) and (B), for (I) non-exclusive licenses of Intellectual Property Rights, Germplasm or Biological Materials in the ordinary course of business, (DII) exclusive licenses of Intellectual Property Rights, Germplasm or Biological Materials in the ordinary course of business, provided such licenses are not exclusive in all fields of use, and provided, further, that such licenses retain the Company’s rights to offer or develop products or services that the Company is offering or developing or planning to offer or develop, as the case may be, at any time from the date hereof and through the Effective Time, (1III) transfers, sales, licenses, mortgages, pledges, encumbrances, divestments and other dispositions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries and (IV) transfers, sales, licenses, divestments or other dispositions of Intellectual Property Rights, Germplasm or Biological Materials having a net present value not in excess of $35,000,000 individually or $60,000,000 in the aggregate in any fiscal year of the Company (it being understood that the net present value of such Intellectual Property Rights, Germplasm or Biological Materials shall count against the thresholds set forth in Section 6.1(b)(xv)(C));
(xvii) except as required by Contracts or Benefit Plans, (A) terminate, adopt, establish, enter into, materially amend or renew (or communicate any intention to take such action) any material Benefit Plan, (B) increase in any manner the compensation, benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants who are natural persons of the Company or its Subsidiaries, other than routine annual salary or base pay increases (and corresponding increases in bonus or incentive payments to the extent not drawn upon and payments are not triggered therebydetermined by reference to salary or base pay) for non-executive officer employees, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (EC) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at pay any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all bonus or incentive compensation under any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained BusinessBenefit Plan, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget payments based on actual performance for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries)completed performance periods, (D) licenses, sales, letting lapse, abandonment and cancellations accelerate the vesting of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose lapsing of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transferrestrictions, or encumber, or authorize amend the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinvesting require
Appears in 1 contract
Sources: Merger Agreement (Monsanto Co /New/)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as (1) otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation its business and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each business of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in all material respects in the ordinary course of business consistent with past practiceOrdinary Course and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Businessconsistent therewith, subject to compliance with the specific matters set forth below, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the Retained Business’ organization their business organizations substantially intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ respective present officers, employees and agents, except as otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Law, provided that no action by the Company with respect to matters permitted by any provision of clauses (i)-(xxii) of Section 7.1(b) below shall be deemed a breach of the obligations under this sentence unless such action would constitute a breach of such other provision.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise expressly (unless Parent shall otherwise approve A) contemplated by this Agreement, (B) required by a Governmental Entity or applicable Law, (C) approved in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Parent or (3D) otherwise expressly disclosed set forth in Section 5.01(b7.1(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except adopt or propose any change in (x) the Company’s Organizational Documents or (y) any Subsidiary’s Organizational Documents;
(ii) merge or consolidate itself or any of its Subsidiaries with respect to SpinCo and the SpinCo Subsidiaries (any other than in the case of clause (A))Person, (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a transactions among its wholly owned subsidiary Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) acquire assets from any other Person with a fair market value or purchase price in excess of $12.5 million in the aggregate, other than acquisitions pursuant to Material Contracts in effect as of the Company which remains a date of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or of any of its Subsidiaries (other the issuance of shares (A) by its wholly owned Subsidiary after consummation to it or another of its wholly owned Subsidiaries or (B) in respect of outstanding Company Equity Awards in accordance with their terms and, as applicable, the Stock Plans), any Company Equity Award, or securities convertible or exchangeable into or exercisable for any shares of such transaction)capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(Cv) create or incur any Encumbrance (other than a Permitted Encumbrance) that is material to the Company on any of its or its Subsidiaries’ assets, rights or properties;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its wholly owned Subsidiaries) in excess of $5 million in the aggregate;
(vii) make any loans or advances to, guarantees for the benefit of, or entered into any other material transaction with any Company Employee or Affiliates other than advances for business, travel-related, relocation or other similar expenses in accordance with currently existing Company policy;
(viii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(ix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, or (E) purchaseoffer to redeem, repurchase, redeem repurchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (stock, other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect toshares of Company Common Stock to satisfy withholding Tax obligations upon the exercise, vesting or settlement of outstanding Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case Equity Awards in accordance with past practice and their terms and, as applicable, the Stock Plans, or in connection with “net exercise” of outstanding Company Options in accordance with their terms and, as applicable, the terms Stock Plans;
(x) incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (A) Indebtedness for borrowed money incurred for working capital purposes or otherwise incurred in the Ordinary Course under the Company’s revolving credit facility, (B) Indebtedness for borrowed money not to exceed $10 million in the aggregate, (C) guarantees of Indebtedness of its wholly owned Subsidiaries otherwise incurred in compliance with this Section 7.1; or (D) Indebtedness under the Company’s revolving credit facility or any other credit facility of the Company Stock Plans or any of its Subsidiaries as in effect on as of the date of this Agreement (or as modified after to the date extent incurred to fund any other action expressly permitted under the other paragraphs of this Section 7.1(b);
(xi) except as set forth in the Company’s capital budget set forth in Section 7.1(b)(xi) of the Company Disclosure Letter, make or authorize any capital expenditures in excess of $5 million in the aggregate during any fiscal quarter (it being understood that any portion of the capital expenditures budget for any fiscal quarter and such $5 million in excess thereof not expended in such fiscal quarter, beginning with the first quarter of the 2018 fiscal year, may be carried forward and, together with any amount otherwise permissible pursuant to this paragraph (x), expended in any future fiscal quarter);
(xii) other than in the Ordinary Course, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or amend, modify, supplement, waive, terminate, assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract, other than (A) expirations of any such Contract in the Ordinary Course in accordance with the terms of this Agreement) such Contract, or (2B) purchasesnon-exclusive licenses, repurchasescovenants not to ▇▇▇, redemptions releases, waivers or other acquisitions of securities of any wholly rights under Intellectual Property Rights owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of its Subsidiaries, in each case, granted in the Company)Ordinary Course;
(iixiii) merge settle or consolidate with compromise any other PersonProceedings for an amount in excess of $3 million individually or $6 million in the aggregate, net of applicable insurance payments, recoveries or proceeds, or restructure, reorganize on a basis that would (A) prevent or completely or partially liquidate (other than transactions materially delay consummation of the type contemplated by Section 5.01(b)(viiMerger or the Transactions, or (B) result in the imposition of any term or Section 5.01(b)(ix) which are not restricted thereby and other than mergers condition that would materially restrict the future activity or consolidations of a Subsidiary conduct of the Company or its Subsidiaries or a finding or admission of a criminal violation of Law;
(xiv) make any changes with respect to accounting policies or procedures, except as required by GAAP;
(xv) except in which such Subsidiary is the surviving entity Ordinary Course, (A) make, change or revoke any material Tax election, (B) adopt or change any material Tax accounting method, (C) file any amended Tax return with respect to any material Tax, (D) enter into any closing agreement with respect to any material Taxes, (E) settle any material Tax claim, audit, assessment or dispute, (F) surrender any right to claim a refund of a material amount of Taxes or (G) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment;
(xvi) transfer, sell, lease, license, divest, cancel, mortgage, pledge, surrender, encumber, abandon or allow to lapse or expire or otherwise dispose of any assets (tangible or intangible), rights, properties, product lines or businesses, in connection whole or in part, material to it or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except for (A) sales of obsolete assets, (B) sales, leases or other dispositions of assets (not including services) with an acquisition a Fair Value not otherwise prohibited by in excess of $15 million in the aggregate other than pursuant to Material Contracts in effect prior to the date of this Agreement and other than mergers among, or (C) non-exclusive licenses entered into in the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions)Ordinary Course;
(iiixvii) except as expressly required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any Company Plan as Employee, except, in effect the case of Company Employees who are not Executive Officers, in the Ordinary Course, (B) increase the compensation or benefits payable to any Company Employee, except for (1) in the case of Company Employees who are not Executive Officers and whose annual base compensation is less than $225,000, increases in the Ordinary Course and (2) the payment of bonuses in the Ordinary Course for completed periods based on the date hereof: actual performance, (AC) establish, adopt, amend or terminate any material Company Benefit Plan or amend the terms of any outstanding equity-based awards other than any such action taken except for purposes of replacing, renewing or extending a broadly applicable material amendments to Company Plan Benefit Plans made in the ordinary course of business consistent with past practice Ordinary Course that does do not materially increase the cost expense of maintaining such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeplan, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan Benefit Plan, other than to the extent not required by such Company Benefit Plan, (including E) grant any equity-based new awards, or amend or modify the terms of any outstanding awards (including, without limitation, any Company Equity Awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (G) forgive any loans or issue any loans to directors, officers or employees of the Company or any of its Subsidiaries;
Subsidiaries (iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, for loans made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% $100,000 individually or $500,000 in the aggregate), (H) hire any employee or engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees in excess of $200,000 (other than employees hired to fill open positions existing as of the amounts reflected date of this Agreement or to replace employees whose employment has terminated following the date of this Agreement (provided that if at the time of hiring the overall net increase in employee headcount from the Company’s capital expenditure budget date hereof does not exceed 50, no consent of Parent shall be required to hire employees to fill open positions existing as of the date of this Agreement or to replace employees whose employment has terminated following the date of this Agreement) or (I) terminate the employment of any Executive Officer other than for each cause or permanent disability;
(xviii) recognize any union, works council or other labor organization as the representative of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) any of the employees of the Company Disclosure Letter;
(vi) with respect to or any of the Retained BusinessSubsidiaries, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of enter into any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licensesCompany Labor Agreement, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreementsexcept as required by applicable Law;
(viixix) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon implement or otherwise dispose of announce any properties employee layoffs or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any yearlocation closings, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise other than in the Ordinary Course;
(valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall xx) enter into any such transaction Contract which contains a change in control or similar provision that would, or would reasonably be expected to, prevent, materially delay or materially impair triggered in connection with the consummation of the TransactionsMerger;
(xxxi) other than capital expenditures made in accordance the Ordinary Course, amend or modify in any material respect, or extent, renew or terminate any lease, sublease, license or other agreement for the use or occupancy of any real property, or enter into any new lease, sublease, license or other agreement for the use or occupancy of any real property; or
(xxii) agree, authorize or commit to do any of the foregoing.
(c) Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s operations prior to the Effective Time. Prior to the Effective Time, each of the Company and Parent shall exercise, consistent with Section 5.01(b)(v) the other terms and other than purchases conditions of this Agreement, complete control and licenses of film and television and production programming (includinsupervision over their respective businesses.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, writing and except as (1) required by applicable Law, (2) otherwise expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by this Agreement), the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) business of the Company Disclosure Letter)and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve its business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ its existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) associates. Without limiting the generality of, and in furtherance of, of the foregoing, from the date hereof to the Effective Time except as set forth in the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time Disclosure Schedule (unless Parent shall otherwise approve in writingwriting and except as otherwise expressly contemplated by this Agreement):
(a) the Company shall not, which approval and shall cause its Subsidiaries not to enter into, terminate, or materially extend or modify any material Contract; provided, further, that neither the Company nor any of its Subsidiaries shall enter into (i) any time charters or bareboat charters having a term of more than sixty days but equal to or less than 12 months without first consulting with Parent or (ii) any time charters or bareboat charters having a term of more than 12 months, consecutive voyage arrangements or pooling arrangements, in each case in this clause (ii), without the prior express written consent of Parent, such consent not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as ;
(1b) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries to:
Subsidiaries; (i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (Aii) amend its certificate of incorporation or bylaws Organizational Documents; (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (Biii) split, combine, subdivide combine or reclassify its outstanding shares of capital stock stock; (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Civ) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any other than dividends or distributions paid by a from its direct or indirect wholly wholly-owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company Subsidiaries; or (2v) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture ofacquire, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or permit any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance ofacquire, any shares of its capital stock or any securities convertible into or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii)stock;
(ixc) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into (i) issue, sell, pledge, dispose of or encumber any such transaction that wouldshares of, or would reasonably be expected tosecurities convertible into or exchangeable or exercisable for, preventor options, materially delay warrants, calls, commitments or materially impair rights of any kind to acquire, any shares of its capital stock of any class or any other property or assets; (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries) or incur or modify any material indebtedness or other liability; (iii) make or authorize or commit for any capital expenditures in amounts greater than $100,000 individually and $1,000,000 in the consummation aggregate, other than such capital expenditures made pursuant to new building contracts, drydocking arrangements or Vessel upgrading arrangements, in each case, existing on the date of this Agreement and explicitly disclosed in the TransactionsCompany's 1999 budget delivered to Parent on March 26, 1999; or (iv) by any means, make any acquisition of, or investment in, assets or stock of any other Person or entity;
(xd) neither the Company nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans or increase the salary, wage, bonus or other than capital expenditures made compensation of any employees;
(e) neither the Company nor any of its Subsidiaries shall settle or compromise any material claims or litigation or modify, amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(f) neither the Company nor any of its Subsidiaries shall make any Tax election or otherwise alter any Tax or accounting practice or procedure, or permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated;
(g) neither the Company nor any of its Subsidiaries shall take any action or omit to take any action that would cause any of its representations and warranties herein to become untrue in accordance with Section 5.01(b)(vany material respect; and
(h) and other than purchases and licenses neither the Company nor any of film and television and production programming (includinits Subsidiaries shall authorize or enter into an agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations. (a) The Prior to the Effective Time, except as set forth in the Company covenants and agrees Disclosure Schedule or as to itself and its Subsidiaries that, from and after the execution contemplated by any other provision of this Agreement and prior to the First Effective Time (Agreement, unless Parent shall otherwise approve has consented in writing, writing thereto (which approval consent shall not be unreasonably withheld, conditioned or delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company Company:
(i) shall, and shall cause each of its the Company Subsidiaries to, conduct its operations in the ordinary course consistent with the manner as heretofore conducted;
(ii) shall use commercially reasonable efforts, and shall cause each of the Company Subsidiaries to use commercially reasonable efforts, to preserve intact their business organizations and goodwill, keep available the services of their respective officers and employees and maintain satisfactory relationships with those persons having business relationships with them;
(iii) shall not, and shall cause each of the Company Subsidiaries not to, amend their respective Certificates of Incorporation or Bylaws or comparable governing instruments;
(iv) shall give prompt notice to Parent of any representation or warranty made by it contained in this Agreement becoming untrue or inaccurate in any material respect such that the condition set forth in Section 6.3(a)(ii) would not be satisfied; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement;
(v) shall not, and shall not permit any of the Company Subsidiaries to, (A) acquire or agree to acquire by merging or consolidating with, or by acquiring any capital stock of or purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof, or (B) acquire or agree to acquire assets other than in the ordinary course of business or (C) release or relinquish or agree to release or relinquish any material contract rights;
(vi) shall not, and shall not permit any of the Company Subsidiaries to, effect any stock split or otherwise change its reasonable best efforts capitalization or issue any shares of its capital stock or securities convertible into or exchangeable or exercisable for shares of its capital stock, except upon exercise of options to conduct purchase shares of Company Common Stock under the Retained Business Company Stock Option Plans;
(vii) shall not, and shall not permit any of the Company Subsidiaries to, grant, confer or award any options, warrants, conversion rights or other rights, not existing on the date hereof, to acquire any shares of its capital stock or other securities of the Company or any of the Company Subsidiaries, other than the issuance of Company Options consistent with past practice;
(viii) shall not, and shall not permit any of the Company Subsidiaries to, take or fail to take any action which would, or would be reasonably likely to, prevent the accounting for the Merger as a pooling of interests in accordance with APB No. 16, the interpretive releases issued pursuant thereto, and the pronouncements of the SEC;
(ix) shall not, and shall not permit any of the Company Subsidiaries to, take or fail to take any actions which would be reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(x) shall not, and shall not permit any of the Company Subsidiaries to, amend in any material respect, except as required by applicable law or in response to changes in applicable law, the terms of any Company Employee Plans, including, without limitation, any employment, severance or similar agreements or arrangements in existence on the date hereof, or adopt any new employee benefit plans, programs or arrangements or any employment, severance or similar agreements or arrangements, or grant any award thereunder (except as permitted by clause (vii) above or, in the case of awards not involving the acquisition of securities, in the ordinary course of business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit or grant any of its Subsidiaries to:
(i) except with respect salary increases to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary employee of the Company or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) any of the Company Disclosure Letter), (D) enter into any agreement with respect to Subsidiaries except in the voting ordinary course of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance -26- 27 business consistent with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company except that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material the Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan may hire employees in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, and (B) grant or provide this subsection (x) shall not preclude Company from making payments under Company Employee Plans;
(xi) shall not, and shall not permit any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its SubsidiariesSubsidiaries to, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (Ex) commercial paper issued incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the obligations of any other individual, corporation or other entity or (y) make any loans or advances to any other person;
(xii) shall not, and shall not permit any of the Company Subsidiaries to, (x) make, revoke or change any material election with respect to Taxes unless required by applicable law or (y) settle or compromise any material Tax liability; and
(xiii) shall not, and shall not permit any of the Company Subsidiaries to, agree, in writing or otherwise, to take any of the foregoing actions.
