Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof): (a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses; (b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans; (c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock; (d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices); (e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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; (f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions; (g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; (h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement); (i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise); (j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate; (k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith; (l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law; (m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP; (n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied; (o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries; (p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and (q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 4 contracts
Sources: Agreement and Plan of Merger (National Home Health Care Corp), Merger Agreement (National Home Health Care Corp), Merger Agreement (National Home Health Care Corp)
Interim Operations. Except (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 this Agreement the Final Step Plan) or as set forth (3) otherwise expressly disclosed in Section 5.01 5.01(a) of the Company Disclosure Schedule or as consented to in writing by ParentLetter), the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall notshall, and shall not permit any cause each of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit use its reasonable best efforts to issue, sell or deliver (whether through conduct the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases Retained Business in the ordinary course of business consistent with past practice, increases and bonuses 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 under existing employment agreements, bonus plans by the Transaction Documents (including in connection with the Separation and other agreements and arrangements listed the Distribution) or described (3) otherwise expressly disclosed in Section 5.01(e5.01(b) of the Company Disclosure Schedule 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 connection with accelerating the vesting schedules 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 Options and terminating Company that would not prevent, delay or impair the Options and Initial Merger or the Stock Plansother Transactions), (iiB) 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 new 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 existing Contractmaterial Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, transactionrenewing 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, commitment (B) grant or arrangement with provide any current transaction or former retention bonuses to any director, officer, employee or affiliate other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedulepension, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan welfare or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit benefits of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets except in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures (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 planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries tobenefits prior to such change, (iD) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with increase the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary severance or loss termination payments or benefits payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty director, officer, employee or condemnation and Permitted Liens, subject to the expiration other service provider of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o(E) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to accelerate the filing vesting or payment of compensation or benefits under any Tax Return 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 payment of basis on which such contributions are determined or (G) forgive any Taxloans to directors, if such election, adoption, change, amendment, agreement, settlement, surrender, consent officers or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit employees of the Company or any of its Subsidiaries;
(piv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries ordinary course of business consistent with past practice in a principal amount not to use their respective commercially reasonable efforts to, prevent exceed $400,000,000 in the termination of aggregate at any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend time outstanding on prevailing market terms or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, consistent with or more beneficial on balance 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 its Subsidiaries thanthe 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 terms of such Contract prior to Separation Agreement shall provide that SpinCo shall assume the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from 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, modification refinancing or supplement would 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 $25,000 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 annum 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 $100,000 per annum for all such amendments, modifications and supplements 200,000,000 in the aggregateaggregate 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); and
(q) provided that neither the Company shall not, and shall not permit nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, agree prevent, materially delay or commit to do any materially impair the consummation of the foregoing.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. Except The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (a) the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course, (b) each of the Company and its Subsidiaries shall use its reasonable best efforts to preserve its business organizations and assets intact and maintain its rights, franchises, powers and privileges and its existing relations and goodwill with Governmental Authorities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of the Company and its Subsidiaries’ present employees and agents, and (c) subject to Section 5.10, the Company and its Subsidiaries shall take no action that would reasonably be expected to adversely affect or materially delay the ability of the Company to obtain any necessary approvals of any Regulatory Authorities or other Governmental Authority required for the transactions contemplated hereby, to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement or as required by Law, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, not and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.:
Appears in 4 contracts
Sources: Merger Agreement (CU Bancorp), Merger Agreement (Pacwest Bancorp), Merger Agreement (Square 1 Financial Inc)
Interim Operations. Except (a) Each of the Company and Parent covenant and agree as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless the Company or Parent, as applicable, shall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as otherwise expressly contemplated by this Agreement Agreement, as may be required by applicable Law or as set forth in Section 5.01 7.1(a) of the Company such Party’s Disclosure Schedule or as consented to in writing by ParentLetter, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(ai) the business and operations of the Company each Party and its Subsidiaries shall be conducted, and the books and records of the Company and will use its Subsidiaries shall be maintained, only commercially reasonable efforts to conduct its business in all material respects in the ordinary course of business Ordinary Course and (ii) to the Company extent consistent therewith, such Party and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve their business organizations intact their current business organizationsand maintain existing relations and goodwill with Governmental Entities, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertiserscreditors, distributors lessors, Service Providers and other material third parties having business dealings with them associates and to preserve keep available the goodwill services of their respective businesses;its and its Subsidiaries’ present Service Providers and agents, except as otherwise expressly contemplated by this Agreement.
(b) Without limiting the Company generality of and in furtherance of Section 7.1(a), from the date of this Agreement until the Effective Time, except as otherwise (w) expressly contemplated by this Agreement, (x) required by applicable Law, (y) approved in writing by the other Party (which approval shall notnot be unreasonably withheld, conditioned or delayed) or (z) set forth in Section 7.1(b) of such Party’s Disclosure Letter, each Party, on its own account, shall not and shall cause its Subsidiaries not permit 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 towith 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 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, other 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, (ix) 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 for the issuance, issuesale, deliverpledge, sell disposition, grant, transfer, lease, license, guarantee or agree or commit to issueEncumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or the capital stock of any of its Subsidiaries (other than (A) 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 direct or indirect wholly owned Subsidiary to it or another of its direct or indirect wholly owned Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances y) in respect of Common Shares upon the exercise of Options equity-based awards outstanding as of the date hereof; of this Agreement, or (iiz) repurchasegranted in accordance with Section 7.1(b)(xvi) in each of clauses (y) and (z), redeem in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement), or otherwise acquire securities convertible or exchangeable into or exercisable for any shares of the such capital stock stock, or any options, warrants or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance (other equity interests 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 Company or Ordinary Course on any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company assets or any of its Subsidiaries, except for Encumbrances (A) as that are required by this Agreementor automatically effected by Contracts in place as of the date hereof, (B) as set forth in Section 5.01(b) that do not materially detract from the value of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted assets or (C) in connection with terminating that do not materially impair the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer operations of such Party or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (ii) amend other than to or otherwise change its certificate of incorporation or bylaws or permit from the Company and any of its direct or indirect wholly owned Subsidiaries or to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, from Parent and shall not permit any of its Subsidiaries to splitdirect or indirect wholly owned Subsidiaries, combine as applicable, or reclassify any shares of its capital stock;
(din accordance with Section 7.1(b)(xvi)) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, 1,000,000 individually or $2,000,000 in the Company shall notaggregate;
(vii) except to the extent expressly provided by, and shall not permit any consistent with, Section 7.1(b)(vii) of its Subsidiaries tosuch Party’s Disclosure Letter, declare, set aside aside, make or pay any dividends on (whether dividend or other distribution, payable in cash, stock stock, property or other property)otherwise, or make any other distributions in with respect of, to any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiaries Subsidiary to the Company it or to any other direct or indirect wholly owned Subsidiaries of the Company consistent with past practices)Subsidiary) or modify in any material respect its dividend policy;
(eviii) neither the Company nor reclassify, split, combine, subdivide or redeem, purchase (through such Party’s share repurchase program or otherwise) or otherwise acquire, directly or indirectly, any of its Subsidiaries shall (i) grant capital stock or agree to securities convertible or exchangeable into or exercisable for any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any shares of its Subsidiariescapital stock, or other than with respect to (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(fA) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or 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 Option 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 Equity Awards or Parent 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 Company Stock Plans or Parent Stock Plans, 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 $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 mannerdirect or indirect wholly owned Subsidiary of such Party, in each case in response to any business unanticipated and subsequently discovered events, occurrences or any corporationdevelopments (provided, partnership, association or other business organization or division thereof other than acquisitions or purchases made that such Party will use its reasonable best efforts to consult with the other Party prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by to making or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) agreeing to any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionssuch capital expenditure);
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for other than in connection with any transaction or pre-pay any Indebtednesspotential transaction described in Section 7.1(b) of such Party’s Disclosure Letter, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes Contract that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves would have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put a Material Contract had it been entered into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by prior to this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially adversely amend, modify or supplement in any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)material respect, or (ii) waive, release, grantterminate, assign, modify convey, Encumber or transfer otherwise transfer, in whole or in part, any material right or interest pursuant to or in, any Material Contract other than (A) expirations and renewals of its material rights or claims (whether any such rights or claims arise under a Contract or otherwise);
(j) in the Company shall not, and shall not permit any Ordinary Course in accordance with the terms of its Subsidiaries to, authorize or make any capital expenditures such Contract (other than pursuant to commitments prior to any Contract of the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed type referenced in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to5.17(a)(ii)), (iB) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real non-exclusive licenses under Intellectual Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used owned by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company Parent or any of its Subsidiaries, as applicable, in each case, granted to customers in the Ordinary Course, or (C) any agreement among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(xi) other than in the Ordinary Course or with respect to amounts that are not material to such Party and its Subsidiaries, taken as a whole, 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 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 the parameters set forth in Section 7.1(b)(xii) of such Party’s 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 any material restrictions on the business operations of such Party 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) 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, except (G) change its tax residency, or (H) fail to file when due (taking into account any available extensions that do not result in the imposition of a penalty) 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 exist the creation of any Encumbrance upon, any assets (tangible or intangible), product lines or businesses material to it and its Subsidiaries, taken as set forth in Section 5.01(o) a whole, including capital stock of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, except in connection with (A) sales of or take any 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 similar actiondispositions of assets (not including services or sales of inventory in the Ordinary Course) with a fair market value not in excess of $10,000,000 in the aggregate other than pursuant to Material Contracts in effect prior to the date of this Agreement, or omit entered into 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 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 or amend or modify the terms of any outstanding awards under any Company Benefit Plan or Parent Benefit Plan, as applicable, (B) 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 relating to the filing of any Tax Return fund or secure the payment of any Taxamounts under any Benefit Plan, if (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 extent that a Party intends to hire an individual to replace an executive officer of such electionParty, adoptionsuch Party shall first consult in good faith with the other Party prior to, changeand with respect to, amendmentthe hiring of such individual;
(xvii) recognize any labor union, agreementworks council, settlement, surrender, consent or other action labor organization or omission would have employee representative as the effect representative of materially increasing any of the present employees of the Party or future Tax liability its Subsidiaries, or materially decreasing become a party to, establish, adopt, amend, commence negotiations for or terminate any present collective bargaining agreement or future Tax benefit 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 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 its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant CustomerCompany, (iiC) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company guarantees by Parent or any direct or indirect wholly owned Subsidiary of its Subsidiaries thanParent 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 terms aggregate amount of such Contract prior to the making of such amendment or modificationIndebtedness, plus fees, expenses, premium and (iii) not, accrued and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations unpaid interest in respect of the Company Indebtedness being refinanced or any of its Subsidiaries resulting from such amendmentreplaced, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendmentspermitted to be outstanding thereunder and in each case on customary commercial terms), modifications and supplements in the aggregate; and
(qE) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.Indebtedness
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. Except (a) From and after the execution and delivery of this Agreement until the earlier of the Effective Time and the termination of this Agreement and 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 5.01 7.1(a) of the Company Disclosure Schedule or (iii) as consented to Parent shall otherwise consent in writing by Parent(which consent shall not be unreasonably withheld, delayed or conditioned), the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue use commercially reasonable efforts to conduct their respective businesses in force insurance with good and responsible insurance companies adequately covering risks the Ordinary Course of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition Business in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (ivB) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts toshall, and shall cause its Subsidiaries to to, use their respective commercially reasonable efforts toto (x) maintain all existing relationships and goodwill with key customers, prevent suppliers and other persons having material business relationships with the termination Company and its Subsidiaries and (y) keep available the services of any Contract with any Significant Customerthe officers and key employees of the Company and its Subsidiaries, and (iiC) without limiting the generality of the foregoing, shall not, and shall cause its Subsidiaries not to, amend :
(i) adopt or modify propose any Contract change in its Organizational Documents;
(ii) merge or consolidate with any Significant Customerother 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 the 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 (A) the 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 substantially equivalent 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 to the Company or another Wholly Owned Subsidiary of the Company, (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 (3) pursuant to the 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 than 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 redeem, purchase or otherwise acquire (or offer to do any of the foregoing), directly or indirectly, any of its capital stock, other equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, other than (A) the withholding of Common Shares to satisfy the payment of the exercise price on the exercise of a Company Option or withholding Tax obligations upon the exercise, vesting or settlement of Company Equity Awards outstanding as of the date of this Agreement, in each case, in accordance with their terms and, as applicable, the Stock Plans as in effect as of the Capitalization Time and (B) pursuant to an exercise of the Capped Call Transactions in accordance with their terms;
(xi) incur or assume any indebtedness for borrowed money, guarantee any indebtedness for borrowed money or enter into a “keep well” or similar arrangement in respect of indebtedness for borrowed money except for any such indebtedness not to exceed $2.5 million individually or $5 million in the aggregate;
(xii) incur, make or authorize any payment of, or accrual or commitment for, capital expenditures, or any obligations or liabilities in connection therewith except as contemplated by or reasonably related to, and which shall not exceed 107.5% of the aggregate amounts set forth in, the Company’s capital budget set forth in Section 7.1(a)(xii) of the Company Disclosure Schedule;
(xiii) enter into, terminate or more beneficial on balance materially amend any Contract pursuant to which the Company or any of its Subsidiaries than, purchase from a third party service provider Software (“Third Party IT Contracts”) (other than in the terms Ordinary Course of Business with respect to any such Contract prior to the making that involve aggregate annual payments of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed less than $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.300,000);
Appears in 3 contracts
Sources: Agreement and Plan of Merger (Benefitfocus, Inc.), Merger Agreement (Benefitfocus, Inc.), Merger Agreement (Benefitfocus, Inc.)
Interim Operations. (a) Except as (x) required by applicable Law, (y) otherwise contemplated expressly required by this Agreement or as (z) otherwise set forth in Section 5.01 6.1 of the Company Disclosure Schedule or as consented to in writing by ParentLetter, the Company covenants and agrees that during the period from that, after the date hereof and until the earlier of this Agreement to the Effective Time (or until the termination of this Agreement in accordance with Article 7 hereof):
its terms (a) the business and operations of unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause its Subsidiaries shall be conductedto, and the books and records of the Company and its Subsidiaries shall be maintained, only conduct their business in the ordinary course of business consistent with past practice and in compliance with all applicable Laws and, to the Company extent consistent therewith, it shall, and shall cause its Subsidiaries shall Subsidiaries, to use their commercially respective reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material business organizations intact and maintain in all material respects existing relations and goodwill with Governmental Entities, customers, suppliers, licensorsemployees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, licenseesfrom the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, advertisersexcept as (A) required by applicable Law or as contemplated by the Scheme Document Annex, distributors (B) otherwise expressly required by this Agreement, (C) Buyer may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned) or (D) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will cause its Subsidiaries not to:
(i) amend or otherwise change, or authorize or propose to amend or otherwise change its articles of association, certificate of incorporation, bylaws or other material third parties having business dealings with them and to preserve the goodwill of their respective businessesapplicable governing documents;
(bii) merge, enter into any scheme of arrangement or bid conduct agreement or other similar arrangement, or consolidate with any other Person or restructure, reorganize or completely or partially liquidate the Company shall not, and shall not permit or any of its Subsidiaries toSubsidiaries;
(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;
(iiv) authorize for issuance, issue, deliversell, sell pledge or agree otherwise encumber or commit subject to issue, sell or deliver any Lien (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), pledge dispose of, grant, transfer, or otherwise encumber 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 (A) the issuance of Ordinary Shares upon the vesting of Company RSUs (and dividend equivalents thereon, if applicable) outstanding prior to the date hereof, (B) the issuance of Ordinary Shares pursuant to the Company ESPP, but only with respect to elections made prior to the date hereof and only in accordance with such Company ESPP as in effect as of the date hereof (for the avoidance of doubt, the Company shall not allow the commencement of any new offering periods under the Company ESPP), (C) in connection with the Comcast Warrants or Charter Warrants (including exercise thereof), each as in effect as of the date hereof or (D) the issuance or transfer of common stock or 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 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 to the Company or to any other direct or indirect wholly owned Subsidiary in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of its capital stock or the capital stock of other equity interests;
(vii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its Subsidiariescapital stock, any other securities Company Securities or any securities convertible Other Subsidiary Securities (other than the acquisition of any Ordinary Shares tendered by current or exercisable into, former employees or directors in order to pay Taxes in connection with the vesting of Company RSUs);
(viii) incur any rights, warrants Indebtedness or options guarantee such Indebtedness of another Person (except with respect to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances obligations of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests wholly owned Subsidiaries of the Company or in the ordinary course of business and in a manner that would not have any of its Subsidiaries (including, without limitation, securities exchangeable formaterial Tax consequences), or options, warrants, calls, commitments issue or rights of sell any kind to acquire, capital stock debt securities or warrants or other equity interests of the Company or rights to acquire any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding debt security of the Company or any of its Subsidiaries, except for (A) as required by this Indebtedness for borrowed money under the revolving facility under the Company Credit Agreement, (B) as loans or advances to wholly owned Subsidiaries and (C) other Indebtedness in an amount not to exceed an aggregate principal amount of $15 million;
(ix) shall not authorize or make any capital expenditures in excess of $40 million in the aggregate, except for (A) expenditures set forth in the current capital forecast set forth in Section 5.01(b6.1(a)(ix) of the Company Disclosure ScheduleLetter or (B) expenditures made in response to any emergency, whether caused by war, terrorism, weather events, public health events, outages, operational incidents or 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 or any of its Subsidiaries other than settlements or compromises of any 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 connection with accelerating each case, such settlement or compromise does not include any criminal liability, material injunctive relief or obligation to be performed by the vesting schedules Company or any of its Subsidiaries other than the Options payment of money damages;
(xii) other than in the ordinary course of business or to the extent required by Law, make any 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 a material amount of Tax;
(xiii) transfer, sell, lease, license, mortgage, pledge or otherwise encumber or subject to a 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 Stock Plans Company or its Subsidiaries, with a value in excess of $50 million in the agreements pursuant 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 which such Options were granted or 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 connection with terminating the Options and the Stock Plansordinary course of business;
(cxiv) (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 shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of 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 or as required by agreements, plans, programs or arrangements in effect on the date hereof, (iiB) increase in any manner the compensation, bonus or benefits of, or make, grant or amend in any respect any equity or otherwise change its certificate equity-linked awards (including changing the vesting criteria thereof) to, or grant or increase any bonuses to, any director, consultant or employee of incorporation the Company or bylaws or permit any of its Subsidiaries to amend its articles Subsidiaries, except (1) in the case of incorporationemployees or consultants who are not executive officers of the Company, or bylaws or (iii) split, combine or reclassify any shares in the ordinary course of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid business consistent with past practicespractice or as is not material in the aggregate and (2) in the case of employees who are executive officers of the Company, increases in base salary in connection with the Company’s usual and customary annual review in 2019, so long as any such increases are consistent with past practice, (C) except as required by Law or as required by agreements, plans, programs or arrangements in effect on the date hereof, establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or the Pension Plan made in the ordinary course of business consistent with past practice) or accelerate the vesting or payment of any compensation or equity for the benefit of any Person or funding of any Benefit Plan (except (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), (D) change any actuarial or other assumptions used to calculate funding obligations with respect to 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, except as may be required by GAAP or (E) except as required by Law, establish, adopt, enter into or amend any collective bargaining agreement, labor union, plan, trust, fund, policy or arrangement for the benefit of any current or former directors, consultants, officers or employees or any of their 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;
(xv) grant a license of any material Intellectual Property owned by the Company or any of its Subsidiaries to, declare, set aside other than in the ordinary course of business consistent with past practice;
(xvi) allow any lapse or pay abandonment of any dividends on (whether in cash, stock or other property)material Intellectual Property, or make 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 any Affiliate of the Company (other distributions in respect of, than any of its capital stock Subsidiaries in the ordinary course of business and in a manner that would not have any material Tax consequences) or named executive officer (except as defined in 17 CFR 229.402) of the Company (or any immediate family member or Affiliate of the foregoing) providing for dividends paid payments by direct or indirect wholly owned Subsidiaries to the Company or any Subsidiary thereof in excess of $120,000, other than the agreements expressly contemplated by this Agreement;
(xviii) enter into any Contract that would require payment to or give rise to any rights (other wholly owned Subsidiaries than notice) to such other party or parties in connection with the transactions contemplated by this Agreement;
(xix) institute any general layoff of employees, implement any early retirement plan or announce the Company consistent with past practicesplanning of such 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);
(exx) neither 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, in any material respect, the operations of the Company nor or any of its Subsidiaries shall Subsidiaries;
(ia) grant other than new Contracts with customers or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases suppliers in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, Contract that would have been a Material Contract had it been entered into prior to this Agreement or (iiib) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess practice or expirations of $500,000 any such Contract in the aggregateordinary course of business consistent with past practice in accordance with the terms of 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;
(kxxiii) other than renewals in the Company shallordinary course of business, and shall cause its Subsidiaries toamend, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practicesmodify, (ii) use reasonable best efforts not to permit any terminate, cancel or let lapse a material insurance policy naming it as beneficiary (or loss payable payee to be canceled reinsurance policy) or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and self-insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) program of the Company Disclosure Schedule, the Company shall not, and shall not permit any of or its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries effect as of the date hereof, except 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 may be required as a result of a change applicable, are in applicable Law or in GAAPfull force and effect;
(nxxiv) the Company shall not, and shall not permit exercise any of its Subsidiaries to, take, rights under Section 5 or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty Section 6 of the Company contained 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 this Agreement inaccurate in any material respect at, the Company’s current articles of association) or as of any time prior to, the Effective Time similar interests or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;rights); or
(oxxv) the Company shall notagree, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, 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 the Company and Arris US Holdings Inc. is not, and has not been within the five (5) year period described in Section 897(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 (as such schedule may be reasonably amended prior to the Closing Date), certifying that each such Subsidiary does not own any U.S. real property i
Appears in 3 contracts
Sources: Bid Conduct Agreement, Bid Conduct Agreement (ARRIS International PLC), Bid Conduct Agreement (CommScope Holding Company, Inc.)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the Wax Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or until termination of this Agreement delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in accordance connection with Article 7 hereof):
the Separation and the Distribution or as contemplated by the Final Step Plan) or (a3) the business and operations otherwise expressly disclosed in Section 5.01(a) of the Company and its Subsidiaries shall be conductedDisclosure Letter), and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall notshall, and shall not permit any cause each of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit use its reasonable best efforts to issue, sell or deliver (whether through conduct the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases Retained Business in the ordinary course of business consistent with past practice, increases and bonuses 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 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 under existing employment agreements, bonus plans by the Transaction Documents (including in connection with the Separation and other agreements and arrangements listed the Distribution) or described (3) otherwise expressly disclosed in Section 5.01(e5.01(b) of the Company Disclosure Schedule 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 connection with accelerating the vesting schedules 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 Options and terminating Company that would not prevent, delay or impair the Options and Wax Merger or the Stock Plansother Transactions), (iiB) 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 new 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 existing Contractmaterial Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, transactionrenewing 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, commitment (B) grant or arrangement with provide any current transaction or former retention bonuses to any director, officer, employee or affiliate other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedulepension, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan welfare or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit benefits of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets except in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures (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 planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries tobenefits prior to such change, (iD) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with increase the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary severance or loss termination payments or benefits payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty director, officer, employee or condemnation and Permitted Liens, subject to the expiration other service provider of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o(E) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to accelerate the filing vesting or payment of compensation or benefits under any Tax Return 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 payment of basis on which such contributions are determined or (G) forgive any Taxloans to directors, if such election, adoption, change, amendment, agreement, settlement, surrender, consent officers or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit employees of the Company or any of its Subsidiaries;
(piv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries ordinary course of business consistent with past practice in a principal amount not to use their respective commercially reasonable efforts to, prevent exceed $400,000,000 in the termination of aggregate at any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend time outstanding on prevailing market terms or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, consistent with or more beneficial on balance 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 its Subsidiaries thanthe 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 terms of such Contract prior to Separation Agreement shall provide that SpinCo shall assume the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from with respect to such Indebtedness (and Holdco, Parent and 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, modification refinancing or supplement would 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 $25,000 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 annum 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 $100,000 per annum for all such amendments, modifications and supplements 200,000,000 in the aggregateaggregate 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); and
(q) provided that neither the Company shall not, and shall not permit nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, agree prevent, materially delay or commit to do any materially impair the consummation of the foregoing.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 (including 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. Except From the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement, and except (i) as otherwise required or expressly permitted or contemplated by this Agreement or Agreement, (ii) as required by applicable Law, (iii) as set forth in Section 5.01 of the Company Disclosure Schedule or 5.1(c), (iv) as consented to in writing by ParentParent (which consent shall not be unreasonably withheld, conditioned or delayed) or (v) as set forth in Section 5.1 of the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):Disclosure Schedule:
(a) the business The Company shall, and operations shall cause each of the Company and its Subsidiaries to (provided, with respect to non-Wholly Owned Subsidiaries, Company shall be conductedcause such Subsidiaries to the extent within its reasonable control), use its and the books and records of the Company and their respective reasonable best efforts to (x) conduct its Subsidiaries shall be maintained, only business in all material respects in the ordinary course of business, (y) to the extent consistent therewith, preserve their business organizations intact and the Company maintain existing relations and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current goodwill with Governmental Entities and key customers, suppliers, distributors, creditors, lessors, employees (including any labor union, labor organization, works council or other similar organization) and business organizations, associates and keep available the services of its and their current officers and present officers, key employees and preserve their relationships workforce (including any directors), and (z) maintain in force and enforce internal policies, procedures and controls (as updated or amended from time to time) designed to ensure compliance with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
applicable Law; provided that (bi) no action or inaction by the Company shall not, and shall not permit or any of its Subsidiaries to, (iwith respect to any matters specifically permitted by any portion of Section 5.1(b) authorize for issuance, issue, deliver, sell shall be deemed a breach of this Section 5.1(a) unless such action or agree or commit to issue, sell or deliver (whether through the issuance or granting inaction would constitute a breach of options, commitments, subscriptions, rights to purchase or otherwisesuch portion of Section 5.1(b), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; and (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests failure of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights to take any action prohibited by Section 5.1(b) shall in no circumstances be deemed a breach of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiariesthis Section 5.1(a); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(cb) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the The Company shall not, and shall cause its Wholly Owned Subsidiaries not permit any to (provided, with respect to non-Wholly Owned Subsidiaries, the Company shall instruct its directors and officers of its such Subsidiary to use their reasonable best efforts to cause such Subsidiaries not to, declare, set aside the extent within their reasonable authority and control):
(i) amend its or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices)their respective Organizational Documents;
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization recapitalization, or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)Subsidiaries;
(iiii) except as set forth acquire (including by acquisition of equity (including any debt securities convertible into equity) or assets) any business, Person, equity interest in Section 5.01(iany Person, material properties or material assets, other than (A) acquisitions of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, inventory or materially amend, modify other goods or supplement any Contract outside services in the ordinary course of business consistent with past practice under which or (B) solely in the case of acquisitions of properties or assets (but not businesses, Persons or equity interests), acquisitions (x) for consideration not in excess of $5,000,000 in any individual transaction or series of related transactions or $15,000,000 in the aggregate in any twelve (12)-month period after the date of this Agreement or (y) expressly contemplated by the Company’s then-current capital budget described in or adopted in accordance with the terms of Section 5.1(b)(x);
(iv) transfer, sell, lease, license, abandon, cancel, allow to lapse, or otherwise dispose of any material assets of the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)Subsidiaries, or (ii) waiveincur, release, grant, assign, modify permit or transfer suffer to exist the creation of any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures Encumbrance (other than pursuant to commitments prior to the date hereof or other planned capital expenditures a Permitted Encumbrance) upon any such assets (in each case, excluding Intellectual Property Rights), except (A) for inventory in the ordinary course of business consistent with past practices disclosed practice, (B) for obsolete assets in Section 5.01(jthe ordinary course of business consistent with past practice, (C) for properties or assets with a fair market value not in excess of $5,000,000 individually, or $15,000,000 in the aggregate in any twelve (12)-month period after the date of this Agreement, or (D) pursuant 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, sell, lease, license, abandon, cancel, allow to lapse, or otherwise dispose of any material Intellectual Property Rights of the Company Disclosure Schedule by categoryor 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 Intellectual Property Rights, except (A) the lapse or make expiration of Registered Owned IPR at the end of its natural term or (B) non-exclusive licenses granted in the ordinary course of business consistent with past practice;
(vi) issue, sell, dispose of, grant, transfer, encumber or otherwise enter into any commitments Contract with respect to capital expenditures the voting 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 planned capital expenditures rights of any kind to acquire any such equity interests or such convertible or exchangeable securities in each case, 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) 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 practices 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 $500,000 10,000,000 individually or $25,000,000 in the aggregateaggregate in any twelve (12)-month period after the date of 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 date hereof and made available to Parent prior to the date of this Agreement or entered into in the ordinary course of business and without violation of Section 5.1(b)(xi);