(b) Prior to the Effective Time, except as set forth in the ordinary course Parent Disclosure Schedule or as contemplated by any other provision of business consistent with past practice this Agreement, unless the Company has consented in a principal amount writing thereto (which consent shall not be unreasonably withheld), Parent:
(i) shall not, and shall cause each of Parent Subsidiaries not to, amend their respective Certificates of Incorporation or Bylaws or comparable governing instruments;
(ii) shall give prompt notice to exceed $250,000,000 the Company of any representation or warranty made by it contained in the aggregate at this Agreement becoming untrue or inaccurate in any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided material respect such that the aggregate principal amount of Indebtedness at any time outstanding under this clause (Fcondition set forth in Section 6.2(a)(ii) shall would not exceed $9,000,000,000be satisfied; provided, furtherhowever, that no such notification shall affect the Separation Agreement shall provide that SpinCo shall assume representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding parties under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practiceAgreement;
(viii) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix)shall not, and other than with respect to film and television production and programming (including sports rights) with third parties or video game productionshall not permit any of Parent Subsidiaries to, which is subject to Section 5.01(b)(x), make or commit to effect any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon stock split or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses change its capitalization or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, issue any shares of its capital stock or any securities convertible into or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such sharesfor shares of its capital stock, except (A) for any Shares issued pursuant upon exercise of options to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any purchase shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii)Parent Common Stock under Parent Stock Option Plans;
(ixiv) with respect to the Retained Businessshall not, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is shall not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor permit any of its Retained Parent Subsidiaries shall enter into to, take or fail to take any such transaction that action which would, or would be reasonably be expected likely to, preventprevent the accounting for the Merger as a pooling of interests in accordance with APB No. 16, materially delay or materially impair the consummation interpretive releases issued pursuant thereto, and the pronouncements of the TransactionsSEC;
(xv) other than capital expenditures made shall not, and shall not permit any of Parent Subsidiaries to, take or fail to take any actions which would be reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code; and
(vi) shall not, and shall not permit any of Parent Subsidiaries to, agree, in accordance with Section 5.01(b)(v) and other than purchases and licenses writing or otherwise, to take any of film and television and production programming (includinthe foregoing actions.
Appears in 1 contract
Sources: Merger Agreement (Cephalon Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent Time, its business and the business of its Subsidiaries shall otherwise approve be conducted in writing, which approval shall not be unreasonably withheld, conditioned or delayed, the ordinary and except as (1) required by applicable Law, (2) expressly required by usual course in all material respects. To the Transaction Documents (including in connection extent consistent with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)foregoing sentence, the Company shall, and shall cause each of its Subsidiaries to, shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the present employees and agents of the Company and its Subsidiaries’ present employees and agents.
(b) . Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of hereof until the Effective Time, except (A) as otherwise expressly required or permitted by this Agreement and prior to or the First Effective Time Voting Agreement, (unless Parent shall otherwise B) as Purchaser may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned delayed or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Lawconditioned), (2C) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed as set forth in Section 5.01(b) 5.1 of the Company Disclosure LetterLetter or (D) as required by any applicable Laws (including any requirement of the SEC), the Company shall will not and shall will not permit any of its Subsidiaries to:
(ia) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable other applicable governing documents;
(b) acquire or agree to acquire (i) by merging or consolidating with, or by purchasing a substantial portion of the stock, or other ownership interests in, or substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association, joint venture, limited liability company or other entity or division thereof or (ii) any assets that would be material, individually or in the aggregate, to the Company and its Subsidiaries, taken as a whole, except purchases of supplies, equipment, services and inventory in the ordinary course of business and except transactions involving only the Company and its wholly owned Subsidiaries;
(c) completely or partially liquidate the Company or adopt a plan of complete or partial liquidation with respect to the Company;
(d) other than (i) Shares issuable under the Company Options outstanding as of the date of this Agreement, (ii) Shares issuable in connection with the Company Awards outstanding as of the date of this Agreement, (iii) at any time after April 30, 2012, awards under the Stock Plan consistent with past practice, (iv) as may be required by the Revolving Credit Facility, and (v) subject to Section 3.3, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries (other than amendments to the governing documents issuance of any shares by a wholly owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(e) make any loans, advances (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) advances to employees in respect of ordinary course business expenses) or capital contributions to or investments in any shares of its capital stock Person (except for (1) other than the Company or any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company Company) other than in the ordinary course;
(f) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to another any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of to the Company or to the Company any other direct or (2indirect wholly owned Subsidiary) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock;
(g) other than transactions involving a direct or indirect wholly owned Subsidiary of the Company, reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture ofStock Plan and the Company Awards;
(h) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units issue or Company Performance Stock Units, in each case in accordance with past practice and with the terms sell any debt securities or warrants or other rights to acquire any debt security of the Company Stock Plans as or any of its Subsidiaries, except for (i) indebtedness for borrowed money incurred in effect on the date ordinary course of business pursuant to the Revolving Credit Facility up to the amount at any one time reflected in the applicable “Weekly Borrowing Base Balance” contained in document 10.3.27 in the Data Room plus an additional $5,000,000 and (ii) guarantees incurred in compliance with this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company Section 5.1 by the Company or any other of its direct or indirect wholly owned Subsidiaries of indebtedness of any direct or indirect wholly owned Subsidiary of the Company;
(i) except as set forth in the capital budgets contained in folders 3.1.2.1, 3.3.1, 3.3.2, 3.3.6, 5.10.2 5.10.3, 5.10.4, 10.3.3 and 10.3.16 of the Data Room and consistent therewith, make or authorize any capital expenditures in the aggregate in excess of $500,000;
(j) make any changes with respect to accounting policies or procedures, except as required by Law or changes in applicable GAAP;
(k) waive, release, assign, settle or compromise any material legal action (other than actions that are covered by Section 7.11 hereof), other than (i) in the ordinary course of business in an amount not to exceed $250,000 (net of any amount covered by insurance) and/or (ii) if the loss resulting from such waiver, release, assignment settlement or compromise is reasonably expected to be reimbursed to the Company or any of its Subsidiaries by an insurance policy (subject to any deductible or retention);
(l) other than in the ordinary course of business consistent with past practice, (i) make, revoke or change any material Tax election, (ii) merge settle or consolidate finally resolve any Tax contest with respect to a material amount of Tax, (iii) file any amended income or other Personmaterial Tax Return that reflects a material increase in the tax liability of the Company, or restructure, reorganize (iv) prepare or completely or partially liquidate (file any material Tax Return other than transactions in a manner consistent in all material respects with past practice, (v) consent to any extension or waiver of the type contemplated by Section 5.01(b)(viilimitation period applicable to any material Tax Return or any claim or assessment in respect of a material amount of Taxes, (vi) enter into any closing agreement relating to any material Tax liability, or Section 5.01(b)(ix(vii) give or request any waiver of a statute of limitation with respect to any material Tax Return;
(m) sell, lease, license, transfer, pledge, mortgage, encumber, grant or dispose of or enter into negotiations with respect to the disposition of any material assets of the Company, including the capital stock of Subsidiaries of the Company, other than (i) the sale of inventory in the ordinary course of business, (ii) the disposition of used, obsolete or excess equipment in the ordinary course of business, (iii) other dispositions in the ordinary course of business, (iv) any Permitted Liens or (v) pursuant to any Contract existing and in effect as of the date hereof, true and complete copies of which are not restricted thereby and other than mergers contained in the Data Room;
(n) enter into any (i) Contract containing any “change of control” or consolidations of a Subsidiary similar provision that would be triggered by the transactions contemplated hereby, or (ii) Affiliate Transaction;
(o) subject to Section 3.3, except as required pursuant to Contracts in effect prior to the date hereof or any Benefit Plan in effect prior to the date hereof, or as otherwise required by applicable Law and, at any time after April 30, 2012, awards under the Stock Plan consistent with past practice, (i) grant or provide any severance or termination payments or material benefits to any existing or former director, officer employee or consultant of the Company in which such Subsidiary is or any of its Subsidiaries, (ii) increase the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and compensation, bonus or pension, welfare, severance or other than mergers amongbenefits of or pay any bonus to any current or former director, officer, employee or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries consultant of the Company that would not preventor any of its Subsidiaries other than with respect to non-executive employees and in the ordinary course, materially delay in each case consistent with past practice, or materially impair make any new equity awards to any current or former director, officer, employee or independent contractor of the Transactions);
Company or any of its Subsidiaries, (iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Benefit Plan or arrangement that would be a Benefit Plan if in effect as of the date of this Agreement, or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofawards, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (Eiv) 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 Company Plan (including any equity-based awards)Benefit Plan, (Fv) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP or (Gvi) forgive any loans to any current or former directors, officers officers, employees or employees independent contractors of the Company or any of its Subsidiaries;; or
(ivp) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtednessagree, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 1 contract
Sources: Merger Agreement (Golfsmith International Holdings Inc)
Interim Operations. (a) The Company Each of Omnicom and Publicis covenants and agrees as to itself and its Subsidiaries that, from and after the execution date hereof and until the earlier of the Omnicom Effective Time or the termination of this Agreement and prior in accordance with its terms, unless Omnicom (in the case of any action proposed to be taken by Publicis or any Subsidiary of Publicis) or Publicis (in the First Effective Time (unless Parent case of any action proposed to be taken by Omnicom or any Subsidiary of Omnicom) shall otherwise approve in writing, writing (which approval shall not be unreasonably withheld, conditioned or delayeddelayed by the party from whom it is requested, with an understanding that (x) all requests for such approval shall be directed to the Chief Executive Officer of the party from whom approval is requested, or such Person as may be designated by such Chief Executive Officer, with a copy to the General Counsel of such party and (y) a failure of such Chief Executive Officer (or such designee) to respond within ten Business Days shall be deemed to constitute consent of such party to such requested approval), and except as (1) required otherwise expressly contemplated by applicable Law, (2) expressly required by the Transaction Documents this Agreement (including in connection with respect to the Separation Omnicom Transaction Dividend and the Distribution or Publicis Transaction Dividend) or, in the case of Publicis, except as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed set forth in Section 5.01(a) 5.1 of the Company Publicis Disclosure Letter or, in the case of Omnicom, except as otherwise set forth in Section 5.1 of the Omnicom Disclosure Letter), :
(a) the Company shall, business of it and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in the ordinary and usual course of business consistent with past practice, practice and the Company shall, it and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, shall use their respective commercially reasonable efforts to preserve the Retained Business’ intact its business organization intact and maintain the Retained Business’ its existing relations and goodwill with all Governmental EntitiesEntities (including applicable Regulatory Authorities) and Self-Regulatory Organizations, clients, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providersshareholders, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.as applicable;