(kviii) declare, set aside or pay any dividend or other distribution, with respect to any securities of the Company shallor its Subsidiaries, and shall cause its Subsidiaries toother 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;
(ix) 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 Company or any Subsidiary of the Company or securities convertible or exchangeable in respect of such equity interests, in each case, other than (A) to satisfy applicable Tax withholding or exercise prices upon vesting, settlement or exercise of any Company Equity Award outstanding on the date of this Agreement or granted after the date of this Agreement as permitted by Section 5.1(b)(xx), (iB) continue repurchases of shares of capital stock as permitted under any Company Equity Award outstanding on the date of this Agreement or granted after the date of this Agreement as permitted by Section 5.1(b)(xx) or (C) any such transactions solely involving Wholly Owned Subsidiaries of the Company;
(x) (A) authorize any new capital expenditures, in force insurance with good and responsible insurance companies adequately covering risks of such types and each case, other than (I) for capital expenditures first authorized in such amounts 2024, as are consistent with contemplated by the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as existing capital budget for calendar year 2024 set forth in Section 5.01(l5.1(b)(x)(A) of the Company Disclosure Schedule, (II) for capital expenditures first authorized in calendar year 2025, as contemplated by the Company shall notCompany’s capital budget for calendar year 2025 so long as such 2025 capital budget allocates capital expenditures substantially consistently with the Company’s 2024 capital budget, does not exceed the Company’s 2024 capital budget by more than five percent (5%) and shall not permit any of its Subsidiaries tois delivered to Parent by no later than February 1, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union2025, or (iiIII) 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 Contracts relating to the activities described in any other clause of this Section 5.1(b), which shall be governed by those respective clauses, enter into any labor or collective bargaining agreementContract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement (including by amending any Contract in a manner that would make such Contract a Company Material Contract), memorandum or understandingother than any Contract of the type described in Section 3.11(a)(ii) (solely with respect to Contracts with a Company Top Supplier), grievance settlement or 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 agreement clause of Section 3.11(a)), Section 3.11(a)(vi) (solely with respect to personal property) or commitment Section 3.11(a)(xi) (solely with respect to customer or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, exceptsupplier Contracts containing customary indemnification obligations), in each case, as required by Law;
(m) that is 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 shall notand its Subsidiaries in connection with the Transactions would constitute a breach or default thereunder or permit the termination, and shall not permit 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 $15,000,000 individually, or $30,000,000 in the aggregate in any twelve (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, 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 the extent required by GAAP as consistently applied by the Company since the Applicable Date;
(xviii) enter into any new line of business that is not incidental to, change any or an iteration, extension, natural evolution, expansion or advancement of, the lines of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by business of the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAPthis Agreement;
(nxix) (A) make (other than in the Company shall notordinary course of business), and shall not permit any of its Subsidiaries to, take, change or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in revoke any material respect atTax election, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(oB) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual Tax accounting period with respect to Taxesor method, (C) file any material amended Tax Return, (D) enter into any closing agreementagreement with respect to material Taxes, (E) settle or compromise any material Tax claim, audit, assessment or liability relating 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 becomes 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 Company or any of its Subsidiariesextent required by GAAP), or (I) surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, 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, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiariesrefund;
(pxx) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries except as required pursuant to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior any Company Benefit Plan in effect as of the date hereof, any Company Labor Agreement (as may be amended pursuant to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter intothis Agreement), or materially amendas otherwise required by applicable Law, modify (A) increase the compensation or supplementconsulting fees, any Lease bonus, pension, welfare, fringe or other Material Contract under which the costs benefits, severance or obligations termination pay of the any Company Employee, except for (1) increases in annual base salary or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements wage rate in the aggregate; and
ordinary course of business consistent with past practice that do not exceed five percent (q5%) in the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.aggregate or
Appears in 3 contracts
Sources: Merger Agreement (Boeing Co), Merger Agreement (Spirit AeroSystems Holdings, Inc.), Merger Agreement (Boeing Co)
Interim Operations. Except as otherwise contemplated by (a) From the date of this Agreement and 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 5.01 6.1(a) of the Company Disclosure Schedule Letter, (x) as otherwise expressly contemplated or as permitted by this Agreement (including Section 6.17), (y) to the extent consented to in writing by ParentParent (which consent shall not be unreasonably withheld, delayed or conditioned) or (z) as required by applicable Law, the Company covenants shall, and agrees that during the period from the date of this Agreement shall cause its Subsidiaries to, use reasonable best efforts to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) cause the business and operations of the Company it and its Subsidiaries shall to be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary course of business and the Company it shall, and shall cause its Subsidiaries shall to, use their commercially respective reasonable best efforts to preserve their business organizations intact their current business organizationsand maintain existing relations with Governmental Entities, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensorsdistributors, licenseesemployees and business associates. Notwithstanding the generality of the foregoing, advertisersand subject to the exceptions set forth in clauses (w), distributors (x), (y) and other material third parties having business dealings with them and to preserve (z) of the goodwill of their respective businesses;
(b) immediately preceding sentence, the Company shall not, not and shall not permit any of its Subsidiaries to, :
(i) authorize for issuanceamend the certificate of incorporation, issue, deliver, sell bylaws or agree comparable governing documents of the Company or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries;
(ii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or any property or assets outside of the ordinary course of business from any other securities Person with a value or purchase price in the aggregate in excess of $5 million in any securities convertible transaction or exercisable intoseries of related transactions, or any rights, warrants or options other than acquisitions pursuant to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding Contracts in effect as of the date hereof; of this Agreement that have been made available to Parent prior to the date of this Agreement;
(iiiii) repurchasemerge or consolidate with any other Person or restructure, redeem reorganize or otherwise acquire completely or partially liquidate the Company or any of its Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, any shares of the capital stock or other equity interests securities convertible, exchangeable or exercisable therefor (collectively, “Equity Interests”) of the Company or any of its Subsidiaries (includingincluding any Company Stock Options, without limitationCompany Restricted Stock, securities exchangeable 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) 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 Rights Agreement;
(v) declare, set aside, establish a record date for, or optionspay any dividends on or make any other distributions (whether payable in cash, warrantsstock, calls, commitments property or rights a combination thereof) in respect of any kind 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, capital stock 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 equity interests rights to acquire any debt security of the Company or any of its Subsidiaries); Subsidiaries or (iiiC) amendassume, modify guarantee or waive any term endorse, or otherwise become responsible for, the obligations of any outstanding security 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 (A) as required by this Agreement, (B) as set forth in Section 5.01(b) the case of employees who are not executive officers of the Company Disclosure ScheduleCompany, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements(B) increase the compensation or bonus (or grant, bonus plans and other agreements and arrangements listed pay or described in Section 5.01(eagree to pay bonuses) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with to any current or former director, officerofficer 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, (C) increase pensions or welfare benefits of any current or former director, officer or employee of the Company or affiliate any of its Subsidiaries, except in the case of employees who are not executive officers of the Company, in the ordinary course of business, (D) establish, adopt, terminate or materially amend any Company Plan or materially amend the terms of any Equity Awards, or enter into any new, or amend any existing change in control arrangements or retention, retirement or similar agreements with any new, current or former director, officer or employee of the Company or any of its Subsidiaries, (E) accelerate the vesting or payment of or take action to fund, any compensation payable or benefits to become payable or provided to any current or former director, officer or employee of the Company or any of its Subsidiaries, except as otherwise provided in this Agreement, (F) enter into any new, 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;
(iiix) 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) 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 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 5.01(e6.1(a)(xv) of the Company Disclosure ScheduleLetter or for expenditures required by Law or in response to casualty loss or property damage, as may be required to comply with applicable Law and as provided make or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under authorize any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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 hereofcapital expenditures;
(fxvi) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions pursuant to Section 6.16, waive, release, settle or purchases made compromise any pending or threatened litigation, arbitration, claim (excluding ordinary course disputes with the prior written consent of the Parent (each an “Approved Acquisition”vendors in which no litigation or arbitration commences) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of action against the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” Subsidiaries other than settlements or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect 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 foregoingCompany or its Subsidiaries; or provided that the foregoing clause (yA) sell, lease, license or subject will not restrict the Company’s ability to settle any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets ordinary course claim involving a settlement amount not in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries100,000;
(hxvii) neither the Company nor any of its Subsidiaries shall adopt or put enter into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(pxviii) fail to maintain in full force and effect material insurance policies covering the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use and their respective commercially reasonable efforts toproperties, prevent the termination of any Contract assets and businesses in a form and amount consistent with any Significant Customerpast practice, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to unless the Company determines in its reasonable commercial judgment that the form or any of its Subsidiaries than, the terms amount of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregateinsurance should be modified; andor
(qxix) the Company shall notagree, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoingforegoing 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 knowingly take or permit any of their Affiliates to take any action that could reasonably be expected to prevent or materially impede the consummation of the Merger, the Carveout Transaction or the other transactions contemplated by this Agreement and the Carveout Transaction Agreement.
(c) Nothing contained in 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 the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 2 contracts
Sources: Merger Agreement (Wolverine World Wide Inc /De/), Merger Agreement (Collective Brands, Inc.)
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, such approval not to be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 6.1 of the Company Disclosure Schedule or Letter) and except as consented to in writing required by Parentapplicable Law, the Company covenants business of it and agrees that during its Subsidiaries shall be conducted in the period ordinary and usual course consistent with past practice 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, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement to until the Effective Time Time, except (i) as otherwise contemplated by this Agreement, (ii) as Parent may approve in writing (such approval not to be unreasonably withheld or until termination of this Agreement delayed), (iii) as is required by applicable Law or any Governmental Entity or (iv) as set forth in accordance with Article 7 hereof):
(a) the business and operations Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries shall be conductedto:
(A) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments or other similar organizational documents of any of its Subsidiaries;
(B) merge or consolidate the Company or any of its Subsidiaries with any other Person, and the books and records except for any such transactions among wholly owned Subsidiaries of the Company and its Subsidiaries shall be maintainedCompany, only in or restructure, reorganize or completely or partially liquidate;
(C) acquire assets outside of the ordinary course of business and from any other Person or with a value or purchase price in the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services aggregate in excess of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill $5 million in any transaction or series of their respective businessesrelated transactions;
(bD) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issuesale, deliverpledge, sell disposition, grant, transfer, lease, license, guarantee or agree or commit to issueencumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable forother than (1) the issuance of 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 to the Company or another wholly owned Subsidiary), or optionssecurities convertible or exchangeable into or exercisable for any shares of such capital stock, warrantsor any options (including Company Options), calls, commitments warrants or other rights of any kind to acquire, 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 equity interests of than the Company or any direct or indirect wholly owned Subsidiary of the 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 any of its Subsidiaries); capital stock (except for dividends or other distributions by any direct or indirect wholly owned Subsidiary to the Company or to any wholly owned Subsidiary of the Company) or enter into any agreement with respect to the voting of its capital stock;
(iiiG) amendreclassify, modify split, combine, subdivide or waive redeem, purchase or otherwise acquire, directly or indirectly, any term of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than the acquisition of any outstanding Shares tendered by Employees in connection with the exercise of Company Options set forth in Section 5.1(b)(ii) of the Company Disclosure Letter in accordance with the terms of the Stock Plans);
(H) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (other than a wholly owned Subsidiary of the Company), 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 (A) as required by this Agreement, (B) as for borrowings and letter of credits issued under the Company’s existing revolving credit facility set forth in Section 5.01(b5.1(b)(ii) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock PlansLetter;
(cI) except as set forth in the capital budgets set forth in Section 6.1(a)(I) of the Company shall not 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;
(K) settle, release, waive or compromise any pending or threatened suit, action, claim, arbitration, investigation or litigation or other proceedings (i) sell, transfer for an amount in excess of $1 million or pledge, any obligation or agree to sell, transfer liability of the Company in excess of such amount (ii) entailing obligations that would impose any material restrictions on the business or pledge, any equity interest owned by it in operations of the Company or any of its Subsidiaries or alter through merger(iii) that is brought by any current, liquidation, reorganization, restructuring former or in any other fashion the corporate structure or ownership purported holder of any capital stock or debt securities of its Subsidiaries, (ii) amend the Company or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries relating to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockthe transactions contemplated by this Agreement;
(dL) make or change any material Tax election or tax accounting method, settle or compromise any material Tax liability other than quarterly dividends not in excess the ordinary course of $0.075 per Common Share declared and paid business consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property)practice, or make 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 any other distributions in respect ofassets, any product lines or businesses of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or its Subsidiaries, other than inventory, supplies and other assets in the ordinary course of business consistent with past practice;
(N) except as expressly contemplated by this Agreement, required pursuant to other wholly owned Subsidiaries Benefit Plans in effect prior to the date 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 practices);
practice, (e2) neither increase the Company nor any of its Subsidiaries shall (i) grant compensation, perquisites or agree benefits payable to any increase Employee, except, in any manner the compensation or benefits case of any current or former directorEmployees who are not Elected Officers of the Company, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements(3) grant any equity or equity-based awards that may be settled in Shares, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company preferred shares or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its SubsidiariesSubsidiaries or the value of which is linked directly or indirectly, guarantee in whole or in part, to the price or value of any debt securities of othersShares, enter into any “keep well” preferred shares or other agreement to maintain any financial statement condition of another person Company securities or enter into any arrangement having Subsidiary securities, (4) accelerate the economic effect vesting or payment of any of the foregoing; compensation payable or benefits provided or to become payable or provided to any Employee or (y5) sell, lease, license terminate or subject to materially amend any Lien or otherwise dispose ofexisting, or agree to selladopt any new, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Benefit Plan (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth changes made in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which or as may be necessary to comply with applicable Laws, in either case that do not materially increase the costs of any such Benefit Plans);
(O) except as required by applicable Laws, enter into, amend or extend any material collective bargaining agreement or other labor agreement;
(P) except to the extent 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), take any action to render inapplicable, or to exempt any third party from, any standstill arrangements or the provisions of any Takeover Statutes;
(Q) enter into, amend, cancel or modify any Material Contract or any Contract that would be a Material Contract if in effect on the date of this Agreement;
(R) cancel any debts or waive any claims or rights of substantial value (including the cancellation, compromise, release or assignment of any indebtedness owed to, or claims held by, the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunderSubsidiaries), except for cancellations made or (ii) waive, release, grant, assign, modify or transfer any of its material rights or waivers granted with respect to claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures indebtedness in the ordinary course of business consistent with past practices disclosed practice which, in Section 5.01(j) the aggregate, are not material or for claims other than indebtedness which are cancelled or waived in connection with the settlement of the actions referred to in, and to the extent permitted by, clause (K) above;
(S) fail to maintain in full force and effect the material insurance policies covering the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than and its Subsidiaries and their respective properties, assets and businesses in the ordinary course of business a form and amount consistent with past practices in excess of $500,000 in the aggregatepractices;
(kT) enter into any agreement with a New Jersey Governmental Entity pursuant to the Company shallNew Jersey Industrial Site Recovery Act, and shall cause its Subsidiaries toN.J.S.A. 13:1K-6, et seq. (“ISRA”) that could reasonably be expected to (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of require the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, establish a financial assurance exceeding $1 million or (ii) enter into any labor otherwise result in investigation or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different remediation liabilities of the Company exceeding $1 million in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;the aggregate; or
(mU) the Company shall notexcept as provided in Section 6.2 and Section 8.3(a), and shall not permit any of its Subsidiaries toagree, change authorize or commit to do any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company foregoing or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or which would result in any of the conditions to the Merger set forth in Article 6 VII not being satisfiedsatisfied or that would reasonably be expected to result in a Company Material Adverse Effect.
(b) The Company shall consult with Parent reasonably in 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 omitotherwise appoint or promote any current director, employee, independent contractor or agree consultant to omit, to take any action necessary to prevent any such representation an Executive Officer position or warranty from being inaccurate in (ii) adopt any material respect at any such time modification or material deviation from the Company’s annual operating plan, as previously provided to prevent any such condition from not being satisfied;Parent; and in each case shall consider in good faith the reasonable recommendations of Parent in connection therewith.
(oc) The Company shall, except as prohibited by applicable Law or as would jeopardize attorney-client privilege (but in such event, the Company shall notwill use its commercially reasonable efforts to keep Parent fully informed), and shall not permit any keep Parent informed, on a current basis, of its Subsidiaries to, make or change any material tax election events, discussions, notices or change an annual accounting period changes with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle criminal or compromise any Tax claim, assessment material regulatory investigation or liability relating to action involving the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (ReAble Therapeutics Finance LLC), Merger Agreement (Djo Inc)
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing required by Parentapplicable Law, the Company covenants shall use its reasonable best effort to conduct its business and agrees that during of its Subsidiaries’ in the period from the date of this Agreement Ordinary Course and, to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conductedextent consistent therewith, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company it and its Subsidiaries shall use their commercially respective reasonable best efforts to preserve intact their current business organizationsorganizations intact, keep available the services of their current officers and employees and preserve their relationships with including their material Intellectual Property Rights, Company Material Contracts and other material assets, and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, advertisersdistributors, distributors creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present officers, employees and agents, except as required by applicable Law. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the Effective Time, except as otherwise expressly (A) contemplated by this Agreement, (B) required by applicable Law, (C) as approved in writing (which approval shall not be unreasonably withheld, conditioned or delayed) by Parent or (D) set forth in the corresponding subsection of Section 6.1(a) of the Company Disclosure Letter, the Company shall not and shall 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 third parties having business dealings with them and to preserve the goodwill of their respective changes or restrictions on its assets, operations or businesses;
(biii) 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 shall notor 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 shall not permit any in accordance with the terms of its Subsidiaries toCompany 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;
(iiv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize for the issuance, issuesale, deliverpledge, sell disposition, grant, transfer, lease, license, guarantee or agree or commit to issueEncumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, Subsidiaries or any rights, warrants or options to acquire, acquire any such shares, securities or convertible securities shares or any other securities or equity equivalents (including“phantom” stock, without limitation“phantom” stock rights, stock appreciation rights or phantom interests)stock based performance units (other than the issuance of shares (A) by its wholly owned Subsidiary to it or another of its wholly owned Subsidiaries, except for issuances (B) in respect of Common Shares upon the exercise of Company Options outstanding as of the date hereof; of this Agreement in accordance with their terms and, as applicable, the Stock Plans as in effect on the date of this Agreement, or (iiC) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests Company Options issued to new employees of the Company or any of 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 (includingC) will (w) not exceed 150,000 Company Ordinary Shares in the aggregate on a fully diluted basis, without limitation(x) have terms consistent with grant terms and amounts as Company Options granted to similarly situated employees, securities exchangeable for(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, calls, commitments warrants or other rights of any kind to acquire, 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 equity interests of than to or from the Company or and any of its wholly owned Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating excess of one million dollars ($1,000,000) in the Options and the Stock Plansaggregate;
(cvi) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside aside, make or pay any dividends on (whether dividend or other distribution, payable in cash, stock stock, property or other property)otherwise, or make any other distributions in with respect of, to any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiaries Subsidiary to the Company it or to any other direct or indirect wholly owned Subsidiaries of the Company consistent with past practicesSubsidiary);
(evii) neither the Company nor reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its Subsidiaries shall capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, other than the withholding of Company Ordinary Shares to satisfy withholding Tax obligations upon the exercise, vesting or settlement of Company Options 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;
(iviii) grant or agree to incur any increase in any manner Indebtedness (including the compensation or benefits issuance of any current debt securities, warrants or former director, officer or employee, except increases other rights to acquire any debt security) in excess of one million dollars ($1,000,000) in the ordinary course of business consistent aggregate;
(ix) make or authorize any payment of, or accrual or commitment for, capital expenditures other than in accordance with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in the capital expenditures budget set forth on Section 5.01(e6.1(a)(ix) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, Letter;
(iix) enter into any new Contract that would have been a Company Material Contract that is specified in clause (iii), (vi), (vii), (ix), (xi), (xv) or materially amend (xvii) in Section 4.18(a) or any existing 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, transactionother than (1) expirations of any such Contract in the Ordinary Course in accordance with the terms of such Contract, commitment or arrangement with any current (2) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or former director, officer, employee or affiliate of other rights under Intellectual Property Rights owned by the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of each case, granted in the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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 hereofOrdinary Course;
(fxi) the Company shall notcancel, and shall not permit modify or waive any debts or claims held by it or any of its Subsidiaries toor 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 (x$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) institute any Proceeding by the Company or any Company Subsidiary, other than 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 business, or acquire or agree business that would be material to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; consolidated operations or (y) establish that would reasonably be expected to prevent, materially delay or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside materially impair the ability of the United States and its territorial possessionsCompany to consummate the Transactions;
(gxv) the Company shall notmake, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for change or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in revoke any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries toTax election, change any of the an annual Tax accounting policiesperiod, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make adopt or change any material tax election or change an annual Tax accounting period with respect to Taxesmethod, file any amended material Tax Return, enter into any closing agreementagreement with respect to material Taxes, settle or compromise any material Tax claim, audit, assessment or liability relating to the Company or any of its Subsidiariesdispute, or surrender any right to claim a refund of a material amount of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent agree to any an extension or waiver of the limitation period applicable to any Tax claim or assessment relating statute of limitations with respect to the assessment or determination of any material Tax, or 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 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 services provided in the Ordinary Course and sales of obsolete assets and except for sales, leases, licenses or take other 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 other similar action, or omit to take any action relating Intellectual Property Rights that are material to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit businesses of the Company or any of its Subsidiaries;
(pxviii) alter the operation or security of any IT Assets owned, used or 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 in respect of 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 the Company’s policies and procedures with respect to granting, amending or modifying awards and, with respect to grants of new awards, in accordance with Section 6.1(a)(iv), (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) 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 materially 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, (F) forgive any loans or issue any loans (other than routine travel advances issued in the Ordinary Course) to any Company Employee, (G) hire any employee or engage any independent contractor (who is a natural person) whose salary, wage rate or consulting fees (as applicable) and target cash bonus opportunity exceed $250,000 in the aggregate on an annual basis or (H) 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 change in control, other than, in each case, for 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;
(xxi) 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 any of the 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 to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing (i) 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 commercially reasonable efforts tobest effort to conduct its business and that of its Subsidiaries’ in the Ordinary Course and, to the extent consistent therewith, it and shall cause its Subsidiaries to shall use their respective commercially reasonable best efforts toto preserve their business organization intact, prevent including their material Intellectual Property Rights, material Contracts and other material assets, and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the termination services of any Contract with any Significant Customerit and its Subsidiaries; present officers, employees and agents, except as required by applicable Law. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the Effective Time, except as otherwise expressly (A) contemplated by this Agreement, (iiB) required by applicable Law, (C) as approved in writing (which approval shall not be unreasonably withheld, conditioned or delayed) by the Company, (D) as set forth on the corresponding subsection of Section 6.1(b) of the Parent Disclosure Letter or (E) in connection with or required to effectuate the Stock Split, the Sale Transactions, Parent 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 prevent, amend materially delay or modify materially impair the ability of Parent to consummate the Transactions; provided, that any Contract with any Significant Customer, other than on terms substantially equivalent to, amendment to Parent’s certificate of incorporation to increase the authorized number of shares or more beneficial on balance to series of the Company capital stock of Parent shall in no way be restricted by the foregoing;
(ii) merge or consolidate itself or any of its Subsidiaries thanwith any other Person or restructure, the terms of consolidate, recapitalize, reorganize or completely or partially liquidate, dissolve, in each case, except for any such Contract prior to the making of such amendment transactions among its wholly owned Subsidiaries or modification, and any Parent Permitted Acquisitions;
(iii) notissue, and shall cause its Subsidiaries not tosell, enter intopledge, dispose of, grant, transfer, encumber, or materially amendauthorize the issuance, modify sale, pledge, disposition, grant, transfer, lease, license, guarantee or supplementEncumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of, any Lease or other Material Contract under which the costs or obligations shares of the Company capital stock of Parent or any of its Subsidiaries resulting from or any right, warrants or options to acquire such amendmentshares or any “phantom” stock, modification “phantom” stock rights, stock appreciation rights or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.stoc
Appears in 2 contracts
Sources: Merger Agreement (Rada Electronic Industries LTD), Merger Agreement (Leonardo DRS, Inc.)
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing (which such approval shall not be unreasonably withheld, conditioned or delayed), and except (i) as otherwise expressly contemplated by this Agreement or Agreement), (ii) as required by applicable Laws and (iii) as set forth in Section 5.01 6.1(a) of the Company Disclosure Schedule or as consented to in writing by ParentLetter, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries taken as a whole (the “Business”) shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and consistent with past practice in all material respects and, to the Company extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve intact their current collective business organizationsorganizations intact, maintain their material Licenses that are integral to the operation of the Business as currently conducted and keep available the services of their current officers its and its Subsidiaries’ present employees and preserve their relationships agents who are integral to the operation of the Businesses as currently conducted and use commercially reasonable efforts to maintain, in all material respects, existing relations and goodwill with their material Governmental Entities, customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings employees whom, in the reasonable discretion of the Company, are currently engaged in relationships with them and the Company and/or its Subsidiaries that are integral to preserve the goodwill operation of their respective businesses;the Business as currently conducted; provided, however, that any action which the Company and/or its Subsidiaries 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) In furtherance of the foregoing Section 6.1(a), from the date hereof until the Effective Time, except (A) as otherwise expressly contemplated by this Agreement, (B) as required by applicable Law, (C) as Parent may approve in writing (which such approval shall not be unreasonably withheld, conditioned or delayed), or (C) as set forth in Section 6.1(b) of the Company Disclosure Letter, the Company shall not, not and shall not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or by-laws or similar organizational documents other than any administrative or ministerial changes made to any certificate of incorporation or by-laws or similar organizational documents of any Subsidiary of the Company 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 towith 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) authorize for issuanceacquisitions 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 exceed $2,000,000, individually or in the aggregate;
(iv) issue, deliver, sell sell, pledge, dispose of, grant, transfer, encumber, or agree authorize the issuance, delivery, sale, pledge, disposition, grant, transfer, or commit to issueencumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable forother 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, calls, commitments warrants or other rights of any kind to acquire, 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 equity interests 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 of its Subsidiaries); direct or (iii) amend, modify or waive any term of any outstanding security indirect wholly-owned Subsidiary of the Company or any of its Subsidiaries, except Company);
(vi) (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside aside, make or pay any dividends on (whether dividend or other distribution, payable in cash, stock stock, property or other property)otherwise, or make any other distributions in with respect of, to any of its capital stock (except for dividends paid by any direct or indirect wholly wholly-owned Subsidiaries Subsidiary to the Company or to any other wholly direct or indirect wholly-owned Subsidiaries 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 consistent with past practices);
(e) neither to the Company nor or another wholly-owned Subsidiary of the Company, (ii) purchases, redemptions or 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 any of its Subsidiaries shall (i) grant and any director or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except the issuance of Shares in respect of Company Options, Company RSUs and/or the Company Warrant outstanding as set forth in Section 5.01(e) of the Company Disclosure Scheduledate of this Agreement in accordance with their terms and, as may be required to comply with applicable Law and applicable, the Stock Plans as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence effect on the date hereof or amend or modify or terminateof this Agreement, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (xC) enter into any new line agreement with respect to the voting of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or its capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionsstock;
(gvii) the Company shall not, and shall not permit incur any of its Subsidiaries to, (x) incurindebtedness for borrowed money, assume, be guarantee, endorse or otherwise become responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations indebtedness of another personPerson, issue or sell, or agree to issue or sell, sell any debt securities or options, warrants or calls or other rights to acquire any debt securities security of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement Contract to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; foregoing that, individually or in the aggregate, exceeds $5,000,000;
(yviii) sell, lease, license make or subject to authorize any Lien or otherwise dispose payment of, or agree to sell, lease accrual or subject to any Lien or otherwise dispose ofcommitment for, any of its properties or assets capital expenditure in excess of $25,000 individually or $50,000 4,000,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiariesaggregate;
(hix) neither the Company nor enter into (A) any of its Subsidiaries shall adopt or put into effect Contract that would have been a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Material Contract (other than any transaction specifically contemplated by this Agreement);
Contract described in clause (i) except as set forth in Section 5.01(iD) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (iSection 5.1(l)(i)) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments had it been entered into prior to the date hereof of this Agreement or (B) any Company Intellectual Property Agreement, other planned capital expenditures than (in the case of clause (B) only) in the ordinary course of business consistent with past practices disclosed in Section 5.01(jpractice;
(x) of the Company Disclosure Schedule by category) or make any commitments changes with respect to capital expenditures accounting policies or other planned capital expenditures other than in procedures, except to the ordinary course of business consistent with past practices in excess of $500,000 in the aggregateextent required by GAAP or SEC rules and regulations;
(kxi) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary settle or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor unioncompromise, or offer or propose to settle or compromise, any actions, suits, claims, hearings, arbitrations, litigations, investigations or other proceedings before a Governmental Entity (iieach a “Proceeding”) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
if the foregoing would (mA) require the Company shall not, and shall not permit any payment of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used 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 as of September 30, 2012 and any applicable insurance coverage, or (B) involve any injunctive or other non-monetary relief which, in either case, imposes material restrictions on the date hereofbusiness operations of the Company and its Subsidiaries, except as may be required taken as a result of a change in applicable Law or in GAAPwhole;
(nxii) the Company shall not(A) make, and shall not permit any of its Subsidiaries to, take, change or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in rescind any material respect atTax election, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in (B) file any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to Return of the Company or any of its the Subsidiaries, (C) adopt or change any material method or period of Tax accounting, (D) settle or compromise any material Tax claim, (E) surrender any right to material claim for a refund of Taxes, except as set forth in Section 5.01(o(F) of the Company Disclosure Scheduleenter 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 limitation period applicable to any material Tax claim or assessment relating (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business);
(xiii) transfer, sell, lease, assign, license, mortgage, subject to Liens (other than Permitted Liens), pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets (including Intellectual Property), 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 to any director, officer or employee of the Company or any of its Subsidiaries, (B) increase in any manner the compensation, bonus, pension, welfare, fringe, severance or take other benefits of, pay any other similar actionbonus to, or omit make any new equity awards to any current or former director, officer, employee or consultant of the Company or any of its Subsidiaries, (C) 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 relating 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 filing extent not already provided in any such Benefit Plan, (E) enter into any 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 Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, (G) terminate without cause the employment of any Tax Return executive officer of the Company, or (H) forgive any loans or issue any loans to directors, officers or employees of the payment Company or any of its Subsidiaries (other than travel and relocation expense advances in immaterial amounts made in the ordinary course of business consistent with past practice to employees of the Company and its Subsidiaries);
(xv) implement or announce any Taxplant closing, if such election, adoption, change, amendment, agreement, settlement, surrender, consent material reduction in labor force or other action layoffs of employees that would be expected to incur liability under the WARN Act (or omission would have the effect of materially increasing the present any similar state, local or future Tax liability or materially decreasing any present or future Tax benefit of foreign Law) with respect to the Company or any of its Subsidiaries;
(pxvi) enter into any joint venture through a general partnership, limited partnership, limited liability company or similar strategic alliance vehicle or other similar arrangement, with any Person (for purposes of clarity, the foregoing does not include any advertising, content, affiliate, marketing or supplier agreements entered into by the Company shall in the ordinary course of business, whether or not referred to colloquially as partnerships, strategic relationships or otherwise described with similar phrases);
(ixvii) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of enter into any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to transaction between the Company or any of its Subsidiaries thanSubsidiaries, on the terms of such Contract prior to the making of such amendment or modificationone hand, and any (iiii) not, and shall cause its Subsidiaries not to, enter into, officer or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations director of the Company or any of its Subsidiaries resulting from Subsidiaries, (ii) Affiliate or family member of any such amendmentofficer or director or (iii) record or beneficial owner of five percent (5%) or more of the voting securities of the Company or any Affiliate or family member of such record or beneficial owner, modification or supplement on the other hand, in each case of a type that would exceed $25,000 per annum individually or $100,000 per annum for all such amendmentsbe required to be disclosed under Item 404 of Regulation S-K under the Securities Act (other than (A) grants of Company Options made to new hires in a manner and amount generally consistent with past practice, modifications and supplements in (B) grants of Company RSUs made to members of the aggregateCompany’s board of directors on their respective appointment anniversary dates); andor
(qxviii) the Company shall notagree, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (KAYAK Software Corp), Merger Agreement (Priceline Com Inc)
Interim Operations. (a) Except (i) as otherwise contemplated expressly contemplated, required or permitted by this Agreement Agreement, (ii) as required by applicable Law, (iii) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned), (iv) as set forth in on Section 5.01 6.1 of the Company Disclosure Schedule Schedule, or as consented (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 writing by Parentreliance on this clause (v), to the extent permitted under applicable Law and practicable under the circumstances, the Company covenants shall provide prior notice to and agrees that during the period consult in good faith with Parent prior to taking such action), from the date of this Agreement until the earlier to occur of the Effective Time (or until termination of this Agreement in accordance with pursuant to Article 7 hereof):
(a) VIII and the business and operations of Effective Time, the Company will, and will cause its Subsidiaries shall be conductedto, use its and the books and records of the Company and its Subsidiaries shall be maintained, only their commercially reasonable efforts to (A) conduct their businesses in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to (B) preserve intact their current business organizations, keep available the services of their current officers organizations and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other Persons with which it has material third parties having business dealings dealings; provided that no action by the Company or its Subsidiaries with them and respect to preserve the goodwill matters specifically addressed by any provision of their respective businesses;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 shall not permit any of will cause its Subsidiaries not to, :
(i) authorize for issuance, issue, deliver, sell (x) adopt any change in the certificate of incorporation or agree bylaws of the Company or commit to issue, sell or deliver (whether through y) adopt any change in the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock comparable organizational document of any of its the Company’s Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; ;
(ii) repurchase, redeem merge or otherwise acquire any shares of the capital stock or other equity interests of consolidate the Company or any of its Subsidiaries (including, without limitation, securities exchangeable forwith any other Person, or optionsrestructure, warrantsreorganize, callsrecapitalize or completely or partially liquidate or dissolve or otherwise enter into any agreement or arrangement imposing restrictions on the assets, commitments operations or rights of any kind to acquire, capital stock or other equity interests business of the Company or any of its Subsidiaries); or ;
(iii) amendissue, modify sell, pledge, dispose of or waive encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any term shares of any outstanding security capital stock of the Company or any of its Subsidiaries, except 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) as required by this Agreementany 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 set forth in Section 5.01(b) of the Company Disclosure Scheduledate of this Agreement in accordance with their terms, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansincurrence of any Permitted Liens;
(civ) make any loans, advances or capital contributions to or investments in any Person (other than (A) to the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in 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);