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except with respect it shall not amend or propose to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws Organizational Documents; (or comparable governing documentsii) (other than amendments to the governing documents of any Subsidiary of the Company that would not preventneither Omnicom nor Publicis, delay or impair the Initial Merger or the other Transactions)as applicable, (B) shall split, combine, subdivide combine or reclassify its outstanding shares of capital stock or other equity interests; (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (Ciii) it shall not declare, set aside or pay any type of dividend or distribution other distribution, whether payable in cash, stock or property (or any combination thereof) property, in respect of any capital stock or other equity interests, as appropriate, other than (x) as required to pay the Omnicom Transaction Dividend or the Publicis Transaction Dividend, (y) regular quarterly dividends payable by Omnicom or regular annual dividends payable by Publicis (in each case in accordance with the terms and conditions of Section 5.13(c)) and (z) dividends payable by its direct or indirect Subsidiaries to it or another of its direct or indirect Subsidiaries in the ordinary and usual course of business (including in connection with acquisitions entered into after the date of this Agreement as permitted by Section 5.1(f)) and consistent with past practice or otherwise pursuant to Contracts in existence as of the date hereof; or (iv) except (w) for the acquisition by such party of shares of its capital stock (except for (1) any dividends or distributions paid other equity interests in connection with the surrender of such shares by a direct holders of Omnicom Stock Awards or indirect wholly owned Subsidiary Publicis Stock Awards, as applicable, in order to pay the exercise price of such Stock Awards in accordance with the Company to another direct or indirect wholly owned Subsidiary terms of the Company or to the Company or (2) normal semiannual cash dividends such Stock Awards as in effect on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)date hereof, (Dx) enter into any agreement for the withholding or disposition of shares of capital stock or other equity interests to satisfy withholding Tax obligations with respect to Omnicom Stock Awards or Publicis Stock Awards, as applicable, granted pursuant to the voting Omnicom Stock Plans and the Publicis Stock Plans, as applicable, in accordance with the terms of its capital stocksuch Stock Awards as in effect on the date hereof, (y) in accordance with, and only to the extent in furtherance of, Section 5.8 (it being agreed that any actions taken pursuant to this clause (y) shall be effected in a commercially reasonable manner, including as to the purchase or redemption price paid, and to the extent practicable, after consultation with the other party), or (Ez) purchaseas required pursuant to and in accordance with the terms of the Omnicom Convertible Notes, Publicis Convertible Notes or Publicis Warrants, as applicable, in each case for this clause (z) outstanding prior to the date hereof, it shall not repurchase, redeem or otherwise acquire acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or other equity interests, as applicable, or any securities convertible into or exchangeable into or exercisable for any shares of its capital stock or other equity interests, as applicable;
(c) neither it nor any of its Subsidiaries shall (i) except (x) in connection with internal reorganizations entered into in the ordinary and usual course of business solely among such party’s Subsidiaries which will not adversely affect the Intended Tax Treatment or (y) with respect to the issuance or sale of shares of, or securities convertible into or exchangeable or exercisable for, or rights of any kind to acquire, capital stock or other equity interests of, such party’s Subsidiaries (and for the avoidance of doubt not of such party), in the ordinary and usual course of business (including in connection with acquisitions entered into after the date of this Agreement as permitted by Section 5.1(f)) and consistent with past practice or otherwise pursuant to Contracts in existence as of the date hereof which, in each case, will not adversely affect the Intended Tax Treatment, issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests, or any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with its shareholders on any matter or any other property or assets, other than shares of Omnicom Common Stock or Publicis Shares (as applicable) issuable or transferable pursuant to (A) Publicis Warrants outstanding prior to the date hereof, (B) Publicis Convertible Notes outstanding prior to the date hereof, (C) the Omnicom ESPP or (D) Omnicom Stock Awards or Publicis Stock Awards outstanding on or awarded prior to the date hereof or made by Omnicom or Publicis, as applicable, after the date hereof in the ordinary and usual course of business and consistent with past practice or otherwise in accordance with Section 5.1(d); provided, that, any such Omnicom Stock Awards or Publicis Stock Awards issued after the date hereof do not include any benefits that vest, accelerate or result in any payment or funding in connection with any of the transactions contemplated by this Agreement (other than accelerated vesting as a result of a termination of employment or service upon or following the consummation of the transactions contemplated by this Agreement); (1ii) pursuant except (w) in connection with refinancings of existing indebtedness for borrowed money upon market terms and conditions, (x) for drawdowns of credit facilities outstanding as of the date hereof (or refinancings of such credit facilities permitted under clause (w)) in the ordinary and usual course of business and consistent with past practice, (y) to the forfeiture of, extent necessary in order to pay the Omnicom Transaction Dividend or withholding the Publicis Transaction Dividend or (z) in the ordinary and usual course of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance business and consistent with past practice practice, incur any indebtedness for borrowed money (including any guarantee of such indebtedness) or issue any debt securities; or (iii) make or authorize or commit to any capital expenditures, other than in the ordinary and usual course of business and consistent with past practice;
(d) except (x) as required by applicable Law or the terms of the Company Stock Plans as any Benefit Plan existing and in effect on the date of this Agreement Agreement, (y) as approved by the compensation committee of the Omnicom Board or the Publicis Board, as modified applicable (or, if such approval is not necessary or desirable to take the applicable action, approved by the Chief Executive Officer of Omnicom (in the case of actions to be taken by Omnicom or its Subsidiaries) or the Chief Executive Officer of Publicis (in the case of actions to be taken by Publicis or its Subsidiaries)) and, with respect to the Persons listed on Schedule IV, after advising the date Chief Executive Officer of this Agreement in accordance with the other party of the terms of this Agreement) and conditions thereof, or (2z) purchasesin the ordinary and usual course of business and consistent with past practice, repurchasesin the case of clauses (y) and (z) in a manner which will not adversely affect the Intended Tax Treatment; (i) terminate, redemptions establish, adopt, enter into, or other acquisitions of securities of materially amend any wholly owned Subsidiary of Benefit Plan, as the Company by the Company case may be, or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company arrangement that would not prevent, materially delay be an Omnicom Benefit Plan or materially impair the Transactions);
(iii) except as expressly required by any Company a Publicis Benefit Plan as if in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (Cii) increase the compensationsalary, wage, bonus or pension, welfare other compensation of any employees or other fringe benefits of any director, manager, officer or employee or enter into any contract, agreement, commitment or arrangement to do any of the foregoing; provided, that, none of the foregoing actions in clauses (i) or (ii) shall include any compensation or benefits that vest, accelerate or result in any payment or funding in connection with any of the transactions contemplated by this Agreement, (iii) enter into any contract, agreement, commitment or arrangement providing for the payment to any director, manager, officer or employee of such party or the Company funding of compensation or benefits in connection with, contingent upon, or the terms of which are materially altered in connection with, any of the transactions contemplated by this Agreement either alone or, except as provided below, in conjunction with any other event or (iv) provide, with respect to any stock option, restricted stock, restricted stock unit or other equity-related award, that the vesting of any such stock option, restricted stock, restricted stock unit or other equity-related award or any Benefit Plan shall accelerate or otherwise be affected by or result in any payment or funding in connection with any of the transactions contemplated by this Agreement (other than, in the case of clauses (i) through (iv) above, accelerated vesting as a result of a termination of employment or service upon or following the consummation of the transactions contemplated by this Agreement);
(e) neither it nor any of its Subsidiaries shall lease, license, transfer, exchange or swap, mortgage (including securitizations), or otherwise dispose of (whether by way of merger, consolidation, sale of stock or assets, or otherwise) any material portion of its assets, including the capital stock or other equity interests of its Subsidiaries, except for (i) dispositions of assets that, individually or in the ordinary course of business consistent aggregate with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases all other such dispositions, have fair market value of less than 7.5% of compensation relative to their compensation€300,000,000, bonus or pension, welfare or other benefits prior to such change, (Dii) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or transactions between it and any of its Subsidiaries, (E) take any action to accelerate the vesting direct or payment of compensation indirect Subsidiaries or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to transactions between such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(ivf) incur except for acquisitions (x) entered into on an arm’s length basis, (y) the expected gross expenditures and commitments (including the amount of any Indebtedness indebtedness assumed) of which do not exceed, in the aggregate, €300,000,000 and (z) which are not reasonably likely, individually or issue in the aggregate, to prevent or materially delay the satisfaction of the conditions set forth in Section 6.1(e), neither it nor any warrants of its Subsidiaries shall acquire or other rights agree to acquire (whether by merger, consolidation, purchase or otherwise) any Indebtedness, Person or assets;
(g) except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary usual course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or neither it nor any of its Subsidiaries shall (i) settle or compromise any material claims or litigation if such settlement or compromise would involve, individually or together with respect to all such Indebtedness (and Parent and its Subsidiaries, including, following the Distributionother settlements or compromises, the Retained Subsidiaries, shall not have payment of money by such party or its Subsidiaries in excess of $10,000,000 over the available insurance coverage at the time of such settlement or would involve any obligations in respect thereofadmission of material wrongdoing or any material conduct requirement or restriction by such party or its Subsidiaries or (ii) except as permitted pursuant to Section 5.1(c)(ii) or Section 5.1(c)(iii), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G5.1(d), modify, amend or terminate in any material respect any of its Material Contracts or waive, release or assign any material rights or claims thereunder in excess of $25,000,000 individually or in the aggregate;
(Hh) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial except to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced extent otherwise required by Law or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary usual course of business consistent with past practice, neither it nor any of its Subsidiaries shall make or change any material Tax election, adopt or change any material method of Tax accounting, file any material amended Tax Return, make a request for a Tax ruling (other than the Tax ruling request (demande d’agrément) with the French Ministry of Budget contemplated in Section 5.8(h) or any additional ruling request from the French Ministry of Budget having the purpose of obtaining the Publicis Intended French Tax Treatment or except as otherwise provided in this Agreement or any schedule to this Agreement) or enter into a closing agreement or advance pricing agreement in respect of a material amount of Taxes or settle or compromise any material audit, assessment, Tax claim or proceeding relating to Taxes, surrender any material right to claim a refund or offset of any Taxes, or change the classification of Omnicom or Publicis, as applicable, or any of their Subsidiaries for United States Tax purposes;
(vi) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of neither it nor any of its Retained Subsidiaries but not including shall permit any Intellectual Propertychange in its financial accounting principles, which is governed by Section 5.01(b)(vi))policies or practices, except for to the extent that any such changes in financial accounting principles, policies or practices shall be required by changes in GAAP (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course case of Omnicom) or $100,000,000 individually in any event or IFRS (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary case of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viiiPublicis);
(ixj) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company it nor any of its Retained Subsidiaries shall enter into any such transaction Contract that wouldgrants “most favored nation” status to any counterparty or any “non-compete” or similar Contract that, in any case, would materially restrict the business of the Holdco Group following the Omnicom Effective Time;
(k) except as permitted pursuant to Section 5.1(d), neither it nor any of its Subsidiaries shall enter into any Contract between itself, on the one hand, and any of its employees, officers, directors or affiliates, or any of their respective affiliates, on the other hand, if such Contract (x) is not entered into on an arm’s length basis or (y) involves payments to or from such party or its Subsidiaries in excess of $50,000,000;
(l) subject to Section 5.2, neither it nor any of its Subsidiaries shall take any action that would reasonably be expected to, prevent, materially delay to prevent or materially impair or delay the consummation of the Transactions;Mergers or any of the other transactions contemplated by this Agreement (including the satisfaction of the conditions set forth in Article VI); and
(xm) other than capital expenditures made neither it nor any of its Subsidiaries shall authorize or enter into an agreement, arrangement or understanding to do any of the foregoing set forth in accordance with Section 5.01(b)(vSections 5.1(a) and other than purchases and licenses through (l) if Omnicom or Publicis, as applicable, would be prohibited by the terms of film and television and production programming Sections 5.1(a) through (includinl) from doing the foregoing.
Appears in 1 contract
Sources: Business Combination Agreement (Omnicom Group Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to until the First Effective Time (unless Parent shall otherwise approve in writing, which such approval shall not to be unreasonably withheld, delayed or conditioned or delayed, and except as (1) otherwise expressly contemplated by this Agreement and except as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure LetterLaws), the Company shall, business of it and shall cause each of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in the ordinary course of business consistent with past practice, practice and the Company shall, it and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, shall use commercially their respective reasonable best efforts to preserve the Retained Business’ organization their business organizations intact and maintain the Retained Business’ its and their existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) associates. Without limiting the generality of, of the foregoing and in furtherance ofthereof, from the foregoingdate of this Agreement until the Effective Time, except (A) as otherwise contemplated or required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned in the case of clauses (v), (ix) and (xi) below), (C) as required by applicable Laws or any Governmental Entity or (D) as set forth in Section 4.1(a) of the Company Disclosure Letter, the Company covenants will not, and agrees as will not permit its Subsidiaries, to:
(i) adopt any amendments to itself and its charter or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries thatwith any other Person, sell or restructure, reorganize or completely or partially liquidate the Company or any of its Subsidiaries or directly or indirectly sell, lease, license, sell and leaseback, abandon, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, in whole or in part, any of its material properties, assets or rights or any interest therein, except for any such transactions solely among Subsidiaries of the Company;
(iii) acquire assets outside of the ordinary course of business from and after any other Person, other than acquisitions pursuant to Contracts in effect as of the date of this Agreement and prior disclosed to Parent;
(iv) issue, sell, pledge, dispose of, grant, transfer or encumber, or authorize the First Effective Time (unless Parent shall otherwise approve in writingissuance, which approval shall not be unreasonably withheldsale, conditioned pledge, disposition, grant, transfer or delayedencumbrance of, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3) otherwise expressly disclosed in Section 5.01(b) any shares of capital stock of the Company Disclosure Letter), the Company shall not and shall not permit or any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate the issuance of incorporation Shares upon the exercise of Company Options and the settlement of Restricted Shares and Restricted Stock Units (and dividend equivalents thereon, if applicable) outstanding on the date of this Agreement in accordance with their terms) or bylaws (or comparable governing documentsB) (other than amendments to the governing documents issuance of any shares of capital stock by a Subsidiary of the Company that would not prevent, delay to the Company or impair another Subsidiary of the Initial Merger or the other TransactionsCompany), (B) split, combine, subdivide or reclassify its outstanding securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible, exchangeable or exercisable securities (except for including the grant or award of additional Company Options, Restricted Shares or Restricted Stock Units);
(v) make any such transaction by a wholly owned subsidiary loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transactionCompany), ;
(Cvi) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company any other direct or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) indirect Subsidiary of the Company Disclosure LetterCompany);
(vii) reclassify, (D) enter into any agreement with respect to the voting of its capital stocksplit, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant the acquisition of any Shares tendered by current or former employees or directors in order to pay Taxes in connection with the forfeiture of, exercise of Company Options or withholding the settlement of Taxes with respect to, Company Restricted Shares or Restricted Stock Units);
(viii) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (other than a Subsidiary of the Company), Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company Stock Plans or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary and usual course of business (including for the avoidance of doubt borrowings and issuances of letters of credit under the Company’s revolving credit facility and the financing of insurance premiums);
(ix) make or authorize any capital expenditure in excess of $250,000 in the aggregate;
(x) make any material changes with respect to accounting policies or procedures, except as required by changes in effect on the date of this Agreement GAAP or a Governmental Entity;
(or as modified after the date of this Agreement in accordance with the terms of this Agreementxi) or (2) purchases, repurchases, redemptions settle any litigation or other acquisitions proceedings before a Governmental Entity unless the settlement solely consists of securities of any wholly owned Subsidiary of the Company a cash payment by the Company or any other wholly owned Subsidiary of the Company)its Subsidiaries not in excess of $100,000;
(iiA) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan practices, make, change or benefits provided under such Company Plan based on the cost on the date hereofrevoke any material Tax election, (B) other than in the ordinary course of business consistent with past practices, file or amend any Tax Return, (C) adopt or change a method of accounting in respect of Taxes, (D) consent to any extension or waiver of the limitations period applicable to a Tax Return, (E) surrender any right to request a material refund of Taxes or (F) settle or otherwise agree to a resolution of any material claim or assessment relating to Taxes;
(xiii) except for transactions among the Company and its Subsidiaries, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, in each case which is material to the Company and its Subsidiaries taken as a whole, other than equipment, inventory, supplies and other assets in the ordinary course of business and other than pursuant to Contracts in effect prior to the date of this Agreement;
(xiv) except as required pursuant to any Contracts in effect prior to the date of this Agreement, or any Benefit Plans in effect prior to the date of this Agreement or replacement Benefit Plans entered into after the date of this Agreement and prior to the Effective Time in the ordinary course of business, or as otherwise required by applicable Laws, (A) grant or provide any transaction severance or retention bonuses termination payments or benefits to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or other employee of the Company or any of its Subsidiaries, except in the ordinary course of business or consistent with past practice with respect or pursuant to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeexisting Contracts, (DB) increase the severance compensation or termination payments or benefits payable make any new equity awards to any director, officer, employee officer or other service provider employee of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business or consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement ofpractice, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiariesestablish, (D) (1) to the extent not drawn upon and payments adopt, terminate or materially amend any Benefit Plan, other than changes that are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business or consistent with past practice in a principal amount that do not materially increase the costs to exceed $250,000,000 in the aggregate at Company of any time outstandingsuch Benefit Plan; or
(xv) agree, (F) Indebtedness, the proceeds of which will be used authorize or commit to finance all or do any portion of the Dividend foregoing.
(and fees and expenses in connection therewithb) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) Parent shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company knowingly take or permit any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have take any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided action that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would could reasonably be expected to, prevent, materially likely to prevent or delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinMerger.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (Time, unless Parent shall otherwise approve in writing, which approval shall consent (such consent not to be unreasonably withheld, conditioned withheld or delayed), and except as otherwise expressly contemplated by this Agreement (1including that the Company and its Subsidiaries will not be required to act in a manner inconsistent with any representation, warranty, agreement, covenant, condition or other provision of this Agreement) or required by applicable LawLaws, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) business of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries toshall be conducted, use its reasonable best efforts to conduct the Retained Business in all material respects, in the ordinary course of business consistent with past practice, and the Company shalland its Subsidiaries, and at their expense, shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially their respective reasonable best efforts to preserve the Retained Business’ organization intact and their business organizations intact, maintain the Retained Business’ existing satisfactory relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessorslenders, employees and business associates distributors and others having other Persons with whom they have material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) relations and keep available the services of the Company their key officers and its Subsidiaries’ present employees and agents.
(b) employees. Without limiting the generality of, and in furtherance of, of the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior until the Effective Time, except (x) as otherwise contemplated or specifically permitted by this Agreement, (y) as Parent may consent (such consent not to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned withheld or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3z) otherwise expressly disclosed as set forth in Section 5.01(b6.1(a) of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws Organizational Documents;
(or comparable governing documentsii) (other than amendments a) authorize for issuance, issue or sell, pledge, dispose of or subject to any Lien or agree or commit to any of the governing documents foregoing in respect of, any shares of beneficial interest or shares of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares class of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary other equity interest of the Company or any Subsidiary or any options, warrants, convertible securities or other rights of any kind to acquire any such shares or any other equity interest, of the Company or (2) normal semiannual cash dividends any Subsidiary, other than the issuance of Shares upon exercise of Company Options, or the settlement of RSUs or Company Awards outstanding on the Common Stock date of this Agreement and except as described in permitted under Section 5.01(b)(i6.1(a)(vii); (b) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its capital stock securities or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than (1) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) equity equivalents except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent in connection with past practice that does not materially increase (i) the cost cashless exercise of such Company Plan or benefits provided under such Company Plan based on Options in accordance with the cost on the date hereofStock Plans, (Bii) grant the lapse of restrictions on Restricted Shares, or provide the settlement of RSUs or Company Awards, in each case, in order to satisfy withholding or exercise price obligations in accordance with the Stock Plans or Director Deferral Program, or (iii) the cancellation of the Company Options, Restricted Shares, RSUs and Company Awards pursuant to Section 4.3; (c) adjust, redeem, reclassify, combine, split, or subdivide any transaction shares of beneficial interest or retention bonuses to shares of any director, officer, employee class of capital stock or other service provider equity interest of the Company or any of its Subsidiaries; or (d) declare, (C) increase the compensationset aside, bonus make or pension, welfare pay any dividend or other benefits distribution, payable in cash, shares of beneficial interest, property or otherwise, with respect to any of the shares of beneficial interest or shares of any director, officer class of capital stock or employee other equity interests of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect for (i) cash dividends by any direct or indirect wholly-owned Subsidiary only to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equityother wholly-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into Subsidiary in the ordinary course of business consistent with past practice, (Eii) commercial paper issued in regular quarterly dividends on the ordinary course Shares (but not to exceed $0.63 per Share for each regular quarterly dividend) with declaration, record and payment dates reasonably consistent with the Company’s past practice for the comparable quarter, it being agreed that declarations of business dividends between the date hereof and the consummation of the Merger will provide that such dividend is not payable if the Merger is consummated prior to the relevant record date, (iii) dividends or distributions required under the applicable Organizational Documents, or (iv) dividends or distributions consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided Subsidiaries that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted are listed in Section 5.01 6.1(a)(ii) of the Company Disclosure Letter; provided;
(iii) acquire or agree to acquire (whether by merger, furtherconsolidation, that the Company shall consult with Parent prior to incurring Indebtedness under this clause acquisition of equity stock or assets or otherwise) any Person (G), (Hor division or assets thereof) Indebtedness assumed in connection or any real property from any other Person with a Sky Acquisition and refinancings value or replacements thereof on then prevailing market terms purchase price in excess of $10,000,000 individually or on terms substantially consistent $25,000,000 with or more beneficial respect to all such acquisitions in the Company and its Subsidiariesaggregate, taken as a whole, other than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior (a) acquisitions pursuant to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, Contracts in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company effect as of the date of this Agreement as described in Section 6.1(a)(iii) of the Company Disclosure Letter and (b) acquisitions of equity interests otherwise permitted under clause (ix) of this Section 6.1;
(iv) incur any indebtedness or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person (other than a wholly-owned Subsidiary) for indebtedness, except for: (a) indebtedness for borrowed money incurred under the Company’s existing credit facility or other existing similar lines of credit in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition business; (b) indebtedness to finance the costs and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof expenses incurred in connection with the funding transactions contemplated hereby; (c) refinancings of Star India Private Limited indebtedness becoming due and payable in accordance with their terms on terms and in such amounts reasonably acceptable to Parent; and (d) inter-company indebtedness among the Company and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing Subsidiaries in the ordinary course of business consistent with past practice;
(v) repurchase, repay, defease or pre-pay any indebtedness, except (a) repayments in the ordinary course of business, (b) payments made in respect of any termination or settlement of any interest rate swap or other similar hedging instrument relating thereto, or (c) prepayments, repayments of mortgage indebtedness secured by one or more Owned Real Properties in accordance with their terms, as such loans become due and payable or payment of indebtedness in accordance with its terms; or (except with respect to any Actions) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the Retained Businessordinary course of business consistent with past practice;
(vi) modify, amend, or terminate any Material Contract or enter into any new Contract that, if entered into prior to the date of this Agreement, would have been a Material Contract, in each case other than in the ordinary course of business consistent with respect past practice;
(vii) except (a) as set forth in Section 6.1(a)(vii) of the Company Disclosure Letter or (b) to acquisitions the extent required under any Benefit Plan as in effect on the date of businessesthis Agreement or as required by applicable Law, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (i) increase the compensation (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000bonus opportunities) or fringe benefits of any of its directors, executive officers or employees (B) except in the ordinary course of business consistent with past practice and with respect to employees who are not parties to a severance agreement, employment or change-in-control agreement), (ii) grant any severance or termination pay, other than nominal severance to terminated employees, (iii) make any new equity awards to any director, officer or employee, except with respect to new hires in the aggregate not in excess ordinary course of 120% of the amounts reflected business, which equity awards shall be treated in the Company’s capital expenditure budget for each of 2017same manner as the regular equity grants permitted to be made pursuant to, 2018 and 2019 set forth in described in, Section 5.01(b)(v6.1(a)(vii) of the Company Disclosure Letter, (iv) enter into or amend any employment, consulting, change-in-control or severance agreement or arrangement with any of its present or former directors, executive officers, or employees (except in the ordinary course of business consistent with past practice with respect to employees who are not directors, executive officers or parties to a severance agreement, employment or change-in-control agreement), (v) establish, adopt, enter into, freeze or amend in any material respect or terminate any Benefit Plan, take any action to accelerate entitlement to benefits under any Benefit Plan, or make any contribution to any Benefit Plan, other than contributions required by Law, other than in the ordinary course of business consistent with past practice, (vi) pay, accrue or certify performance level achievements at levels in excess of actually achieved performance in respect of any component of an incentive-based award, or take any affirmative action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, distribution, settlement or funding under any Benefit Plan, except as contemplated by the Benefit Plans as in effect on the date hereof, (vii) take any action with respect to salary, compensation, benefits or other terms and conditions of employment that would result in the holder of a change-in-control or similar agreement having “good reason” to terminate employment and collect severance payments and benefits pursuant to such agreement, (viii) terminate the employment of any holder of a change-in-control or similar agreement other than for “cause” (within the meaning of such agreement); (ix) take any action that would result in any Benefit Plan violating Section 409A of the Code; and (x) execute or amend any collective bargaining agreement or other obligation to any labor organization;
(viviii) with except as required by the SEC or changes in GAAP which become effective after the date of this Agreement, change in any material respect GAAP financial accounting principles or policies;
(ix) make any loans, advances or capital contributions to, or investments in, any Persons (other than (a) to or in wholly-owned Subsidiaries, (b) as required by any Contract in effect on the date hereof and described in Section 6.1(a)(ix) of the Company Disclosure Letter or (c) amounts up to $15,000,000 in the aggregate);
(x) make, authorize, or enter into any commitment for any capital expenditure (“Capital Expenditures”) other than (a) Capital Expenditures for items and in the amounts (other than immaterial changes) set forth in the Company’s current projections for Capital Expenditures as updated by Company’s management in the ordinary course of business (which projections, as so updated prior to the Retained Businessdate of this Agreement, is set forth on Section 6.1(a)(x) of the Company Disclosure Letter), together with up to $5,000,000 of additional Capital Expenditures as deemed appropriate by the Company, or in the Company’s 2009 budget (so long as such budget is generally consistent with the projections for 2008, or as reasonably approved by Parent), and (b) Capital Expenditures in the ordinary course of business and consistent with past practice necessary to repair and/or prevent damage to any of the assets or properties of the Company or any of its Subsidiaries as is necessary in the event of an emergency situation;
(xi) waive, release, assign, settle or compromise any Action for amounts greater than, $1,000,000 individually or $5,000,000 in the aggregate;
(xii) amend any term of any outstanding equity security or equity interest of the Company or any of its Subsidiaries;
(xiii) adopt or enter into a plan of complete or partial liquidation or dissolution or adopt resolutions providing for or authorizing such liquidation or dissolution;
(xiv) fail to use its reasonable best efforts to maintain in full force and effect the existing insurance policies or to replace such insurance policies with comparable insurance policies covering the Company, its Subsidiaries and their respective properties, assets and businesses or substantially equivalent policies;
(xv) except as required by applicable Law, (a) prepare or file any material Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method of accounting that is materially inconsistent with positions taken, elections made or methods of accounting used in preparing or filing similar Tax Returns in prior periods, (b) enter into any settlement or compromise of any material Tax liability, (c) file any material amended Tax Return, (d) change any annual Tax accounting period, (e) enter into any closing agreement relating to any material amount of Taxes or consent to any material claim or audit relating to Taxes, (f) surrender any right to claim any material Tax refund or (g) consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or its Subsidiaries;
(xvi) mortgage or pledge, or suffer to exist any Liens on, any Owned Real Property or other real property or interest therein, or any material assets other than (a) sales of properties, and at or above the price, identified in Section 6.1(a)(xvi) of the Company Disclosure Letter, and (b) Permitted Liens;
(xvii) transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon lease or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock by merger, consolidation, sale of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses assets or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiariesotherwise) with a fair market value not in excess of $50,000,000 individually if 15,000,000 in the transaction is aggregate with respect to all such transfers, licenses, sales, leases or other dispositions, provided that the foregoing shall not prohibit the Company and its Subsidiaries from (a) selling inventory in the ordinary course or $100,000,000 individually in any event of business consistent with past practice or (Bb) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiariestransferring, issueselling, deliver, sell, grant, transfer, leasing or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, disposing of any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued assets pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement any Contract that is in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value effect as of the date hereof;
(xviii) effectuate a “plant closing” or “mass layoff,” as these terms are defined in WARN or similar state or local Laws;
(xix) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding or similar Contract with respect to any joint venture, strategic partnership or alliance, which in each case, is material to either of the Business Units;
(xx) release or permit the release of any Person from, waive or permit the waiver of any right under, fail to enforce any provision of, or grant any consent or make any election under, any confidentiality, “standstill” or similar agreement for such acquisition); provided that neither to which the Company nor or any of its Retained Subsidiaries is a party or take any action to exempt any Person other than Merger Sub and its Affiliates from the restrictions on “business combinations” contained in Section 203 of the DGCL or the Company’s certificate of incorporation or bylaws, except, in each case, to the extent the Company Board shall enter into have determined in good faith, after consultation with its outside legal counsel, that failure to take such action would be inconsistent with its fiduciary duties under applicable Law, but in such case only after providing Parent with prior written notice of such determination;
(xxi) knowingly take any such transaction action that would, or would reasonably be expected toto (a) result in the failure of a condition set forth in Section 7.2(a) or Section 7.2(b), or (b) individually or in the aggregate, prevent, materially delay or materially impair impede in any material respect the consummation of the Transactions;Merger or the other transactions contemplated by this Agreement; or
(xxxii) enter into any agreement or otherwise make a commitment, to do any of the foregoing.