(v) declare, set aside, make or alter through mergerpay any dividend or other distribution, liquidationpayable in cash, reorganizationstock, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend property or otherwise change its certificate of incorporation or bylaws or permit with respect to any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit 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 of its Subsidiaries to split, combine capital stock or reclassify securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid (A) any such transaction by direct or indirect a wholly owned Subsidiaries 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 to other wholly owned Subsidiaries (C) payment of the exercise price in respect of Company consistent with past practicesOptions, 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);
(evii) neither create, incur, assume or guarantee any Indebtedness for borrowed money or issue any debt securities or guarantees of the same or any other Indebtedness, except for (A) borrowings in the ordinary course of business 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 and is not reasonably expected to cause the Payment Condition (as defined in the ABL Credit Agreement) to fail to be satisfied on, or as of, the Closing Date, (B) guarantees or credit support provided by the Company nor or any of its Subsidiaries shall of the obligations of the Company or any of its Subsidiaries in the ordinary course of business to the extent such Indebtedness is in existence on the date of this Agreement or incurred in compliance with clause (iA) grant of this Section 6.1(b)(vii), and (C) any Indebtedness solely among the Company and its wholly-owned Subsidiaries or agree 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 increase in any manner the compensation capital expenditure or benefits of any current or former director, officer or employeeexpenditures, except increases 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;
(ix) other than in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (iiA) enter into any new 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 materially amend (C) shall be entered into without the prior written consent of Parent, or (B) amend, modify or waive in any existing Contractmaterial respect or terminate any Material Contract in a 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, transactionexcept as required by Law, commitment proposed Law or arrangement by U.S. GAAP or official interpretations with respect thereto or by any current Governmental Authority or former director, officer, employee quasi-Governmental Authority (including the Financial Accounting Standards Board or affiliate any similar organization);
(xi) settle any Action for an amount in excess of $1 million individually or $5 million in the aggregate other than (A) any settlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries, Subsidiaries is fully covered by insurance coverage or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, retention amounts maintained by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” Subsidiaries and (B) settlements or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect compromises of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets Action for an amount not materially in excess of $25,000 individually the amount, if any, reflected or $50,000 specifically reserved in the aggregate other than balance sheet (i) pursuant to existing contracts and commitments described in Section 5.01(gor the notes thereto) of the Company Disclosure Scheduleincluded in the Company Reports (with materiality measured relative to the amount so reflected or reserved, (ii) immaterial properties or assets (or immaterial portions if any); provided that, in the case of properties or assets described in Section 5.01(g) each of the Company Disclosure Scheduleforegoing clauses (A) and (B), the settlement or compromise of such Action does not (iiix) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than impose any non-taxable transfers by de minimis restriction on the business or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization operations of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit or Parent or any of its Subsidiaries to, after the Closing) and (iy) enter intoinclude any non-de minimis non-monetary or injunctive relief, or materially amendthe admission of wrongdoing, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which by the Company or any of its Subsidiaries shall have monetary obligations in excess or any of $25,000 their respective officers or directors;
(xii) sell, lease, license, encumber (other than Permitted Liens), abandon, permit to lapse, or otherwise dispose of any material assets or property (including any material Intellectual Property Rights) except (A) pursuant to existing contracts or commitments (or refinancings thereof), (B) as may be necessary for required by a Governmental Authority to permit or facilitate the consummation of the Merger or any of the other transactions contemplated in this Agreement solely to the extent required pursuant to Section 6.5, (C) transactions among the Company to comply with and its obligations hereunder)wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, or (iiD) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed and in Section 5.01(jno 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 Disclosure Schedule 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 categorypurchase 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) impair the ability of the Merger to be consummated in compliance with any “merger” or “fundamental changes” covenant in the Existing Credit Documents or (E) amend 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 with respect to capital expenditures thereunder;
(xvi) implement or other planned capital expenditures announce any permanent plant closings or permanent facility shutdown that would implicate the WARN Act;
(xvii) other than in the ordinary course of business or consistent with past practices practice (A) 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 $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries toamounts reserved, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (iiE) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other material closing agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(mF) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund material Tax refund, offset or other reduction in liability for an amount materially in excess of Taxesamounts reserved (it being agreed and understood that, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take notwithstanding any other similar actionprovision, or omit neither Section 6.1(b)(xi) nor Section 6.1(b)(xviii) (insofar as it relates to take any action relating Section 6.1(b)(xi)) shall apply to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;compliance matters); or
(pxviii) the Company shall (i) use its commercially reasonable efforts toagree, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, 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 the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
(d) Subject to the terms of this Agreement, including Section 6.5 and Section 6.13, from the date of this Agreement until the 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 a Specified Acquisition, as applicable, would reasonably be expected 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 contemplated by this Agreement, including the Merger; or (iii) take any action that would reasonably be expected to prevent, materially impair or materially delay the consummation of the 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) Except as otherwise contemplated (i) required by this Agreement Agreement, (ii) required by applicable Law, (iii) approved in writing by Parent (such approval not to be unreasonably withheld, delayed or as conditioned) or (iv) set forth in on Section 5.01 6.1(a) of the Company Disclosure Schedule or as consented to in writing by ParentSchedule, the Company covenants and agrees that during the period 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 Effective Time extent consistent therewith, the Company shall, and shall cause its Subsidiaries to, use its and their reasonable best efforts to preserve their business organizations intact (including the 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 until termination 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 in accordance with Article 7 hereof):until the Effective Time, the Company will not, and will cause its Subsidiaries not to:
(ai) (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 operations business of the Company and its Subsidiaries shall taken as a whole that would be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts adverse to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit Parent or any of its Subsidiaries toor (y) restructure, (i) authorize for issuance, issue, deliver, sell reorganize or agree completely or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge partially liquidate or otherwise encumber enter into any shares of its capital stock agreement or arrangement imposing, individually or in the capital stock of any of its Subsidiariesaggregate, any other securities changes or any securities convertible restrictions on the assets, operations or exercisable intobusiness or on the assets, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests operations and business of the Company or any of its Subsidiaries that would be adverse to Parent or any of its Subsidiaries;
(includingiii) acquire (by merger, without limitationconsolidation, securities exchangeable foracquisition 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 Disclosure Schedule, or options(D) any other acquisitions for consideration that are not in excess of $5,000,000 in the aggregate;
(iv) issue, warrantssell, callspledge, commitments dispose of, grant, transfer, encumber, or rights 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 any kind to acquire, capital stock or other equity interests 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 wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries that would not be adverse to Parent or any of its Subsidiaries, or (iiiB) amendany issuance, modify sale, grant or waive transfer of Shares pursuant to (1) the exercise or settlement of Company Options or Company RSU Awards outstanding as of the date of this Agreement or granted after the date of this Agreement not in violation of this Agreement or (2) the grant of Company Restricted Share Awards after the date of this Agreement not in violation of this Agreement;
(v) make any term loans, advances or capital contributions to any Person (other than (A) to the Company or any of its wholly-owned Subsidiaries, (B) pursuant to any Contract described in clause (F) of the definition of a “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, 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 wholly-owned Subsidiary of the Company to the Company or to any other wholly-owned Subsidiary of the Company and (B) regular quarterly dividends to shareholders of the Company by the Company in an amount not to exceed $0.18 per Share, in each case declared and paid at such times as is consistent with historical practice over the most recent fiscal year ended prior to the date of this Agreement);
(vii) 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 (except for (A) any such transaction by a wholly-owned Subsidiary of the Company that would not be adverse to Parent or any of its Subsidiaries and (B) acquisitions of Shares in satisfaction of withholding obligations in respect of Company Options, Company Restricted Share Awards or Company RSU 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);
(viii) create, incur, assume, guarantee, endorse, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money, 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 (A) as required by this Agreementindebtedness for borrowed money in an amount not to exceed $10,000,000 in the aggregate that is (1) on terms not materially less favorable in the aggregate than the Company’s existing indebtedness or (2) prepayable at any time at par (plus customary floating rate breakage costs, if applicable), (B) as set forth in Section 5.01(b) guarantees of indebtedness of the Company Disclosure Scheduleor any of its wholly-owned Subsidiaries, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) intercompany indebtedness between or among the Company and/or any of its wholly-owned Subsidiaries and (D) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any financing of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases accounts payable in the ordinary course of business consistent with past practice, increases ;
(ix) other than in accordance with the Company’s capital expenditure budget made available to Parent prior to the date of this Agreement and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required incur or commit to comply with applicable Law and as provided any capital expenditure or otherwise contemplated expenditures, except capital expenditures of less than $1,000,000 individually or $10,000,000 in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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 hereofaggregate;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent or in connection with past practices in excess any matter to the extent such matter is expressly permitted by any other clause of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries tothis Section 6.1(b), (iA) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit enter into any insurance policy naming Contract that would have been a Material Contract had it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, been entered into prior to the imposition date of this Agreement or (B) amend or modify in any Lien material respect or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property assign (other than assignments between or contest them in good faith;
(l) except as set forth in Section 5.01(l) of among the Company Disclosure Schedule, the Company shall not, and shall not permit and/or any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement that would not be adverse to Parent or any of its Subsidiaries) or terminate any Material Contract, other agreement or commitment to or relating to than expirations of any labor unionsuch Contract in accordance with its terms; provided, or (ii) however, that in no event may the Company enter into any labor Contract described in clause (B) or collective bargaining agreement, memorandum or understanding, grievance settlement (E) of the definition of a “Material Contract” or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitmentSpecified Contract, except, in each case, as required by Law;
(m) the Company shall not, and shall would not permit be adverse to Parent or any of its Subsidiaries tofollowing 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 Financial 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 accounting policies, practices or procedures United States that is (including tax accounting policies, practices and proceduresx) used by a direct Subsidiary of the Company or any of its domestic Subsidiaries as of the date hereof, except as may be required and (y) treated as a result of a change in applicable Law “disregarded entity” or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, takepartnership for U.S. federal income tax purposes, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty knowingly create a permanent establishment of the Company contained in this Agreement inaccurate in or any domestic Subsidiary outside the United States, (D) file any material respect atamended Tax Return, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in (E) adopt any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall notaccounting method for Taxes, and shall not permit any of its Subsidiaries to, make other than consistent with past practice or change any material tax election or change an annual accounting period with respect to method for Taxes, file any amended Tax Return, enter into any closing agreement, (F) settle or compromise any Tax claimclaim for an amount in excess of $2,000,000 individually or $25,000,000 in the aggregate, assessment other than with respect to settlements or liability relating compromises of any Tax claim for an amount that does not exceed the amount disclosed, reflected or reserved in accordance with U.S. GAAP in the Company Reports filed prior to the Company or any date of its Subsidiariesthis Agreement, or (G) surrender any right to material claim for a refund of Taxes, except as set forth (H) enter into any closing agreement relating to a material amount of Taxes or (I) other than in Section 5.01(o) the ordinary course of the Company Disclosure Schedulebusiness, consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating 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, or take any other similar action, or omit to take any action relating to the filing including capital stock of any Tax Return of its Subsidiaries, except for sales in the ordinary course of business consistent with past practice and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets having a value not in excess of $1,000,000 individually or $10,000,000 in the payment aggregate;
(xv) except as required by any Benefit Plan in effect as of the date of this Agreement or adopted or entered into in accordance with this 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) increase in any manner the compensation, benefits, severance or termination pay of any Taxof the current or former (x) directors, if such election, adoption, change, amendment, agreement, settlement, surrender, consent (y) executive officers or other action (z) employees or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit consultants who are natural persons of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts towith target total annual cash compensation opportunities (i.e., prevent base pay or base rate and short term cash incentive target amounts) in excess of $300,000; (C) increase in any manner the compensation, benefits, severance or termination pay of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend employees or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations consultants who are natural persons of the Company or any of its Subsidiaries resulting from such amendmentwith target total annual cash compensation opportunities at or below $300,000, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements other than in the aggregateordinary course of business consistent with past practice; andprovided, that (x) any such increase in 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 (y) any such bonus (or increase in bonus) or similar incentive payment is awarded in recognition of the recipient’s performance in the 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 other 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, such arrangement is in all material respects in the form that has been provided to Parent as of the date of this Agreement) and for separation agreements entered into with terminated employees who are not executive officers in the ordinary course of business consistent with past practice); (G) take any action to accelerate the payment of, or to fund or secure the payment, of 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 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
(qxvi) the Company shall notagree, and shall not permit any of its Subsidiaries to, 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 North America that is in the grocery industry and operates physical retail stores if (i) such acquisition of control or (ii) entr
Appears in 2 contracts
Sources: Merger Agreement, Merger Agreement (Amazon Com Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period as to itself and its Subsidiaries that, from the date of this Agreement to until the earlier of the Gulf Effective Time (or until and the termination of this Agreement in accordance with pursuant to Article 7 hereof):
(a) the business and operations of VIII, the Company shall, and shall cause each of its Subsidiaries shall be conductedto, conduct their respective businesses in the Ordinary Course and, to the extent consistent therewith, the Company shall, and the books and records shall cause each of the Company and its Subsidiaries shall be maintainedto, only in the ordinary course of business and the Company and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve their business organizations intact their current business organizationsand maintain existing relations and goodwill with Governmental Entities, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisersdistributors, distributors creditors, lessors, employees and other material third parties business associates having significant business dealings with them and keep available the services of 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 (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 the termination of this Agreement pursuant to preserve Article VIII, except as otherwise expressly (A) contemplated by this Agreement, (B) required by applicable Law, (C) as approved in writing by Parent (which approval shall not be unreasonably withheld, conditioned or delayed), (D) required under any Material Contract or (E) set forth in Section 6.1 of the goodwill Company Disclosure Letter, the Company shall not and shall cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate itself or any of their respective 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;
(biii) 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 shall notor Parent, and shall not permit any of its Subsidiaries toas applicable, to consummate the Transactions prior to the Outside Date;
(iiv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize for the issuance, issuesale, deliverpledge, sell disposition, grant, transfer, lease, license, guarantee or agree or commit to issueEncumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or the capital stock of any of its Subsidiaries (other than (A) the F▇▇▇▇▇▇▇ Agreement or (B) the issuance of shares (i) by its wholly owned Subsidiary to it or another of its wholly owned Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances ii) in respect of Common Shares upon the exercise of Options Company RSUs outstanding as of the date hereof; 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 (iiiii) repurchasein connection with the exercise of warrants outstanding as of the date of this Agreement, redeem or otherwise acquire securities convertible or exchangeable into or exercisable for any shares of the such capital stock stock, or any options, warrants or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, acquire any shares of such capital stock or other equity interests 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 Company 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 (iii) amend, modify other than to or waive any term of any outstanding security of from the Company or and any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options wholly owned Subsidiaries or to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options from Parent and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its wholly owned Subsidiaries, (iias applicable) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, 200,000 individually or $500,000 in the Company shall not, and shall not permit any of its Subsidiaries to, aggregate;
(vii) declare, set aside aside, make or pay any dividends on (whether dividend or other distribution, payable in cash, stock stock, property or other property)otherwise, or make any other distributions in with respect of, to any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiaries Subsidiary to the Company it or to any other direct or indirect wholly owned Subsidiaries of the Company consistent with past practicesSubsidiary);
(eviii) neither the Company nor reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its Subsidiaries shall capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock, other than the withholding of shares of Company Common Stock to satisfy withholding Tax obligations upon the vesting or settlement 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;
(iix) grant or agree to incur any increase in any manner Indebtedness (including the compensation or benefits issuance of any current debt securities, warrants or former director, officer or employeeother rights to acquire any debt security), except increases for (A) Indebtedness for borrowed money incurred in the ordinary course Ordinary Course not to exceed $200,000 individually or $500,000 in the aggregate, or (B) Indebtedness in replacement of business existing Indebtedness for borrowed money on terms substantially consistent with past practiceor more favorable to the Company than the Indebtedness being replaced;
(x) except to the extent expressly provided by, increases and bonuses expressly required under existing employment agreementsconsistent with the line items set forth in, bonus plans and other agreements and arrangements listed or described the Company’s capital budget set forth in Section 5.01(e6.1(a)(x) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock PlansLetter, make or authorize any payment of, or accrual or commitment for, capital expenditures;
(iixi) enter into any new Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement or materially amend or modify in any existing 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, transactionother than expirations of any such Contract in the Ordinary Course in accordance with the terms of such Contract;
(xii) cancel, commitment modify or arrangement 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;
(xiii) settle any Proceeding for an amount in excess of $200,000 individually or $500,000 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 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 current line of business in any geographic area, other than the existing lines of business of the Company and its Subsidiaries solely within the United States;
(xvi) materially modify, cancel, terminate, rescind or former directoradversely affect any Company Material License;
(xvii) other than in the Ordinary Course, officermake, employee change or affiliate 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 taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its Affiliates;
(xviii) 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 the Company or any of its Subsidiaries, including capital stock of the Company and any of its Subsidiaries, except in connection with non-exclusive licenses or services provided in the Ordinary Course and sales of obsolete assets and except for sales, leases, licenses or other dispositions of tangible assets (iiinot including services) with a fair market value not in excess of $200,000 individually or $500,000 in the aggregate;
(xix) cancel, abandon or otherwise allow to lapse or expire any material Company Intellectual Property Rights that are Registered;
(xx) except as set forth required pursuant to the terms of any Company Benefit Plan in Section 5.01(e) effect as of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in date of this Agreement or in the Ordinary Course, (includingA) increase the compensation or consulting fees, without limitationbonus, Section 2.02 hereof)pension, welfare, fringe or other benefits, severance or termination pay of any Company Employee, (B) become obligated under a party to, establish, adopt, amend, commence participation in or terminate any Company Benefit Plan or any arrangement that was not in existence on the date hereof 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, (D) take any action to accelerate the vesting or terminatelapsing of restrictions or payment, or pay fund or in any benefit that 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 not required by, any Benefit Plan a natural person) with an annual salary or other employee benefit plan wage rate or any agreement, arrangement, plan or policy for the benefit consulting fees in excess of any current or former director, officer or employee in existence on the date hereof$250,000;
(fxxi) the Company shall not, and shall not permit any of its Subsidiaries 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;
(xxxii) enter 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 advertising and marketing activities), in connection with entering into any new geographic area or new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(gxxiv) the apply or seek to apply for any license that, if granted, would be reasonably expected to be a Company shall notMaterial License had it been granted prior to date of this Agreement; or
(xxv) agree, and shall not permit authorize or commit to do any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guaranteethe foregoing. Notwithstanding the foregoing, any such Indebtedness action or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of inaction taken by the Company or any of its Subsidiaries, guarantee 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 debt securities of othersquarantine, enter into “shelter in place,” “stay at home,” social distancing, shut down, closure, sequester, safety, or similar Law, directive, guidelines or recommendations promulgated by any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having Governmental Entity, including the economic effect of any Centers for Disease Control that is outside of the foregoing; or 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.