(b) Parent covenants and agrees that, prior to the Effective Time, Parent shall not knowingly take or permit any of its Affiliates to take any action that, individually or in the aggregate, is reasonably likely to (i) result in the failure of a condition set forth in Section 7.3(a), Section 7.3(b) or Section 7.3(c) or (ii) prevent, delay or impede in any material respect the consummation of the Merger or the other than capital expenditures made transactions contemplated by this Agreement.
(c) The Company and Parent acknowledge that nothing contained in accordance this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with Section 5.01(b)(v) the terms and other than purchases conditions of this Agreement, complete control and licenses of film supervision over its and television and production programming (includinits Subsidiaries’ respective operations.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution of this Agreement date hereof and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as (1otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter)Laws, the Company shall, business of it and shall cause each of its Subsidiaries toshall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use its their respective reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations substantially intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agents.
(b) associates. Without limiting the generality of, of the foregoing and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries thatthereof, from and after the date of this Agreement and prior to until the First Effective Time Time, except (unless A) as otherwise expressly required or expressly permitted by this Agreement, (B) as Parent shall otherwise may approve in writing, which writing (such approval shall not to be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) or (3C) otherwise expressly disclosed as set forth in Section 5.01(b) 6.1 of the Company Disclosure Letter), the Company shall will not and shall will not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than adopt or propose any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws or other applicable governing instruments;
(ii) merge or comparable governing documentsconsolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate its assets, operations or businesses or otherwise enter into any hold separate agreement or other agreement imposing material limitations on its business;
(iii) acquire assets or any securities of any business from any other Person in any transaction or series of related transactions, other than (A) acquisitions pursuant to Contracts in effect as of the date of this Agreement, (B) capital expenditures made in accordance with capital budgets included in Section 6.1(a)(iii) of the Company Disclosure Letter, (C) acquisitions with a value or purchase price in the aggregate of less than $500,000 or (D) acquisitions of inventory and other purchases in the ordinary course of business;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its Subsidiaries (other than amendments to the governing documents issuance of any shares by a wholly-owned Subsidiary of the Company that would not prevent, delay to the Company or impair the Initial Merger or the other Transactionsanother wholly-owned Subsidiary), (B) split, combine, subdivide or reclassify its outstanding securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, other than required issuances of shares of Company Common Stock upon the exercise of Company Stock Options outstanding as of the date of this Agreement;
(except for v) create or incur any such transaction by a wholly owned subsidiary Lien on any assets of the Company which remains a wholly or any of its Subsidiaries in amounts in excess of $1,000,000 in the aggregate;
(vi) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary after consummation of such transaction), the Company) in excess of $100,000 in the aggregate;
(Cvii) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise, with respect to any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a any direct or indirect wholly wholly-owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or to the Company any other direct or (2indirect wholly-owned Subsidiary) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) or enter into any agreement with respect to the voting of its capital stock;
(viii) reclassify, split, combine, subdivide or (E) purchaseredeem, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock;
(other than (1ix) pursuant to the forfeiture ofincur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units issue or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (sell any debt securities or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions warrants or other acquisitions rights to acquire any debt security of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Personits Subsidiaries, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: for (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken indebtedness for purposes of replacing, renewing or extending a broadly applicable material Company Plan borrowed money incurred in the ordinary course of business consistent with past practice that does practices not materially increase to exceed $5,000,000 in the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereofaggregate, (B) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (C) guarantees by the Company of indebtedness of wholly-owned Subsidiaries of the Company incurred in compliance with this Section 6.1 or (D) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $5,000,000 of notional debt in the aggregate;
(x) except as set forth in the capital budgets set forth in Section 6.1(a)(iii) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $500,000 in the aggregate during any 12 month period;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than Contracts that are entered into in the ordinary course of business and do not include any agreement or commitment to take any action described by Sections 6.1
(a) (i) through (x) or Sections 6.1(a)(xii) through (xviii);
(xii) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(xiii) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $100,000 in the aggregate (net of insurance coverage) or any disputed obligation or liability of the Company in excess of such amount;
(xiv) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $500,000 in the aggregate, other than, in each case, in the ordinary course of business;
(xv) make or change any Tax election, change an annual accounting period, file any material amended Tax Return, enter into any material closing agreement, waive or extend any statute of limitation with respect to Taxes, settle or compromise any material Tax liability, claim or assessment, or surrender any right to claim a refund of material Taxes;
(xvi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for product sales in the ordinary course of business, sales of obsolete assets or sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $500,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(xvii) except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement and set forth in Section 5.1(h)(i) of the Company Disclosure Letter, or as otherwise required by applicable Law, (A) grant or provide any transaction severance or retention bonuses termination payments or benefits to any director, officer, officer or employee or other service provider of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business, (CB) increase the compensation, bonus or pension, welfare welfare, severance or other benefits of of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except (other than with respect to the grant of new equity awards), in the case of employees who are not officers, in the ordinary course of business consistent with past practice with respect to practice, (1C) employees below establish, adopt, amend or terminate any Company Benefit Plan or amend the level terms of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such changeany outstanding equity-based awards, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan (including Benefit Plan, to the extent not already provided in any equity-based awards)such Company Benefit Plan, (FE) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP; or (GF) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(ivxviii) incur take any Indebtedness action or issue omit to take any warrants or other rights action that is reasonably likely to acquire any Indebtedness, except (A) result in any of the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial conditions to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, Merger set forth in Article VIII not being satisfied or (B) except with respect to prevent or materially delay the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date consummation of the Contract evidencing such IndebtednessMerger; or
(xix) agree, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) authorize or commit to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at do any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend foregoing.
(and fees and expenses in connection therewithb) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) Parent shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company knowingly take or permit any of its Subsidiaries with respect to such Indebtedness take any action that is reasonably likely to (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have i) result in any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial conditions to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 Merger set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall Article VII not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event being satisfied or (Bii) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, prevent or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinMerger.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after From the execution date of this Agreement and prior until the Effective Time or the earlier termination of this Agreement in accordance with its terms (the “Pre-Closing Period”), except (w) as set forth in SECTION 4.1(a) of the Company Disclosure Letter, (x) as expressly required by this Agreement, (y) to the First Effective Time extent consented to in writing by Parent (unless Parent shall otherwise approve in writing, which approval consent shall not be unreasonably withheld, conditioned delayed or delayed, and except conditioned) or (z) as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts Subsidiary to conduct the Retained Business business of it and its Subsidiary in the ordinary course of business in all material respects and, to the extent consistent with past practicetherewith, and the Company it shall, and shall cause each of its Subsidiaries Subsidiary to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use their commercially reasonable efforts to preserve the Retained Business’ organization intact their business organizations intact, maintain their assets and maintain the Retained Business’ existing relations properties and their relationships and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others other Persons having material business dealings with the Retained Business (including material content providersCompany or its Subsidiary, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its current officers, key managers and its Subsidiaries’ present other employees and agents.
(b) Without limiting consultants, all as necessary to conduct their business in the generality ofordinary course; provided, and in furtherance ofhowever, for the foregoingavoidance of doubt, the Company covenants and agrees as shall in no event be required to itself and its Subsidiaries that, from and after the date of this Agreement and prior increase compensation to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned employees or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including consultants or pay any special bonuses in connection with the Separation foregoing. Notwithstanding the generality of the foregoing, and subject to the Distributionexceptions set forth in clauses (w), (x), (y) or and (3) otherwise expressly disclosed in Section 5.01(bz) of the Company Disclosure Letter)immediately preceding sentence, the Company shall not not, and shall not permit any of its Subsidiaries Subsidiary to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A))amend, supplement or modify (A) amend its the certificate of incorporation or bylaws (or comparable formation and governing documents) of the Company or its Subsidiary or (B) any policy related to Personal Data or the operation or security of any material IT Assets in any manner that would materially weaken the security or protection thereof;
(ii) acquire any equity interests in, or assets of any business or division (whether by merger, consolidation or otherwise) from, any other Person (other than amendments to the governing documents of any Company or its Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other TransactionsCompany), except for purchases of inventory, services, products or materials in the ordinary course of business;
(Biii) merge or consolidate with any other Person or restructure, reorganize, dissolve, wind-up or completely or partially liquidate the Company or its Subsidiary or take any similar action;
(iv) issue, sell, pledge, dispose of, or subject to any Lien, any Equity Interests, except for issuances of Shares pursuant to Company Stock Options outstanding on the date of this Agreement under the Stock Incentive Plans;
(v) split, combine, subdivide subdivide, recapitalize, reclassify or reclassify its outstanding shares effect any similar change in capitalization of capital stock any of the Equity Interests;
(except for vi) declare, accrue, set aside, establish a record date for, or pay any such transaction by a wholly owned subsidiary dividends on, or make any other distributions in respect of, the Equity Interests of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (C) declare, set aside or pay any dividend or distribution payable other than those paid in cash, stock or property (or any combination thereof) in respect of any shares of its capital stock (except for (1) any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the Company to another direct or indirect wholly owned Subsidiary of the Company or cash prior to the Company or Reference Time);
(2vii) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem or otherwise acquire any shares of its the Equity Interests, except for redemptions, purchases or acquisitions pursuant to the exercise or settlement of Company Stock Options or the exercise of any contractual repurchase rights existing on the date of this Agreement;
(viii) incur, suffer to exist, guarantee or otherwise become liable with respect to any Indebtedness, except for short term working capital stock borrowings incurred in the ordinary course of business under the Credit Facilities;
(ix) divest, sell, convey or transfer, or create or incur any securities convertible or exchangeable into or exercisable for any shares of its capital stock Lien (other than Permitted Liens) on, any of the assets of the Company or its Subsidiary, other than sales of products or non-exclusive licenses granted by the Company or its Subsidiary in the ordinary course of business;
(x) (A) increase in any respect the compensation or benefits of any (1) Company Employee other than as expressly required pursuant to the forfeiture of, applicable Law or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of Company Plans in effect on the date of this Agreement that are set forth in SECTION 4.1(a)(x)(A) of the Company Stock Plans Disclosure Letter or (2) Company Employees (other than any Company Employee whose salary is equal to or less than $100,000 in the ordinary course of business consistent with past practice), (B) establish, adopt, enter into, modify, supplement, amend or terminate any Company Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Plan if it were in existence as of the date of this Agreement (other than as expressly required by the terms of any Company Plan as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Companythat has been made available to Parent);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under to fund any benefit or payment to any Company Plan Employee, except as contemplated pursuant to SECTION 2.4 of this Agreement or (D) pay or agree to pay any pension, retirement allowance or other employee benefit, including any severance, change in control, retention, transaction or termination payment to any Company Employee other than those included as Transaction Expenses (as contemplated pursuant to SECTION 4.7(d) of this Agreement) as required by law or pursuant to the terms of Company Plans in effect on the date of this Agreement that are set forth in SECTION 4.1(a)(x)(D)(2) of the Company Disclosure Letter, (E) grant any equity or equity-based awards)awards to, or discretionarily accelerate the vesting or payment of any such awards held by any Company Employee, (F) hire any executive-level employee or (G) terminate any executive-level employee other than for cause;
(xi) other than in the ordinary course of business, make, change or revoke any actuarial Tax election, file any amended Tax Return, settle or other assumptions used to calculate funding obligations compromise any Tax liability, enter into any closing agreement with respect to any Company Plan Tax or surrender any right to claim a Tax refund, consent to any extension or waiver of the limitation period applicable to any Taxes, or change the manner Company’s or its Subsidiary’s method of accounting for Tax purposes, unless required by applicable Law;
(xii) except as required by GAAP or applicable Law, make any changes to its accounting policies or principles;
(A) other than in which contributions the ordinary course of business, enter into any Contract that would have been a Company Material Contract pursuant to such plans are made or SECTION 3.1(q)(i) had it been entered into prior to the basis on which such contributions are determined date of this Agreement or (GB) forgive terminate, or materially amend, or waive any loans material rights under, any Company Material Contract, except for any such termination upon the expiration of such Company Material Contract in accordance with its terms; provided in each case that the Company and its Subsidiary shall be permitted to directorsextend, officers renew or employees replace any Company Material Contract with one or more Contracts on substantially similar terms;
(xiv) except for the capital expenditures expressly approved in the Company capital expenditures budget set forth in SECTION 4.1(a)(xiv) of the Company Disclosure Letter, make or authorize any of its Subsidiariescapital expenditure;
(ivxv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) as provided in SECTION 4.17 or (B) with respect to the settlement of an Action if such settlement imposes no liability or obligation on the Company other than the payment of money damages that do not exceed the amounts accrued in connection with the MSA Litigation on the unaudited consolidated balance sheet of the Company and its Subsidiary as of March 31, 2017 with respect to such Action, or $15,000 individually or $45,000 in the aggregate with respect to other Actions, (1) cancel, compromise, settle or agree to settle any material claims, (2) waive or release any material right with respect to any Action or (3) commence or settle any Action;
(xvi) (A) delay or postpone any payment of any accounts payable or other payables or expenses from the date such payments would be made consistent with past practice, (B) accelerate or delay the collection of accounts receivable in advance of or beyond the date when the same would have been collected in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among make any material change in the Company and conduct of its wholly owned Subsidiariesbusiness, or any material change in the methods of purchase, sale, lease, management, marketing, promotion or operation of its business;
(Dxvii) invest in, make any capital contributions to, or otherwise acquire the securities or other equity interests of, any Person that is not a Subsidiary of the Company;
(xviii) form any new Subsidiary;
(xix) (1A) cancel or fail to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at renew any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company Insurance Policies or any fail to maintain commercially reasonable levels of its Subsidiaries with respect to insurance coverage provided by such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;
(v) with respect to the Retained Business, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make or commit to any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) Insurance Policies or (B) in fail to maintain its insurance coverage, pay premiums, and report claims to the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letterinsurance carrier upon their occurrence;
(vixx) with respect act, or fail to the Retained Businessact, transferin any manner that would (A) reasonably be expected to result in any loss, lease, license, sell, assign, let lapse, abandonabandonment, cancel, mortgage, pledge, place a Lien upon invalidity or otherwise dispose unenforceability of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses Property owned or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among purported to be owned by the Company and or its wholly owned Retained Subsidiaries)Subsidiary, (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among cause the Company and the Retained Subsidiariesor its Subsidiary to be obligated to place any proprietary source code in escrow;
(viiixxi) except with respect fail to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, pay any shares of its capital stock or creditor any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights material amount owed to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii)creditor when due;
(ixxxii) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such agreement, arrangement or transaction that wouldwith any of their respective directors, officers, or would reasonably be expected toStockholders (or with any relative, preventbeneficiary, materially delay spouse or materially impair the consummation Affiliate of such Persons); or
(xxiii) agree, authorize, resolve, commit or consent to do any of the Transactions;foregoing.
(xb) other than capital expenditures made Nothing contained in accordance this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with Section 5.01(b)(v) the terms and other than purchases conditions of this Agreement, complete control and licenses of film supervision over its and television and production programming (includinits Subsidiary’ respective operations.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees Except (i) as to itself and its Subsidiaries thatrequired by this Agreement, from and after the execution of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except ii) as (1) required by applicable Law, (2iii) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distribution such approval not to be unreasonably withheld, delayed or conditioned), (iv) as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in set forth on Section 5.01(a6.1(a) of the Company Disclosure Letter)Schedule, or (v) to the extent necessary to comply with the obligations set forth in any Contract to which the Company or any of its Subsidiaries is a party in effect on the date of the Agreement, from the date of this Agreement until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company will, and will cause its Subsidiaries to, use its and their reasonable best efforts to conduct their businesses in the ordinary course of business and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its and their reasonable best efforts to conduct the Retained Business in the ordinary course of preserve their business consistent with past practice, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization organizations intact and to maintain the Retained Business’ existing relations and goodwill relationships with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees licensees and business associates and others other Persons having material business dealings relationships with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agentsit.
(b) Without limiting the generality ofExcept as required or expressly contemplated by this Agreement, and in furtherance of, the foregoing, the Company covenants and agrees (w) as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2x) expressly required as approved in writing by the Transaction Documents Parent (including in connection with the Separation and the Distributionsuch approval not to be unreasonably withheld, delayed or conditioned), (y) or (3) otherwise expressly disclosed in as set forth on Section 5.01(b6.1(b) of the Company Disclosure Letter)Schedule, or (z) to the extent necessary to comply with the obligations set forth in any Material Contract to which the Company shall not and shall not permit or any of its Subsidiaries is a party in effect on the date of this Agreement, from the date of this Agreement until earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time, the Company will not, and will cause its Subsidiaries not to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than amend or adopt any change in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary Organizational Documents of the Company that would not preventor its Subsidiaries;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, delay or impair restructure, reorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement imposing material changes or restrictions on the Initial Merger assets, operations or business of the other Transactions)Company or any of its Subsidiaries;
(iii) issue, (B) splitgrant, combinesell, subdivide pledge, dispose of or reclassify its outstanding encumber, or authorize the issuance, grant, sale, pledge, disposition or encumbrance of, any shares of capital stock (except for any such transaction by a wholly owned subsidiary of the Company which remains a or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case, other than (A) any issuance, sale, grant or transfer of Shares pursuant to exercise or settlement of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms in effect on the date hereof, and (B) incurrence of any Permitted Liens;
(iv) make any loans, advances or capital contributions to any Person in excess of $25,000 individually or $100,000 in the aggregate (other than (A) to the Company or any of its wholly owned Subsidiary after consummation Subsidiaries, and (B) in connection with capital leases and extensions of such transactioncredit terms to customers in each case in the ordinary course of business);
(v) other than the July Dividend, (C) declare, set aside aside, make or pay any dividend or distribution other distribution, payable in cash, stock stock, property or property (or otherwise with respect to any combination thereof) in respect of any shares of its capital stock (stock, except for (1) any dividends or other distributions paid by a direct or indirect any wholly owned Subsidiary of the Company to another direct the Company or indirect to any other wholly owned Subsidiary of the Company Company;
(vi) reclassify, split, combine, subdivide or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock (except for (A) any such transaction by a wholly owned Subsidiary of the Company and (B) acquisitions of Shares in connection with withholding in respect of Company Equity Awards), or payment of the exercise price in respect of Company Options, in each case, outstanding as of the date of this Agreement pursuant to its terms or granted thereafter not in violation of this Agreement;
(vii) create, incur, assume or guarantee any Indebtedness for borrowed money, letters of credit or guarantees of the same, except for (A) borrowings under the Company Credit Agreement (as in effect as of the date hereof or as amended, restated, modified, supplemented or refinanced in accordance with this Agreement), (B) letters of credit, guarantees or credit support provided by the Company or any of its Subsidiaries in the ordinary course of business, (C) any Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries, and (D) any capital leases entered into in the ordinary course of business;
(viii) incur or commit to any capital expenditure or expenditures other than in the ordinary course of business;
(ix) other than in the ordinary course of business or in connection with any matter to the extent such matter is permitted by any other clause of this Section 6.1(b), (A) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement or (B) amend or terminate any Material Contract in a manner adverse to the Company (other than expirations of any such Material Contract in accordance with its terms) or otherwise waive, release or assign any material rights, claims or benefits of the Company or any of its Subsidiaries under any Material Contract;
(x) make any changes with respect to financial accounting policies or procedures (other than immaterial changes in the ordinary course of business), except as required by Law or by U.S. GAAP or policy, rules or interpretations with respect thereto by any Governmental Authority or quasi-Governmental Authority with jurisdiction over the Company or its Subsidiaries;
(xi) settle or offer to settle any Action, other than any Tax claim, notice, audit, investigation, assessment or other proceeding with respect to Taxes (which shall be governed by clause (xvii)), for an amount in excess of $500,000 individually or $1,000,000 in the aggregate, other than any settlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries is fully covered and paid by insurance coverage maintained by the Company or any of its Subsidiaries;
(xii) sell, acquire, lease or sublease any material assets or properties (including any material real property, but other than Owned Intellectual Property which instead is the subject of Section 6.1(b)(xiii) below) other than (1i) in the ordinary course of business, (ii) in replacement of existing assets or properties, (iii) (A) substantially in accordance with the Company’s operating budget for fiscal year 2024 provided to Parent prior to the date hereof, or (B) in accordance with the Company’s operating budget for fiscal year 2025, (iv) acquisitions or sales of inventory, (v) disposals of property at the end of its useful life or disposals of obsolete or expired property, or (vi) sales, acquisitions, leases or subleases between or among the Company and any of its Subsidiaries;
(xiii) sell, assign, transfer, license, abandon, cancel, permit to lapse, pledge, encumber, fail to renew, maintain or pursue filed applications for or otherwise dispose of any material Owned Intellectual Property, other than (A) the grant of non-exclusive licenses in the ordinary course of business, (B) to customers or suppliers in their capacity(ies) as such (x) in the ordinary course of business or (y) pursuant to the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms any Material Contract existing as of the Company Stock date of this Agreement or (C) when in the Company’s reasonable business judgment, the benefits of retaining such Owned Intellectual Property are outweighed by the burdens of doing so;
(xiv) except as required by Benefit Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establishincrease the amount or accelerate the vesting, adoptpayment or funding of the compensation or other benefits payable or provided to the Company’s or any of its Subsidiaries’ current or former officers, amend directors, individual service providers or terminate any material Company Plan or amend the terms of any outstanding equity-based awards employees, other than any such action taken for purposes of replacing, renewing increases in compensation or extending a broadly applicable material Company Plan benefits in the ordinary course of business consistent with past practice that does respect to employees at the level of Vice President or below and not materially exceeding a year-over-year increase of 3% in the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, aggregate; (B) grant or provide enter into any transaction cash or equity or equity-based incentive, bonus, employment, change of control, severance or retention bonuses to agreement with any current or former officer, director, officer, employee or other individual service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries; (C) establish, except adopt, enter into or amend any collective bargaining agreement, Benefit Plan or arrangement that would be a Benefit Plan if in effect on the ordinary course date of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at this Agreement; or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting vesting, funding or payment of compensation any compensatory arrangement;
(xv) negotiate or benefits under enter into any Company Plan (including Labor Agreement or recognize or certify any equity-based awards)labor union, (F) change labor organization, works council or group of employees as the bargaining representatives for any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(ivxvi) incur acquire any Indebtedness capital stock in, or issue any warrants business line or all or a material portion of the assets constituting any business, corporation, partnership, association, joint venture, or other rights to acquire entity or other business organization in any Indebtednesstransaction that involves consideration valued in excess of $500,000, individually or $1,000,000 in the aggregate (including any earn-out payments or other deferred or contingent consideration payable in connection with any such transaction), including by merger, consolidation, purchase of stock or assets or otherwise, except for (A) transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries, or (B) acquisitions of assets or inventory in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, business;
(xvii) other than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement of, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practicebusiness, make, revoke or change any material Tax election, make any material change to any annual Tax accounting period, adopt or change any material method of Tax accounting, amend any material Tax Returns or file any claims for material Tax refunds, waive or extend any statute of limitations in respect of a period within which an assessment or reassessment of material Taxes may be issued (E) commercial paper issued other than any extension pursuant to an extension to file any Tax Return obtained in the ordinary course of business consistent with past practice in business), enter into any material closing agreement, enter into a principal amount not Tax sharing agreement, Tax indemnification agreement, Tax allocation agreement or similar contract or arrangement, settle any material Tax claim, audit or assessment or surrender any right to exceed $250,000,000 in the aggregate at any time outstandingclaim a material (x) Tax refund, (Fy) Indebtednessoffset or (z) other reduction in Tax liability;
(xviii) license, the proceeds of which will be used to finance all escrow, or otherwise grant any portion of the Dividend (and fees and expenses in connection therewith) rights to, any material Owned Source Code or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at disclose any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of material trade secrets owned or processed by the Company or any of its Subsidiaries (except to customers or service providers of, or Persons with respect to such Indebtedness (and Parent and its Subsidiariesprofessional, including, following the Distributionbusiness or commercial relationships with, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings Company or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement Subsidiaries in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior subject to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practiceconfidentiality obligations);
(vxix) with respect adopt or enter into a plan of complete or partial liquidation or dissolution or voluntarily file for bankruptcy or similar proceeding;
(xx) fail to use reasonable efforts to keep in full force and effect insurance comparable in amount and scope to coverage currently maintained;
(xxi) take any action, or knowingly fail to take any action, where such action or failure to act would reasonably be expected to prevent the Retained BusinessMerger and any other transactions contemplated by this Agreement from qualifying for the Intended Tax Treatment; or
(xxii) agree, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;foregoing.
(vic) with respect Subject to the Retained Businessterms of this Agreement, transferincluding Section 6.5 and Section 6.13, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on after the date of this Agreement in accordance with and prior to the existing terms Effective Time, none of such awards and Parent, Merger Sub, the Company Stock Plans, (B) Investment Preferred Stock (as defined in Rollover Stockholders or the Bridge Facility) Equity Investors shall take or (C) by wholly owned permit any of their respective Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable enter into or exercisable for, or any options, warrants or other rights agree to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction agreement that would, or would reasonably be expected to, to prevent, materially delay impair or materially impair delay the consummation of the Transactions;Merger or the satisfaction of any of the closing conditions thereto.
(xd) other than capital expenditures made Nothing contained in accordance this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company and its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with Section 5.01(b)(v) the terms and other than purchases conditions of this Agreement, complete control and licenses of film supervision over its and television and production programming (includinits Subsidiaries’ respective operations.
Appears in 1 contract
Interim Operations. (a) The Except (i) as set forth in Section 6.1(a) of the Company covenants and agrees Disclosure Letter, (ii) as expressly contemplated or permitted by this Agreement, (iii) as may be required to itself and its Subsidiaries that, from and after comply with applicable Law or any Order or (iv) with the execution prior written consent of this Agreement and prior to the First Effective Time Parent (unless Parent shall otherwise approve in writing, which approval consent shall not be unreasonably withheld, conditioned delayed or delayedconditioned, and except as (1) required it being agreed by applicable Law, (2) expressly required Parent that its consent shall be deemed to have been given if Parent does not object in writing to a written request for such consent within five Business Days after such request for consent is delivered by the Transaction Documents (including in connection with Company), during the Separation period from the date of this Agreement until the earlier of the Effective Time and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed date of termination of this Agreement in accordance with Section 5.01(a) of the Company Disclosure Letter)9.1, the Company shall, and shall cause each of its Subsidiaries to, use conduct its reasonable best efforts to conduct the Retained Business respective business in all material respects in the ordinary course of business consistent with past practice, practice and the Company shall, and that it shall cause each of use its Subsidiaries to, solely to the extent related to the Retained Business, subject to compliance with the specific matters set forth below, use commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill its current relationship with Governmental Entitiesits suppliers, manufacturers, distributors, customers, suppliersbusiness associates, distributors, licensors, creditors, lessors, executives and other key employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company and its Subsidiaries’ present employees and agentsGovernmental Entities.