(yb) sellParent covenants and agrees as to itself and its Subsidiaries that, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any from the date of its properties or assets in excess this Agreement until the earlier of $25,000 individually or $50,000 in the aggregate other than (i) Gulf Effective Time and the termination of this Agreement pursuant to existing contracts and commitments described in Section 5.01(g) of Article VIII (unless the Company Disclosure Scheduleshall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), except as otherwise expressly (A) contemplated by this Agreement, (iiB) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule)required by applicable Law, (iiiC) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as required under Contracts to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company Parent or any of its Subsidiaries is a party or (other than any transaction specifically contemplated by this Agreement);
(iD) except as set forth in on Section 5.01(i6.1(b) of the Company Parent Disclosure ScheduleLetter, the Company Parent shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) 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, amend that any amendment to Parent’s articles of incorporation to increase the authorized number of shares or modify series of the capital stock of Parent shall in no way be restricted by the foregoing;
(ii) declare, set aside, make or pay any Contract dividend or other distribution, payable in cash, stock, property or otherwise, with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance respect to the Company or any of its Subsidiaries than, the terms of such Contract prior capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiary to the making of such amendment it or modification, and to any other direct or indirect wholly owned Subsidiary);
(iii) notsplit, and shall cause its Subsidiaries not tocombine, enter into, reduce or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or reclassify any of its Subsidiaries resulting from such amendmentissued or unissued shares of its capital stock, modification or supplement issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, any shares of its capital stock in any manner that would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications reasonably be expected to have a material and supplements in adverse impact on the aggregatevalue of the Parent Class A Common Stock; andor
(qiv) the Company shall notagree, and shall not permit any of its Subsidiaries to, 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 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 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 6.1 or elsewhere in this Agreement to the extent that the requirement of such 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. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from From the date of this Agreement to until the earlier of the Effective Time (or until and termination of this Agreement in accordance with Article 7 hereof):
its terms, the Company covenants and agrees as to itself and its Subsidiaries that it will use its commercially reasonable efforts, from the date of this Agreement until the Effective Time, unless Parent shall otherwise approve in writing, 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 use their respective commercially reasonable efforts to (a) preserve their business organizations, assets and lines of business intact, (b) maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations that are material to the business Company and operations of 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 Company and its Subsidiaries shall be conducted, and the books and records of the Company and necessary to conduct its Subsidiaries shall be maintained, only business in the ordinary course of business consistent with past practice (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 (d) maintain in all material respects its and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizationsexisting relations and goodwill with Governmental Entities, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors employees and other material third parties having business dealings with them and to preserve agents. Without limiting the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as generality of the foregoing and in furtherance thereof, from the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of this Agreement until the earlier of the capital stock or other equity interests Effective Time and the termination of the Company or any of this Agreement in accordance with its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiariesterms, except (A) as otherwise expressly required by this Agreement, (B) as Parent may approve in writing, (C) as required by applicable Laws or definitive interpretations thereof or by any Governmental Entity, or (D) as set forth in Section 5.01(b4.1(a) of the Company Disclosure ScheduleLetter, the Company will not, and will not permit its Subsidiaries, to:
(i) adopt any amendments to its charter or bylaws or, in connection with accelerating the vesting schedules case of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansany Subsidiary that is not a corporation, similar applicable organizational documents;
(cii) the Company shall not (iA) selladopt a plan of complete or partial liquidation, transfer or pledgedissolution, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidationconsolidation, reorganizationbusiness combination, restructuring restructuring, recapitalization or in any other fashion the corporate structure or ownership of any of its Subsidiariesreorganization (other than this Agreement), (iiB) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or by purchasing an equity interest in or portion of the assets or capital stock or of (other equity interests ofthan 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 thereof, (C) take or omit to take any action that would cause any rights under Material Intellectual Property, including with respect to any registrations or applications for registration, to lapse, be abandoned or canceled, or fall into the public domain, other than acquisitions actions or purchases made omissions in the ordinary course of business consistent with the prior written consent past practice and not otherwise in violation of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; this Section 4.1, or (yD) establish enter into a joint venture or acquire (i) any Subsidiary other than whollypartnership or similar third-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionsparty business enterprise;
(giii) acquire assets or capital stock from any other Person, other than (A) in the Company shall not, and shall not permit any ordinary course of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; business consistent with past practice or (yB) sell, lease, license acquisitions of assets at or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets below fair market value with a purchase price not in excess of $25,000 500,000 individually or $50,000 7,500,000 in the aggregate other than (i) pursuant to existing contracts and commitments described aggregate, in Section 5.01(g) each case for any transaction or series of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, related transactions;
(iv) Liens relating to Taxes that are not yet due and payable issue, sell, pledge, dispose of, grant, transfer, encumber, or otherwise being contested in good faith and as to which appropriate reserves have been established by authorize the Company in accordance with GAAP and (v) other than non-taxable transfers by issuance, sale, pledge, disposition, grant, transfer or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor encumbrance of, any shares of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization 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 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 transaction specifically contemplated by 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 acquire any shares of such capital stock or such convertible, exchangeable or exercisable securities;
(iv) except as set forth other than ordinary course trade credit made in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent 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 $1,000,000 in the aggregate at any time;
(vi) (A) declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or other property, with past practice under which respect to its capital stock, except for dividends by any wholly owned direct or indirect Subsidiary of the Company to the Company or any other wholly owned direct or indirect Subsidiary of the Company; 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) 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 of, in lieu of or in substitution therefor, (C) 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 have monetary obligations prohibit dividends and distributions paid or made on a pro rata basis by direct or indirect Subsidiaries of the Company in excess the ordinary course consistent with past practice;
(vii) 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 $25,000 3,000,000 of letters of credit and $1,000,000 of all other Indebtedness. “Indebtedness” of any Person means (except as may 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 necessary 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 comply with its obligations hereunderthe extent (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 (H) reimbursement obligations under (i) letters of credit, bank guarantees and other similar contractual obligations entered into by or on behalf of such Person or (ii) waivesurety, releasecustoms, grantreclamation or performance bonds other than, assign, modify or transfer any in the case of its material rights or claims this clause (whether such rights or claims arise under a Contract or otherwise);
(jii) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures those entered into in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoingpractice.
Appears in 2 contracts
Sources: Merger Agreement (XPO Logistics, Inc.), Merger Agreement (Con-Way Inc.)
Interim Operations. Except (a) The Company covenants and agrees that, from the execution of this Agreement until the Effective Time (unless Parent 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 or Agreement, (y) as set forth in Section 5.01 7.1(a) of the Company Disclosure Schedule Letter or (z) as consented required by applicable Laws (including any Law issued in response to in writing by Parentthe COVID-19 (or SARS-CoV-2) virus), the Company covenants and agrees that during the period from the date of this Agreement shall use its reasonable best efforts to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the conduct its business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and consistent with past practice in all material respects and, to the Company and its Subsidiaries extent consistent therewith, it shall use their commercially its reasonable best efforts to preserve its business organizations substantially intact their current and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, production companies, distributors, licensees, licensors, creditors, lessors, employees and business organizations, associates and others having material business dealings with it and keep available the services of their current officers and its present employees and preserve their relationships with their material customersagents. Without limiting, suppliersand in furtherance of, licensorsthe foregoing, licenseesfrom the execution of this Agreement until the Effective Time, advertisersexcept (1) as otherwise expressly required, distributors and other material third parties having business dealings with them and 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 preserve the goodwill COVID-19 (or SARS-CoV-2) virus), the Company will not (unless Parent shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)):
(i) adopt or propose any change in its certificate of their respective businessesincorporation or bylaws;
(bii) merge or consolidate the Company shall notwith any other Person or restructure, and shall not permit 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 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 Company, taken as a whole, on any assets of the Company;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person, other than advances to Company Employees in respect of travel or other related business expenses, in each case in the ordinary course of business consistent with past practice;
(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 Subsidiaries tocapital stock;
(viii) reclassify, (i) authorize for issuancesplit, issuecombine, deliversubdivide or redeem, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise)otherwise acquire or offer to redeem, pledge repurchase or otherwise encumber acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock or (other than the capital stock withholding of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options shares to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares satisfy withholding Tax obligations upon the exercise exercise, vesting or settlement of Options Company Equity Awards outstanding as of the date hereof; hereof (iior issued after the date hereof in accordance with the terms of this Agreement) repurchasein accordance with their terms and, redeem as applicable, the Company Stock Plans as in effect on the date hereof or otherwise as the same may be amended in accordance with the terms of this Agreement);
(ix) incur any indebtedness for borrowed money with an aggregate principal amount in excess of $5,000,000 or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any shares debt security of the Company;
(x) make or authorize any capital stock expenditure in excess of $5,000,000 individually or in the aggregate during any twelve (12)-month period beginning on or after the date hereof;
(xi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement other equity interests than in the ordinary course of the Company business consistent with past practice;
(xii) amend, modify, cancel or terminate any of its Subsidiaries (includingMaterial Contract, without limitation, securities exchangeable forlease or sublease, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amendcancel, modify or waive any term 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 outstanding security 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 of its Subsidiarieschanges with respect to accounting policies or procedures, except as required by GAAP or by applicable Law;
(xvi) other than with respect to Transaction Litigation, which is governed by Section 7.14(c), settle or compromise any Proceeding which would reasonably be expected to (A) as required 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 set forth in Section 5.01(b) of the Company Disclosure Schedulea whole, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating involve any criminal liability or any admission of material wrongdoing or material wrongful conduct by the Options and the Stock PlansCompany;
(cxvii) (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 shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion a jurisdiction where the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockCompany currently files such Tax Returns;
(dxviii) other than quarterly dividends not 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 $0.075 per Common Share declared and paid consistent with past practices5,000,000, in the Company shall notaggregate, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on except (whether in cash, stock A) for sales or other property)dispositions of obsolete assets, (B) for transfers, sales or make any other distributions in respect of, any dispositions of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases inventory in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements(C) pursuant to Contracts in effect prior to the date hereof, bonus plans and other agreements and arrangements listed (D) for non-exclusive licenses in the ordinary course of business or described in Section 5.01(e(E) for abandonments, non-renewals or non-extensions of Intellectual Property Rights that are not material to the conduct of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, Company’s business as then conducted;
(ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iiixix) except as set forth in Section 5.01(e) required pursuant to the terms of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on effect as of the date hereof, or as adopted or amended following the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside in the ordinary course of business consistent with past practice under (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 its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);foregoing.
(jb) Parent covenants and agrees that, from the execution of this Agreement until the Effective Time (unless the Company shall nototherwise 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 not permit any cause each of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant use its and their reasonable best efforts to commitments prior to the date hereof or other planned capital expenditures conduct its business in the ordinary course of business consistent with past practices disclosed 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 5.01(j7.1(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 Disclosure Schedule by categoryshall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed)):
(i) adopt or make propose any commitments 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 respect to any other Person, other than 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 expenditures stock of Parent, securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other planned rights of any kind to acquire any shares of such capital expenditures stock or such convertible or exchangeable securities, in each case other than (A) the issuance of equity awards under the Parent Stock Plan in the ordinary course of business consistent with past practices practice and (B) the issuance of shares in excess respect of $500,000 the settlement of equity awards outstanding as of the date hereof (or issued after the date hereof) in accordance with their terms and, as applicable, the aggregateParent Stock Plan;
(kv) 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) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, repurchase 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 (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 understanding to do any of the foregoing.
(c) Subject to Section 7.2(f), from the execution of this Agreement until the Effective Time, the Company shallshall not terminate, amend, modify or waive any provision of any confidentiality agreement, Standstill Agreement or similar agreement to which 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 agreement, 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.
(d) 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 shall cause its Subsidiaries toexercise, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ past practicesrespective operations, if any.
(iie) use reasonable best efforts not From the date of this Agreement until the earlier to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, occur of the furniture, fixtures, equipment Effective Time and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration termination of real property leases this Agreement in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as terms set forth in Section 5.01(l) of Article IX, neither the Company Disclosure Schedulenor Parent shall, and neither the Company nor Parent shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, 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, or is would reasonably likely be expected to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) , prevent or materially delay or impair the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any consummation of the foregoingMergers and the other transactions contemplated by this Agreement.
Appears in 2 contracts
Sources: Merger Agreement (BridgeBio Pharma, Inc.), Merger Agreement (BridgeBio Pharma, Inc.)
Interim Operations. Except (a) From and after the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement, except (the following exceptions (i)–(v), the “Interim Covenant Exceptions”) (i) as otherwise contemplated required or expressly permitted by this Agreement 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 set forth in Section 5.01 of the Company Disclosure Schedule or as may be consented to in writing by ParentParent (which consent shall not be unreasonably withheld, delayed or 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 (5) Business Days after receiving a written request (email sufficient) from the Company for such consent or (v) as otherwise set forth in Section 7.1 of the Company Disclosure Schedule, the Company covenants shall use reasonable best efforts to, and agrees that during the period from the date shall cause each of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conductedto use reasonable best efforts to, and the books and records of the Company and conduct its Subsidiaries shall be maintained, only business in all material respects in the ordinary course of business and, to the extent consistent therewith, shall use, and the Company cause each of its Subsidiaries to use, commercially reasonable efforts to (i) preserve its and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current Subsidiaries’ assets and business organizationsorganizations intact, keep available the services (ii) maintain in effect all of their current officers its material foreign, federal, state and employees local licenses, permits, consents, franchises, approvals and preserve their authorizations and (iii) maintain satisfactory relationships with their its material customers, lenders, suppliers, licensors, licensees, advertisers, distributors and other others having material third parties having business dealings relationships with them and it; provided, however, that no action or failure to preserve take action with respect to matters specifically addressed by the goodwill provisions of their respective businesses;Section 7.1(b) shall constitute a breach under this sentence unless such action or failure to take action would constitute a breach of such provision of Section 7.1(b).
(b) From the Company shall notdate of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article IX, and shall not permit other than pursuant to any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests)Interim Covenant Exception, except for issuances of Common Shares upon 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 exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests extent relating to actions of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests only and not of the Company or any of its Company’s Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practicesParent’s sole discretion, the Company shall not, and shall not permit any of cause its Subsidiaries not to, declare, set aside or pay :
(i) adopt (A) any dividends on (whether change in cash, stock or other property), or make any other distributions in respect of, any of its capital stock the Company’s Organizational Documents (except for dividends paid by direct immaterial or indirect wholly owned Subsidiaries ministerial amendments) or (B) material changes to the Company or to other wholly owned Subsidiaries Organizational Documents of any Subsidiary of the Company consistent with past practicesthat, in the case of this clause (B), would be adverse to Parent;
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new merge or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of consolidate the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply Subsidiaries with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business Person or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization 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 transaction specifically contemplated by 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;
(iv) except as set forth in Section 5.01(i7.1(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 (C) pro rata dividends or distributions by a Subsidiary other than a Wholly Owned Subsidiary of the Company in the ordinary course of business;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or 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 (A) to satisfy applicable Tax withholding and/or exercise prices upon vesting, settlement or exercise of any Company Equity Award outstanding on the date hereof or granted after the date hereof without violation of this Agreement, or (B) any such transactions solely involving Wholly Owned Subsidiaries of 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 this Section 7.1(b), except for incurrences of Indebtedness and guarantees under the Company Revolving 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 or any Company Subsidiary 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 any manner that would increase the 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 Disclosure Schedule, (B) to the Company shall not, extent reasonably necessary to protect human health and shall safety and (C) any unbudgeted capital expenditures not permit to exceed $5 million individually or $10 million in the aggregate per annum without taking into account any of its Subsidiaries to, amounts permitted by the foregoing clause (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwiseB);
(jxi) the enter into any Contract that would have been a Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments Material Contract had it been entered into prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures this Agreement, other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregatebusiness;
(kxii) other than with 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 amend, materially modify, or waive any material rights under, any Company Material Contract, other than in the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks ordinary course of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithbusiness;
(lxiii) except as set forth in Section 5.01(l) of the Company Disclosure Schedulecancel, the Company shall not, and shall not permit modify or waive any of its Subsidiaries to, (i) materially amend any currently existing labor debts or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used claims held by the Company or any of its Subsidiaries as having in each case a value in excess of $1 million individually or $5 million in the date hereofaggregate, other than debts or claims held against customers in connection with the sale or rental of Company Products in the ordinary course of business or solely between or among the Company and/or its Wholly Owned Subsidiaries;
(xiv) for the avoidance of doubt, except as may be required as a result 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 lapse of a change such material Insurance Policy, 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 applicable Law full force and effect, in each case, providing coverage substantially similar to the coverage under the terminated, cancelled or in GAAPlapsed material Insurance Policies;
(nxv) other than with respect to Transaction Litigation or any Tax claim, audit, assessment or dispute, which shall be governed exclusively by Section 7.19 and Section 7.1(b)(xvii), respectively, settle or compromise any Proceeding for an amount in excess of $5 million individually or $25 million in the Company shall not, and shall not permit aggregate during any of its Subsidiaries to, takecalendar year, or agree which would reasonably be expected to (A) prevent, materially delay or commit to take, any action that would, or is reasonably likely to, make any representation or warranty materially impair the consummation of the Company contained in transactions contemplated by this Agreement inaccurate in or (B) involve any material respect at, or as of any time prior to, the Effective Time criminal liability or result in any of non-monetary obligation that is material to the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfiedCompany and its Subsidiaries (taken as a whole);
(oxvi) 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 Company shall notordinary course of business), and shall not permit change or revoke any of its Subsidiaries tomaterial Tax election, make or (B) change any annual Tax accounting period, (C) change any material tax election or change an annual Tax accounting period method, (D) file any amended Tax Return that is material, (E) enter into any closing agreement with respect to Taxes, file (F) settle any amended Tax Return, enter into any closing agreement, settle or compromise any material Tax claim, audit, assessment or liability relating to dispute for an amount that materially exceeds the Company or any of its Subsidiariesamount 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 5.01(o7.1(b)(xix) of the Company Disclosure ScheduleSchedule and (2) the payment of cash incentive compensation for completed periods based on actual performance in the ordinary course of business, consent to (B) become a party to, establish, adopt, amend in any extension material respect, commence participation in or waiver of the limitation period applicable to terminate any Tax claim or assessment relating to the material Company or Benefit Plan, (C) grant any of its Subsidiariesnew awards, or take amend or modify in any other similar actionmaterial respect the terms of any outstanding awards, or omit to under any Company Benefit Plan, (D) take any action relating to accelerate the filing 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 Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit employee who is a member of the Company or any of its SubsidiariesCompany’s executive leadership team other than for cause;
(pxx) other than in the Company shall (i) use its commercially reasonable efforts ordinary course of business, become a party to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts toestablish, prevent the termination of any Contract with any Significant Customeradopt, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify commence participation in or supplement, terminate any Lease collective bargaining agreement or other Material Contract under which the costs agreement with a labor union, labor organization, works council or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregatesimilar organization; andor
(qxxi) the Company shall notagree, and shall not permit any of its Subsidiaries to, 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 its Subsidiaries shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective operations.
(d) Notwithstanding anything to the contrary in this Agreement, each of Parent and the Company shall not, and shall cause its respective controlled Affiliates not to directly or indirectly (whether 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. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the (a) The Company Disclosure Schedule or as consented to in writing by Parentagrees that, the Company covenants and agrees that during the period from the date of this Agreement to through the Effective Time (earlier of the Closing or until the date of termination of this Agreement Agreement, except (1) to the extent Parent shall otherwise give its prior consent in accordance with Article 7 hereof):
writing (asuch consent not to be unreasonably withheld, conditioned or delayed), (2) the business and operations as set forth in Section 4.1(a) of the Company and its Subsidiaries shall be conductedDisclosure 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 the books and records of shall cause the Company and Subsidiaries to, conduct its Subsidiaries shall be maintained, only business in the ordinary course of business in all material respects and the Company in a manner consistent with past practice, and its Subsidiaries shall use their commercially reasonable best efforts to maintain and preserve intact their current its business organizationsorganization, keep available the services of their current officers and employees and preserve their key employees, maintain satisfactory relationships with their material Governmental Entities, customers, suppliers, licensors, licensees, advertisers, distributors and other commercial counterparties and maintain its material third parties having business dealings with them 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 the date of termination of this Agreement, except (1) to preserve the goodwill extent Parent shall otherwise give its prior consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), (2) as set forth in Section 4.1(a) of their respective businesses;
the Company Disclosure Letter, (b3) as required by applicable Legal Requirements or (4) as expressly required by this Agreement, the Company shall not, not (and shall not permit any of its Subsidiaries Company Subsidiary to, ):
(i) authorize amend the Company’s Organizational Documents or the Organizational Documents of any Company Subsidiary (except for issuanceimmaterial 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 any shares of the 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 (C), in one or 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 prevent the consummation of the Closing;
(v) issue, deliversell, sell grant or agree otherwise permit to become outstanding any additional shares of, or commit to issuesecurities convertible or exchangeable for, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, warrants or rights to purchase or otherwise)acquire, pledge or otherwise encumber any shares of its capital stock or the capital stock of any Company Subsidiary, other than: (A) shares of its Subsidiariescapital stock of a wholly owned Subsidiary of the Company issued to either the Company or another wholly owned Subsidiary of the Company; (B) shares of Company Common Stock issuable upon exercise of Company Options or 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 other securities Company IP or any securities convertible material assets of the Company, other than: (A) sales of inventory or exercisable into, of obsolete assets in the ordinary course of business; (B) pursuant to written Contracts or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding commitments existing as of the date hereofof this Agreement and set forth on Section 4.1(a)(vi) of the Company Disclosure Letter; (iiC) non-exclusive licenses of Company IP granted in the ordinary course of business; or (D) disposals of any immaterial Company Registered IP resulting from a cancellation, abandonment or failure to renew any immaterial Company Registered IP in the ordinary course of business;
(vii) directly or indirectly repurchase, redeem or otherwise acquire any shares of the Company’s capital stock stock, or any other equity interests 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 capital stock, except: (A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the exercise 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 settlement of Company Options and Company RSU Awards outstanding on the date of this Agreement, as applicable, in accordance with past practice and the terms of the applicable award;
(viii) (A) incur 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 to any other person; (B) incur any Lien on any of its Subsidiaries (includingmaterial property or assets, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the except for Company or any of its Subsidiaries)Permitted Encumbrances; or (iiiC) amend, modify enter into any transactions that amend or waive any term otherwise alter available capacity under Section 4.7 of any outstanding security of either the Company Unsecured Indenture or any of its Subsidiaries, except the Secured Indenture;
(ix) (A) as required by this Agreementadopt, terminate or materially amend any Company Plan or any collective bargaining or other labor agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Scheduleincrease, in connection with accelerating or accelerate the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect payment of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer independent contractor or employeeemployee of the Company or any Company Subsidiary, except other than, (1) in the event the Closing has not occurred by March 1, 2024, increases in base salary to any such individuals who are not directors or officers of the Company or any Company Subsidiary in the ordinary course of business consistent with past practice that do not exceed 5% in the aggregate and (2) increases in connection with promotions permitted under clause (D) in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements(C) grant any rights to severance, bonus plans and other agreements and arrangements listed retention, change in control or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into termination pay to any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, independent contractor or employee or affiliate 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 its Subsidiariesbase salary in excess of $300,000 or a title of Senior Vice President or higher, or (iiiE) except as set forth in Section 5.01(e) terminate the employment of any employee of the Company Disclosure Scheduleor 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), as may except for: (1) amendments to Company Plans determined by the Company in good faith to be required to comply with applicable Law Legal Requirements; and (2) increases required pursuant to any Company Plan as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence effect on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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 hereofthis Agreement;
(fx) other than in the ordinary course of business consistent with past practice (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 the expiration of the existing term of any Material Contract and (2) extensions at the option of the Company shall notor any Company Subsidiary under the terms thereof exercised in the ordinary course of business consistent with past practice), and shall not permit any of its Subsidiaries to, or (xB) enter into any new line Contract that, if in effect on the date of businessthis 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 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 acquire other proceeding relating to any material Taxes, (E) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or agree any similar state, local or non-U.S. Legal Requirement), (F) request any Tax ruling from any Governmental Entity, (G) surrender any right to acquireclaim 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”), includingexcept that the Company or any Subsidiary of the Company may make any Company Non-Budgeted Capital Expenditure that, without limitationwhen added to all other Company Non-Budgeted Capital Expenditures made by the Company and the Company Subsidiaries since the date of this Agreement, by merging or consolidating withwould not exceed $5,000,000, individually, or purchasing $10,000,000, in the assets 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 sale or voting of its capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionsinterests;
(gxvi) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization 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 of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)Company Subsidiary;
(ixviii) except as set forth 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 Section 5.01(ia manner that adversely impacts the Company’s ability to conduct its business in any material respect;
(xx) of (A) fail to pay any issuance, renewal, maintenance and other payments that become due with respect to the Company Disclosure ScheduleRegistered IP or otherwise abandon, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter intocancel, or materially amend, modify permit to lapse any material Company IP or supplement any Contract outside the ordinary course of business consistent with past practice under agreements pursuant to which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for Company Subsidiary licenses or obtains the Company right to comply with its obligations hereunder)use any Intellectual Property, or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to any abandonment of any Company Registered IP at the date hereof end of the applicable statutory term or other planned capital expenditures otherwise in the ordinary course of business consistent with past practices disclosed practice, or (B) disclose to any third party any Trade Secret included in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures IP, other than pursuant to a non-disclosure agreement restricting the disclosure and use of such Trade Secret, or in connection with any regulatory filing or any publication of any patent application;
(xxi) except in the ordinary course of business consistent 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 past practices in excess of $500,000 in the aggregaterespect to any Intellectual Property;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (iixxii) enter into any labor material new line of business or collective bargaining agreement, memorandum or understanding, grievance settlement or line of business of any other agreement or commitment to or relating to any labor union which is different in any material respect kind competitive with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by LawParent and the Parent Subsidiaries;
(mxxiii) the Company shall not, and shall not permit take any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, takeaction, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, knowingly fail to take any action, which action necessary or failure to act could be reasonably expected to prevent any such representation or warranty the Merger from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; or
(oxxiv) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Returnauthorize, enter into any closing agreement, settle Contract or compromise make any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit 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 writing (such consent not to be unreasonably withheld, conditioned or delayed), (2) as set forth in Section 4.1(b) of the Parent 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 the LLC Conversion or any other action permitted by Section 4.12 or Section 4.21), Parent shall, and shall cause the Parent Subsidiaries to, 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 the date of termination of this Agreement, except (1) to the extent the Company shall otherwise give its prior consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), (2) as set forth in Section 4.1(b) of the Parent Disclosure Letter, (3) as required by applicable Legal Requirements or (4) as expressly required by this Agreement, Parent shall not (and 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 the Closing or would be adverse in any material respect to the holders of Company Class A Common Stock relative to holders of Parent Class A Common Stock;
(ii) split, combine, subdivide, amend the terms of or reclassify any shares of the Parent’s capital stock or the capital stock of any Parent Subsidiary (other than any wholly owned Parent Subsidiary) (or any securities convertible into or exchangeable for, or options, warrants or rights to acquire, 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 any shares of Parent’s capital stock or the capital stock of any Parent Subsidiary, except for dividends or other distributions paid by any wholly owned Parent Subsidiary to Parent or another wholly owned Parent Subsidiary;
(iv) directly or indirectly repurchase, redeem or otherwise acquire any shares of Parent Common Stock (excluding, for clarity, securities convertible
Appears in 2 contracts
Sources: Merger Agreement (EchoStar CORP), Merger Agreement (DISH Network CORP)