(b) Without limiting the generality of, and Except (i) as set forth in furtherance of, the foregoing, Section 6.1(b) of the Company covenants and agrees Disclosure Letter, (ii) as expressly contemplated or permitted by this Agreement, (iii) as may be required to itself and its Subsidiaries thatcomply with applicable Law or any Order, from and after or (iv) with the date prior written consent of this Agreement and prior to the First Effective Time Parent (unless Parent shall otherwise approve in writing, which approval consent shall not be unreasonably withheld, conditioned delayed or delayedconditioned, and which determination it being agreed by Parent that its consent shall take into account the Company Overview Presentation, and except as (1) required by applicable Law, (2) expressly required be deemed to have been given if Parent does not object in writing to a written request for such consent within five Business Days after such request for consent is delivered by the Transaction Documents (including in connection with Company), during the Separation period from the date of this Agreement until the earlier of the Effective Time and the Distribution) or (3) otherwise expressly disclosed date of termination of this Agreement in accordance with Section 5.01(b) of the Company Disclosure Letter)9.1, the Company shall not not, and shall not permit any of its Subsidiaries to:
(i) except with respect to SpinCo and the SpinCo Subsidiaries (other than in the case of clause (A)), (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not preventadjust, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock or the capital stock of any of its Subsidiaries; (except for any such transaction by a wholly owned subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction), (CB) declare, set aside authorize or pay any dividend or make any other distribution payable in cash, stock or property (or any combination thereof) in respect of the shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock (except for (1) any dividends dividend or distributions paid other distribution by a direct or indirect wholly owned Subsidiary of the Company to the Company or another direct or indirect wholly owned Subsidiary of the Company Company); (C) directly or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter)indirectly redeem, (D) enter into any agreement with respect to the voting of its capital stock, or (E) purchase, repurchase, redeem purchase or otherwise acquire any shares of its capital stock or any securities or obligations convertible into or exchangeable into or exercisable for any shares of its capital stock (other than except for the acquisition of Company Common Stock (1) pursuant tendered by employees or former employees in connection with a cashless exercise of Company Options or in order to the forfeiture ofpay taxes with respect to equity-based awards, or for the Company to satisfy withholding obligations in respect of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Unitssuch taxes, in each case in accordance connection with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (Options or as modified after the date of this Agreement in accordance with the terms of this Agreementother equity-based awards) or (2) purchasesin connection with the forfeiture of equity-based awards granted pursuant to the Company Equity Plans); or (D) except for transactions solely between the Company and its Subsidiaries, repurchasesor between Subsidiaries of the Company, redemptions issue, deliver, sell, pledge, dispose of, grant, award or encumber any shares of capital stock, ownership interests or voting securities, or any options, warrants, convertible securities or other acquisitions of securities rights of any wholly owned Subsidiary kind to acquire or receive any shares of the Company by capital stock, any other ownership interests or any voting securities (including restricted stock units, stock appreciation rights, phantom stock or similar instruments), of the Company or any of its Subsidiaries (except for issuances (1) of shares of Company Common Stock upon the exercise or settlement of Company Options, options under the Company ESPP or other wholly owned Subsidiary equity-based awards, in each case, that are outstanding as of the Companydate hereof; (2) pursuant to the Rights Plan, (3) required to be made by virtue of the consummation of the Merger; or (4) required to be made pursuant to this Agreement);
(ii) merge sell, transfer, mortgage, encumber, dispose of or consolidate with otherwise subject to any Lien (other Personthan a Permitted Lien) any of its material assets or material properties (other than to a wholly owned Subsidiary), by merger, consolidation, asset sale or other business combination (including formation of a joint venture) or cancel, release or assign any material Indebtedness or claim, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company liquidate, in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or pension, welfare or other benefits of any director, officer or employee of the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with respect to (1) employees below the level of Executive Vice President and (2) employees at or above the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, (D) increase the severance or termination payments or benefits payable to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, (E) take any action to accelerate the vesting or payment of compensation or benefits under any Company Plan (including any equity-based awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or (G) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtednesseach case, except (A) in the ordinary course of business consistent with past practice in a principal amount not (which for the avoidance of doubt and without limitation of the foregoing shall be deemed to exceed $400,000,000 include the sale or other disposition of supply, inventory or trading stock in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than existing Indebtedness, and with a maturity date no more than 10 years after the date ordinary course of the Contract evidencing such Indebtednessbusiness), (B) except with respect to the Bridge Facility, in replacement of, dispositions of obsolete or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtednessworthless assets, (C) intercompany Indebtedness among the Company sales of receivables and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into other assets in the ordinary course of business consistent with past practice, (D) sales of immaterial assets for a purchase price of $10,000,000 or less in any single case or $25,000,000 in the aggregate; and (E) commercial paper issued leases and subleases of real property owned by the Company or any Company Subsidiary and leases of real property under which the Company or any Company Subsidiary is a tenant or a subtenant and voluntary terminations or surrenders of such leases;
(iii) make any acquisition, by purchase or other acquisition of stock or other equity interests, by merger, consolidation, asset purchase or other business combination, or by contributions to capital, or make any material purchases of any property or assets (including material Intellectual Property) in or from any other Person other than a wholly owned Subsidiary of the Company, or make any loan to any Person, except (A) as expressly required by the terms of any Contract in force on the date of this Agreement, (B) as otherwise permitted by this Section 6.1(b); (C) for portfolio acquisitions or Intellectual Property licensing in the ordinary course of business consistent with past practice; (D) for foreclosures or acquisitions of control in a fiduciary, agent or similar capacity or in satisfaction of debts previously contracted in good faith or pursuant to written contracts or agreements entered into prior to the date hereof; and (E) other acquisitions in the ordinary course of business consistent with past practice and, in a principal any case, involving consideration in an aggregate amount not to exceed in excess of $250,000,000 25,000,000;
(iv) enter into, renew, extend, amend, waive any material rights under or terminate any Contract that is or would constitute a Material Contract, in each case other than in the aggregate at ordinary course of business;
(v) other than as required by any time outstandingContract in effect on the date hereof (including, without limitation, this Agreement and the Company Benefit Plans) or applicable Law, (FA) Indebtednessincrease, or commit to increase, the proceeds salary, wages, benefits, bonuses or other compensation or severance payable to any of which will its current or former directors, officers or other employees, other than salary or wage increases made in the ordinary course of business, consistent with past practice, to employees who receive annual compensation of less than $250,000, (B) amend, establish, enter into or terminate any Company Benefit Plan (or arrangement that would be used a Company Benefit Plan if in existence on the date hereof) or collective bargaining or similar agreement other than amendments to finance all the Company health and welfare plans that are not material, (C) accelerate the vesting of any stock options or other stock-based compensation or (D) hire any director or employee with annual base compensation of $200,000 or more;
(vi) amend the Company Charter or Company By-Laws or amend in any material respect the certificate of organization, by-laws or any portion other organizational documents of the Dividend any Company Subsidiary;
(and fees and expenses in connection therewithvii) incur any Indebtedness for borrowed money, issue any debt securities or assume, guarantee or endorse or otherwise become responsible for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of another Person, except, in each case, (A) intercompany guarantees or intercompany “keep well” or other agreements to maintain any financial statement condition of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof)Company Subsidiary, (GB) Indebtedness under the Bridge Facility, refinancings or replacements thereof and letters of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereof, in each case, so long as the aggregate principal amount thereof does not exceed $2,500,000,000, (J) hedging in compliance with the hedging strategy of the Company as of the date of this Agreement credit issued in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposes; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) abovebusiness, (KC) Indebtedness and replacements and refinancings thereof incurred through the revolving credit facility under the Credit Agreement (including in connection with the funding respect of Star India Private Limited and its Subsidiaries; provided that the letters of credit), (D) Indebtedness having an aggregate principal amount outstanding that is not in excess of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, 5,000,000 and (LE) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice, provided that, in the case of clauses (D) and (E), such Indebtedness shall be prepayable without any premium, penalty or similar cost;
(vviii) with respect to except in the Retained Business, other than with respect to acquisitions ordinary course of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x)business, make or commit change any material Tax election, settle or compromise any material Tax liability of the Company or any of its Subsidiaries, file any material amendment to an income or other material Tax Return, or waive any statute of limitations in respect of Taxes except as required by Law;
(ix) make any material changes in its accounting methods or method of Tax accounting, practices or policies, except as may be required under GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization;
(x) enter into, renew or amend in any material respect any transaction, Contract, arrangement or understanding between the Company or any Subsidiaries, on the one hand, and any Affiliate of the Company (other than any of the Company’s Subsidiaries), on the other hand, of the type that would be required to be disclosed under Item 404 of Regulation S-K promulgated under the Exchange Act;
(xi) make or authorize capital expenditures other than except (A) as budgeted in connection with the repair or replacement of facilitiesCompany’s current plan approved by the Company Board that was made available to Parent prior to the date hereof, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries otherwise in an amount not to the Company exceed $3 million; or
(xii) agree to, or to make any other wholly owned Subsidiary commitment to, take any of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of actions prohibited by this Section 5.01(b)(viii6.1(b);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includin.
Appears in 1 contract
Sources: Merger Agreement (Par Pharmaceutical Companies, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, from and after the execution date of this Agreement and prior to the First Effective Time (unless Parent shall otherwise approve in writing, writing in advance (which approval shall not be unreasonably withheld, conditioned delayed or delayedconditioned)), and except as (1) otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation its business and the Distribution or as contemplated by the Final Step Plan) or (3) otherwise expressly disclosed in Section 5.01(a) of the Company Disclosure Letter), the Company shall, and shall cause each business of its Subsidiaries to, use its reasonable best efforts to conduct the Retained Business shall be conducted in all material respects in the ordinary course of business consistent with past practiceOrdinary Course and, and the Company shall, and shall cause each of its Subsidiaries to, solely to the extent related consistent therewith, it and its Subsidiaries shall (i) preserve their business organizations in good standing pursuant to the Retained Business, subject to compliance with the specific matters set forth below, applicable Law and (ii) use their respective commercially reasonable efforts to preserve the Retained Business’ organization intact and maintain the Retained Business’ existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, licensors, creditors, lessors, employees and business associates and others having material business dealings with the Retained Business (including material content providers, studios, authors, producers, directors, actors, performers, guilds, announcers and advertisers) and keep available the services of the Company its and its Subsidiaries’ respective present officers, employees and agents, except as otherwise expressly required by this Agreement or as required by a Governmental Entity or applicable Law, provided that no action by the Company with respect to matters permitted by any provision of clauses (i)-(xxii) of Section 7.1(b) below shall be deemed a breach of the obligations under this sentence unless such action would constitute a breach of such other provision.
(b) Without limiting the generality of, and in furtherance of, the foregoing, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to until the First Effective Time Time, except as otherwise expressly (unless Parent shall otherwise approve A) contemplated by this Agreement, (B) required by a Governmental Entity or applicable Law, (C) approved in writing, writing in advance (which approval shall not be unreasonably withheld, conditioned delayed or delayed, and which determination shall take into account the Company Overview Presentation, and except as (1conditioned) required by applicable Law, (2) expressly required by the Transaction Documents (including in connection with the Separation and the Distribution) Parent or (3D) otherwise expressly disclosed set forth in Section 5.01(b7.1(b) of the Company Disclosure Letter), the Company shall not and shall not permit any of its Subsidiaries to:
(i) except adopt or propose any change in (x) the Company’s Organizational Documents or (y) any Subsidiary’s Organizational Documents;
(ii) merge or consolidate itself or any of its Subsidiaries with respect to SpinCo and the SpinCo Subsidiaries (any other than in the case of clause (A))Person, (A) amend its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any Subsidiary of the Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its outstanding shares of capital stock (except for any such transaction by a transactions among its wholly owned subsidiary Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(iii) (A) acquire (1) (by merger, consolidation or acquisition of stock or assets) any other Person or (2) to the Company which remains a wholly owned Subsidiary after consummation extent in excess of such transaction$5,000,000 in the aggregate, any material equity in any other Person therein or (B) enter into any joint venture, legal partnership or similar arrangement (other than commercial agreements with partners in the Ordinary Course that do not involve the formation of an entity with any third Person or require equity investing);
(iv) except as otherwise permitted under clause (xvii) below and except for issuances under the ESPP authorized under Section 3.5(c), (C) declareissue, set aside sell, pledge, dispose of, grant, transfer, encumber, or pay authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or Encumbrance of, or otherwise enter into or amend any dividend Contract or distribution payable in cashunderstanding with respect to the voting of, stock or property (or any combination thereof) in respect of any shares of its capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or Company Equity Awards or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities (other than the issuance of shares (A) by its wholly owned Subsidiary to it or another of its wholly owned Subsidiaries, (B) in respect of Company Warrants and Company Equity Awards, in each case outstanding as of the date hereof and issued in accordance with their terms in effect as of the date hereof and, as applicable, the Stock Plan or (C) under the ESPP);
(v) create or incur any Encumbrance (other than a Permitted Encumbrance or as otherwise permitted by Section 7.1(b)(x));
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company and any of its wholly owned Subsidiaries) in excess of $250,000 in the aggregate;
(vii) make any loans or advances to, guarantees for the benefit of, or enter into any other material transaction with any Company Employee or Affiliates other than advances for business, travel-related, relocation or other similar expenses in accordance with currently existing Company policy;
(viii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or other equity or voting interest (except for (1) any dividends or distributions paid by a any direct or indirect wholly owned Subsidiary of the Company to another it or to any other direct or indirect wholly owned Subsidiary of the Company Subsidiary) or to the Company or (2) normal semiannual cash dividends on the Common Stock as described in Section 5.01(b)(i) of the Company Disclosure Letter), (D) enter into any agreement with respect to the voting of its capital stock;
(ix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, or (E) purchaseoffer to redeem, repurchase, redeem repurchase or otherwise acquire acquire, directly or indirectly, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for any shares of its capital stock stock, other than the withholding of shares of Company Common Stock to satisfy the exercise price or withholding Tax obligations upon the exercise, vesting or settlement of outstanding Company Equity Awards in accordance with their terms and, as applicable, the Stock Plan;
(x) unless otherwise permitted by Section 7.1(b)(xvii), incur any Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (A) trade payables incurred in the Ordinary Course and intercompany loans or advances between or among the Company and/or its direct or indirect wholly-owned Subsidiaries, (B) other Indebtedness not to exceed $750,000 in the aggregate or (C) guarantees of Indebtedness of wholly owned Subsidiaries otherwise incurred in compliance with this Section 7.1;
(xi) except as set forth in the Company’s capital budget, make or authorize any capital expenditures in excess of $1,000,000 in the aggregate during any fiscal quarter (it being understood that any portion of the capital expenditures budget for any fiscal quarter and such $1,000,000 in excess thereof not expended in such fiscal quarter, beginning with the first quarter of the fiscal year ended March 31, 2021, may be carried forward and, together with any amount otherwise permissible pursuant to this paragraph (xi), expended in any future fiscal quarter; provided that any excess amount not expended in the final quarter of a fiscal year will not be carried forward into the next fiscal year);
(xii) other than in the Ordinary Course, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or amend, modify supplement, waive, terminate, assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract, other than (1A) pursuant to expirations of any such Contract in the forfeiture of, or withholding of Taxes with respect to, Company Restricted Stock Units, Company Deferred Stock Units or Company Performance Stock Units, in each case in accordance with past practice and with the terms of the Company Stock Plans as in effect on the date of this Agreement (or as modified after the date of this Agreement Ordinary Course in accordance with the terms of this Agreement) or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of the Company by the Company or any other wholly owned Subsidiary of the Company);
(ii) merge or consolidate with any other Personsuch Contract, or restructure, reorganize or completely or partially liquidate (other than transactions of the type contemplated by Section 5.01(b)(vii) or Section 5.01(b)(ix) which are not restricted thereby and other than mergers or consolidations of a Subsidiary of the Company in which such Subsidiary is the surviving entity in connection with an acquisition not otherwise prohibited by this Agreement and other than mergers among, or the restructuring, reorganization or liquidation of, any wholly owned Subsidiaries of the Company that would not prevent, materially delay or materially impair the Transactions);
(iii) except as expressly required by any Company Plan as in effect on the date hereof: (A) establish, adopt, amend or terminate any material Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, renewing or extending a broadly applicable material Company Plan in the ordinary course of business consistent with past practice that does not materially increase the cost of such Company Plan or benefits provided under such Company Plan based on the cost on the date hereof, (B) grant or provide any transaction or retention bonuses non-exclusive licenses, covenants not to any director▇▇▇, officerreleases, employee waivers or other service provider of rights under Intellectual Property Rights owned by the Company or any of its Subsidiaries, in each case, granted in the Ordinary Course;
(xiii) settle, release, waive or compromise any Proceedings except solely for monetary payments of no more than $750,000 individually or $1,500,000 in the aggregate, net of applicable insurance payments, recoveries or proceeds, or on a basis that would (A) prevent or materially delay consummation of the Merger or the Transactions, or (B) result in the imposition of any term or condition that would materially restrict the future activity or conduct of the Company or its Subsidiaries or a finding or admission of a criminal violation of Law;
(xiv) make any changes (other than di minimis changes) with respect to accounting policies or procedures, except as required by GAAP or applicable Law;
(xv) (A) make, change or revoke any income or other material Tax election, (B) adopt or change any Tax accounting method, (C) increase the compensationfile any amended Tax Return, bonus (D) enter into any closing agreement with respect to any Taxes, (E) settle any material Tax claim, audit, assessment or pensiondispute, welfare (F) surrender any right to claim a refund of a material amount of Taxes, (G) consent to any extension or other benefits waiver of any directorlimitation period with respect to any material Tax claim or assessment, officer (H) enter into any Tax sharing or employee similar agreement or arrangement, (I) fail to pay any material Tax that becomes due and payable or (J) incur any Taxes outside of the Company Ordinary Course;
(xvi) transfer, sell, lease, license, divest, cancel, mortgage, pledge, surrender, encumber, abandon or allow to lapse or expire or otherwise dispose of any assets (tangible or intangible), rights, properties, product lines or businesses, in whole or in part, material to it or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except for (A) sales of obsolete assets in the ordinary course Ordinary Course, (B) sales, leases or other dispositions of business consistent assets (not including services) with past practice with respect a Fair Value not in excess of $5,000,000 in the aggregate other than pursuant to (1) employees below Material Contracts in effect prior to the level date of Executive Vice President this Agreement and (2C) employees at or above non-exclusive licenses entered into in the level of Executive Vice President in respect of increases of less than 7.5% of compensation relative to their compensation, bonus or pension, welfare or other benefits prior to such change, Ordinary Course and (D) increase Encumbrances securing Indebtedness permitted under this Section 7.1(b) and (E) Permitted Encumbrances;
(xvii) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as otherwise required by applicable Law, (A) grant or provide any severance or termination payments or benefits to any Company Employee or other service provider, (B) increase the compensation or benefits payable to any director, officer, employee Company Employee or other service provider of provider, except for annual merit-based increases in base salary or base wages in the Ordinary Course for Company Employees or any of its Subsidiariesother service providers who are not directors or Executive Officers and whose annual base compensation is less than $250,000 (with no such increase to exceed three (3) percent (3%)), (EC) establish, adopt, enter into, amend or terminate any material Company Benefit Plan or other material benefit or compensation plan, program, policy, agreement or arrangement that would be a Company Benefit Plan if in effect on the date hereof, (D) take any action to accelerate the vesting or payment payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan other than vesting acceleration of all Company Options and Company RSUs in the Merger as contemplated by Section 3.5(b), (including E) grant any equity-based new awards, or amend or modify the terms of any outstanding awards (including, without limitation, any Company Equity Awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined or determined, except as may be required by GAAP, (G) forgive any loans, issue any loans or advance any loans to directorsany current or former Company Employees, officers (H) hire or engage any employee or engage any independent contractor (who is a natural person) with an annual base salary or wage rate or consulting fees in excess of $275,000 or (I) terminate the employment or engagement of any Company Employee or other service provider whose annual base compensation exceeds $275,000 other than for cause;
(xviii) recognize any union, works council or other labor organization as the representative of any of the employees of the Company or any of its Subsidiaries;
(iv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the ordinary course of business consistent with past practice in a principal amount not to exceed $400,000,000 in the aggregate at any time outstanding on prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a wholeor enter into, than existing Indebtedness, and with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (B) except with respect to the Bridge Facility, in replacement ofmodify, or to refinance, existing Indebtedness on then prevailing market terms or on terms substantially consistent with or more beneficial to the terminate any Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced, and in each case with a maturity date no more than 10 years after the date of the Contract evidencing such Indebtedness, (C) intercompany Indebtedness among the Company and its wholly owned Subsidiaries, (D) (1) to the extent not drawn upon and payments are not triggered thereby, letters of credit, bank guarantees, security or performance bonds or similar credit support instruments and (2) overdraft facilities or cash management programs, in each case issued, made or entered into in the ordinary course of business consistent with past practice, (E) commercial paper issued in the ordinary course of business consistent with past practice in a principal amount not to exceed $250,000,000 in the aggregate at any time outstanding, (F) Indebtedness, the proceeds of which will be used to finance all or any portion of the Dividend (and fees and expenses in connection therewith) or for general corporate purposes; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (F) shall not exceed $9,000,000,000; provided, further, that the Separation Agreement shall provide that SpinCo shall assume the obligations of the Company or any of its Subsidiaries with respect to such Indebtedness (and Parent and its Subsidiaries, including, following the Distribution, the Retained Subsidiaries, shall not have any obligations in respect thereof), (G) Indebtedness under the Bridge Facility, refinancings or replacements thereof and of commitments thereunder, and any refinancings or replacements of any such refinancing or replacement Indebtedness; provided that the aggregate principal amount of Indebtedness at any time outstanding under this clause (G) shall not exceed the amount permitted in Section 5.01 of the Company Disclosure Letter; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (G), (H) Indebtedness assumed in connection with a Sky Acquisition and refinancings or replacements thereof on then prevailing market terms or on terms substantially consistent with or more beneficial to the Company and its Subsidiaries, taken as a whole, than the Indebtedness being replaced or refinanced; provided, further, that the Company shall consult with Parent prior to incurring Indebtedness under this clause (H), (I) any amendment, refinancing or renewal of the existing revolving and term loan facilities of the YES Facility and any refinancing thereofLabor Agreement, in each case, so long except as required by applicable Law;
(xix) implement or announce any employee layoffs or location closings, that would implicate the aggregate principal amount thereof does not exceed $2,500,000,000WARN Act;
(xx) enter into any Contract which contains a change in control or similar provision that would be triggered in connection with this Agreement or the Merger;
(xxi) other than in the Ordinary Course, amend or modify in any material respect, or extent, renew or terminate any lease, sublease, license or other agreement for the use or occupancy of any real property, or enter into any new lease, sublease, license or other agreement for the use or occupancy of any real property;
(Jxxii) hedging maintain insurance at less than current levels or otherwise in compliance a manner inconsistent with the hedging strategy past practice in any material respects;
(xxiii) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the Company as or other Person covered by Item 404 of Regulation S-K promulgated by the date of this Agreement in the ordinary course of business consistent with past practice or in connection with a Sky Acquisition and not for speculative purposesSEC that would be required to be disclosed pursuant to Item 404; provided that the Company shall consult with Parent prior to entering into hedging activities in connection with Indebtedness of the type described in clauses (G) or (H) above, (K) Indebtedness and replacements and refinancings thereof incurred in connection with the funding of Star India Private Limited and its Subsidiaries; provided that the aggregate principal amount of such Indebtedness, replacements and refinancings does not exceed $400,000,000 outstanding at any time, and (L) purchase money indebtedness and lease financing in the ordinary course of business consistent with past practice;or
(vxxiv) with respect to the Retained Businessagree, other than with respect to acquisitions of businesses, which is subject to Section 5.01(b)(ix), and other than with respect to film and television production and programming (including sports rights) with third parties or video game production, which is subject to Section 5.01(b)(x), make authorize or commit to do any capital expenditures other than (A) in connection with the repair or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (if covered by insurance or if the portion of which that is not covered by insurance is less than $100,000,000) or (B) in the ordinary course of business consistent with past practice and in the aggregate not in excess of 120% of the amounts reflected in the Company’s capital expenditure budget for each of 2017, 2018 and 2019 set forth in Section 5.01(b)(v) of the Company Disclosure Letter;
(vi) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any material Intellectual Property; provided that this clause (vi) shall not restrict (A) ordinary course non-exclusive licenses or ordinary course security interests in connection with the production or financing of film and television programming or video game production, letting lapse, abandonment, and cancellations, and Liens that are ordinary course non-exclusive licenses, in each case, of Intellectual Property, (B) the granting of any licenses of Intellectual Property where the aggregate payments under such license do not exceed $125,000,000 annually per license, (C) sales of Intellectual Property with a fair market value less than $35,000,000 individually if the transaction is not in the ordinary course or $75,000,000 individually in any event (other than transactions among the Company and its wholly owned Retained Subsidiaries), (D) licenses, sales, letting lapse, abandonment and cancellations of Intellectual Property that is used or held for use exclusively in the SpinCo Business and (E) Affiliation Agreements;
(vii) with respect to the Retained Business, transfer, lease, license, sell, assign, let lapse, abandon, cancel, mortgage, pledge, place a Lien upon or otherwise dispose of any properties or assets (including capital stock of any of its Retained Subsidiaries but not including any Intellectual Property, which is governed by Section 5.01(b)(vi)), except for (A) sales, leases, licenses or other dispositions of any properties or assets (excluding capital stock of the Retained Subsidiaries) with a fair market value not in excess of $50,000,000 individually if the transaction is not in the ordinary course or $100,000,000 individually in any event or (B) transactions among the Company and the Retained Subsidiaries;
(viii) except with respect to SpinCo and the SpinCo Subsidiaries, issue, deliver, sell, grant, transfer, or encumber, or authorize the issuance, delivery, sale, grant, transfer or encumbrance of, any shares of its capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares, except (A) for any Shares issued pursuant to Company Restricted Stock Units, Company Performance Stock Units and Company Deferred Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, (B) Investment Preferred Stock (as defined in the Bridge Facility) or (C) by wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company; provided that, for the avoidance of doubt, granting customary profit participation rights or entering into customary film or television financing partnerships or contractual arrangements for film or television financing shall be deemed not to be an issuance, sale or grant of any shares of capital stock or any securities convertible or exchangeable into or exercisable for, or any options, warrants or other rights to acquire, any such shares for purposes of this Section 5.01(b)(viii);
(ix) with respect to the Retained Business, other than capital expenditures made in accordance with Section 5.01(b)(v) and other than with respect to film and television production and programming or video game production, which is subject to Section 5.01(b)(x), spend or commit to spend in excess of (A) $25,000,000 if the transaction is not in the ordinary course and $50,000,000 in any event or (B) $50,000,000 individually or $200,000,000 in the aggregate in any year, in each case to acquire any business, whether by merger, consolidation, purchase of property or assets, licenses or otherwise (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition); provided that neither the Company nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, prevent, materially delay or materially impair the consummation of the Transactions;
(x) other than capital expenditures made in accordance with Section 5.01(b)(v) and other than purchases and licenses of film and television and production programming (includinforegoing.
Appears in 1 contract
Sources: Merger Agreement (Majesco)