Interim Operations. Except as may be (i) 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 in writing by Buyer in advance (which consent will not be unreasonably withheld, conditioned or delayed), the Sellers shall cause the Companies and the Company Subsidiaries to, and Westway Canada shall (with respect to the Canadian Feed Business), carry on their respective business in the ordinary course consistent with past practice, and, to the extent consistent therewith, the Sellers shall cause the Companies and the Company Subsidiaries to and Westway Canada shall (with respect to the Canadian Feed Business) use reasonable best efforts to preserve substantially intact their respective business organization, to keep available the services of their respective current officers and employees, to preserve their respective present relationships with customers, suppliers, distributors, licensors, licensees and other Persons having business relationships with them. The Parties agree that each of ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇ shall be authorized to provide consent on behalf of Buyer for purposes of this Section 5.1. Without limiting the generality of the foregoing, between the date of this Agreement and the Closing, except as otherwise contemplated by expressly provided for in this Agreement or as set forth in Section 5.01 Schedule 5.1 or as required by applicable Law, the Sellers shall not permit any of the Company Disclosure Schedule Companies or as consented to in writing by Parent, the Company covenants Subsidiaries to, and agrees that during the period from the date of this Agreement Westway Canada shall not (with respect to the Effective Time Canadian Feed Business), without the prior written consent of Buyer (which consent will not be unreasonably withheld conditioned or until termination of this Agreement in accordance with Article 7 hereofdelayed):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts amend or propose to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of amend their respective businessesgoverning documents;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuancesplit, issuesubdivide, deliver, sell combine or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber reclassify any shares of its capital stock or the capital stock securities of any of its Subsidiariesthe Companies, any other securities the Company Subsidiaries or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; Westway Canada (ii) except as pursuant to this Agreement, repurchase, redeem or otherwise acquire acquire, or offer to repurchase, redeem or otherwise acquire, any shares securities of any of the capital stock or other equity interests of Companies, the Company Subsidiaries or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); Westway Canada or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreementfor transfers which would cause either a net cash inflow or outflow between the Feed Intercompany Cash Sweep Account and the Parent Swingline Account, (B) as set forth in Section 5.01(b) of for the Company Disclosure ScheduleUK Reorganization, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or and (C) in connection with terminating the Options and direct or indirect repatriation (in any form or method approved by the Stock Plans;
(crelevant entity) the Company shall not (i) sell, transfer of cash or pledgecash equivalents to Netherlands Holdings or its direct or indirect owners, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (iiD) amend or as otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries topractice, declare, set aside or pay any dividends on dividend or distribution (whether in cash, stock stock, property or other property), or make any other distributions otherwise) in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having Contract with respect to the economic effect of any of the foregoing; voting or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose registration of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) shares of the Company Disclosure ScheduleCompanies’, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable Subsidiaries’ or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the CompanyWestway Canada’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries capital stock (other than any transaction specifically contemplated by this Agreementdividends from its direct or indirect wholly-owned Subsidiary);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Purchase Agreement, Purchase Agreement (Westway Group, Inc.)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from From the date of this Agreement to until the earlier of the Effective Time (or until and termination of this Agreement in accordance with Article 7 hereof):
its terms, the Company covenants and agrees as to itself and each of its Subsidiaries that it will use its commercially reasonable efforts, from the date of this Agreement until the Effective Time, unless Parent shall otherwise approve in writing, 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 use their respective commercially reasonable efforts to (a) preserve their business organizations, assets and lines of business intact, (b) maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations that are material to the business Company and operations of 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 Company and its Subsidiaries shall be conducted, and the books and records of the Company and necessary to conduct its Subsidiaries shall be maintained, only business in the ordinary course of business consistent with past practice (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 (d) maintain in all material respects its and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizationsexisting relations and goodwill with Governmental Entities, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors employees and other material third parties having business dealings with them and to preserve agents. Without limiting the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as generality of the foregoing and in furtherance thereof, from the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of this Agreement until the earlier of the capital stock or other equity interests Effective Time and the termination of the Company or any of this Agreement in accordance with its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiariesterms, except (A) as otherwise expressly required by this Agreement, (B) as Parent may consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), (C) as required by applicable Laws or definitive interpretations thereof or by any Governmental Entity, or (D) as set forth in Section 5.01(b) 4.1 of the Company Disclosure ScheduleLetter, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall will not, and will not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of permit any of its Subsidiaries, to:
(i) adopt any amendments to its charter or bylaws or, in the case of any Subsidiary that is not a corporation, similar applicable organizational documents;
(ii) amend (A) adopt a plan of complete or otherwise change its certificate of incorporation partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or other reorganization (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other propertythis Agreement), 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(eB) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or by purchasing an equity interest in or portion of the assets or capital stock or of (other equity interests ofthan as set forth in Section 4.1(iii)), or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof thereof, (C) take or omit to take any action that would cause any rights under Material Intellectual Property, including with respect to any registrations or applications for registration, to lapse, be abandoned or cancelled, or fall into the public domain, other than actions or omissions in the ordinary course of business consistent with past practice and not otherwise in violation of this Section 4.1, or (D) enter into a joint venture or partnership or similar third-party business enterprise;
(iii) acquire any assets or capital stock from any other Person, other than acquisitions or purchases made of assets in the ordinary course of business consistent with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionspast practice;
(giv) the Company shall notissue, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sellpledge, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, grant, transfer, encumber, or agree to sellauthorize the issuance, lease sale, pledge, disposition, grant, transfer or subject to any Lien or otherwise dispose encumbrance of, any shares of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization capital stock of the Company or any of its Subsidiaries (other than (A) the issuance of Shares upon the exercise of Company Options and the settlement of RSU Awards and PSU Awards (and dividend equivalents thereon, if applicable) outstanding on the date of this Agreement or (B) the issuance of shares of capital stock by a wholly owned Subsidiary of the Company to the Company or another wholly owned 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 transaction specifically contemplated by 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 acquire any shares of such capital stock or such convertible, exchangeable or exercisable securities;
(iv) except as set forth other than trade credit or otherwise in Section 5.01(i) of an amount not to exceed $5,000,000 in the Company Disclosure Scheduleaggregate, the Company shall notin each case, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside in the ordinary course of business consistent business, make any loans, advances or capital contributions to or investments in any Person;
(vi) (A) declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or other property, with past practice under which respect to its capital stock, except for dividends by any wholly owned direct or indirect Subsidiary of the Company to the Company or any other wholly owned direct or indirect Subsidiary of the Company, (B) 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 of, in lieu of or in substitution therefor, (C) 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, RSU Awards or PSU Awards outstanding on the date of this Agreement, (2) the payment of the exercise price of Company Options outstanding on the date of this Agreement with Shares (including in connection with “net exercises”) and (3) forfeitures of Company Options, RSU Awards or PSU Awards 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 have monetary obligations 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;
(vii) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for any Indebtedness or otherwise modify the terms of any Indebtedness, other than Indebtedness incurred under existing revolving credit facilities of the Company for working capital purposes in the ordinary course of business in an amount not to exceed $150,000,000 in the aggregate (provided that Parent’s prior written consent shall be required in respect of any incremental incurrence of Indebtedness thereunder in excess of $25,000 5,000,000). “Indebtedness” of any Person means (except as may 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) net cash payment obligations of such Person under swaps, options, derivatives and other hedging agreements or arrangements that will be necessary for payable upon termination thereof (assuming they were terminated on the Company to comply with its obligations hereunderdate of determination), and (G) reimbursement obligations under (i) letters of credit, bank guarantees and other similar contractual obligations entered into by or on behalf of such Person or (ii) waivesurety, releasecustoms, grant, assign, modify reclamation or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (performance bonds other than pursuant to commitments prior to the date hereof or other planned capital expenditures those entered into in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregatepractice;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (QXO, Inc.), Merger Agreement (QXO, Inc.)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, conditioned or until termination of delayed), and except as otherwise expressly required by this Agreement in accordance with Article 7 hereof):
(aAgreement) and except as required by applicable Laws, the Company shall, and shall cause its Subsidiaries to, conduct the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only 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 preserve their business organizations intact, maintain their Licenses and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date hereof until the Effective Time, except (A) as otherwise expressly required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (C) as required by applicable Laws or (D) as set forth in Section 7.1(a) of the Company Disclosure Letter, the Company shall not do any of the following and shall cause each of its Subsidiaries not 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 past practice from any other Person, other than (A) acquisitions pursuant to Contracts in effect as of the date hereof and set forth in Section 7.1(a)(iii) of the 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 shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available would not exceed $10,000,000 individually or in the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesaggregate;
(biv) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell sell, pledge, dispose of, grant, transfer, or agree subject to any Lien or commit authorize the issuance, delivery, sale, pledge, disposition, grant, transfer or the subjection to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any Lien any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable forother 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 or exchangeable into or exercisable for any shares of such capital stock, or any options, stock appreciation rights, warrants, callsrestricted stock units, commitments restricted stock, “phantom” stock, “phantom” stock rights, stock-based performance units or other rights of any kind to acquire, acquire any shares of such capital stock or such convertible or exchangeable securities, except for the 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 equity interests 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 any made in the ordinary course of its Subsidiaries); business consistent with past practice or (iiiB) amend, modify or waive any term advances in immaterial amounts made in the ordinary course of any outstanding security business consistent with past practice to employees of the Company and its Subsidiaries for reimbursement of routine travel or any immaterial business expenses and in accordance with the terms of its Subsidiaries, except the applicable policy in effect on the date of this Agreement;
(vi) (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside aside, make or pay any dividends on (whether dividend or other distribution, payable in cash, stock stock, property or other property)otherwise, or make any other distributions in with respect of, to any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiaries Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiaries 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 consistent with past practices);
(e) neither to the Company nor any or another wholly owned Subsidiary of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases Company in the ordinary course of business consistent with past practice, increases (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 bonuses expressly 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 under by the terms of any plans, arrangements or Contracts existing employment agreements, bonus plans 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 other agreements and arrangements listed any director or described in Section 5.01(e) employee of the Company Disclosure Schedule or any of its Subsidiaries (to the extent complete and except in connection with accelerating accurate copies of such plans, arrangements or Contracts have been delivered to Parent prior to the vesting schedules date of the Options and terminating the Options and the Stock Plansthis Agreement), or (iiC) enter into any new agreement with respect to the voting of its capital stock;
(vii) incur any indebtedness for borrowed money or materially amend assume, guarantee, endorse or otherwise become responsible for any existing Contractindebtedness of another Person, transaction, commitment or arrangement with issue or sell any current debt securities or former director, officer, employee warrants or affiliate other rights to acquire any debt security of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement Contract to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by solely between or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its and/or one or more direct or indirect wholly owned Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company in immaterial amounts or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of practice; provided that the Company Disclosure Schedule by category) and its Subsidiaries may incur indebtedness for borrowed money, or make any commitments with respect to capital expenditures issue or other planned capital expenditures other than sell debt securities, in each case in the ordinary course of business consistent with past practices 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 capital budgets set forth in Section 7.1(a)(viii) of the Company Disclosure Letter and consistent therewith, make or authorize any payment of, or accrual or commitment for, any capital expenditure in excess of $500,000 10,000,000 in the aggregate;
(kix) 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 shallDisclosure 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 shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks or would impose restrictions on the business operations of such types and in such amounts as are consistent with the Company’s Parent and its Subsidiaries’ past practices, 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), (iiiv) use reasonable best efforts not (only with respect to permit any insurance policy naming it Material Contracts that are letters of credit or surety bonds in the ordinary course of business consistent with past practice, and as beneficiary or loss payable payee expressly permitted pursuant to be canceled or terminatedSection 7.1(a)(vii)), (iiivii), subclause (C) maintain all Leased Real Property of clause (includingviii) (with respect to wholly owned Subsidiaries only), without limitationclause (xii) (with respect to such Material Contracts for which the Company or its Subsidiaries are a beneficiary, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration extent otherwise compliant with Section 7.2) of real property leases 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 their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(lxiii) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
, (mA) the Company shall notmake, and shall not permit change, or rescind any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereofmaterial Tax election, except as may be required as a result of a change in applicable Law or in GAAP;
for any Protective 2014 Distribution Election; (nB) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in file any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to Return of the Company or any 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 right to claim for a refund of material Taxes, except as set forth in Section 5.01(o; (F) of the Company Disclosure Schedule, 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 limitation 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);
(xiv) take any action that would reasonably be expected (A) to cause any of the Applicable Distributions not to qualify as transactions under Section 368(a)(1)(D) of the Code or Section 355 of the Code or (B) to cause any stock or securities distributed in the Applicable Distributions not to be treated as “qualified property” for purposes of Section 361(c)(2) of the Code;
(xv) transfer, sell, lease, assign, license, mortgage, subject to Liens, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any or any part of its assets (including material Intellectual Property), licenses, operations, rights, product lines, businesses or interests therein, in each case except (x) in the ordinary course of business consistent with past practice and (y) for transactions involving a de minimis amount of assets in the aggregate;
(xvi) except to the extent required pursuant to the terms of any Benefit Plan or Material Contract (or any “rabbi trusts” relating to any such Benefit Plans) in effect as of the date of this Agreement, or as otherwise required by applicable Law, (A) grant or provide any severance, termination, change in control or retention payments or benefits to any present or former director, officer, or employee of the Company or any of its Subsidiaries, (B) increase in any manner the compensation, bonus or take pension, welfare, severance, termination pay, change in control, retention or other benefits to any other similar actioncurrent or former director, officer, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit employee of the Company or any of its Subsidiaries;
(p) , except for any increase to employees below Band A or Band B that are not material individually or in the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customeraggregate, (iiC) notpay any bonus to any current or former director, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent toofficer, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations employee 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 resulting from (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 Benefit Plan or award made thereunder, in each case to the extent such amendment, modification or supplement would exceed $25,000 per annum actions are material individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
, (qH) take any action to accelerate the Company shall notpayment, and shall or, in the case of severance or similar benefits or deferred compensation not permit any of its Subsidiaries to, agree or commit to do any provided under a plan that is qualified under Section 401(a) of the foregoing.Code, to fund or in any other way secure the payment of such severance or similar benefits or deferred compensation under any Benefit Plan, (I) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or other agreement with a labor union, works council or similar organization, (J) change any
Appears in 2 contracts
Sources: Merger Agreement (Harris Corp /De/), Merger Agreement (Exelis Inc.)
Interim Operations. Except (a) Crown and King each covenant and agree as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Crown or King, as applicable, shall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 7.1(a) of the Company such Party’s Disclosure Schedule or as consented to in writing by ParentLetter, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(ai) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in all material respects in the ordinary course of business Ordinary Course and (ii) to the Company extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve their business organizations intact their current business organizationsand maintain existing relations and goodwill with Governmental Entities, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertiserscreditors, distributors lessors, Service Providers and other material third parties having business dealings with them associates and to preserve keep available the goodwill services of their respective businesses;its and its Subsidiaries’ present Service Providers and agents, except as otherwise expressly contemplated by this Agreement.
(b) Without limiting the Company generality of and in furtherance of Section 7.1(a), from the date of this Agreement until the Effective Time, except as otherwise (w) expressly contemplated by this Agreement, (x) required by applicable Law, (y) as approved in writing by the other Party (which approval shall notnot be unreasonably withheld, conditioned or delayed) or (z) set forth in Section 7.1(b) of such Party’s Disclosure Letter, each Party, on its own account, shall not and shall cause its Subsidiaries not permit 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 towith any other Person, or (iB) 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 for the issuance, issuesale, deliverpledge, sell disposition, grant, transfer, lease, license, guarantee or agree or commit to issueEncumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or the capital stock of any of its Subsidiaries (other than the issuance of shares (A) by its direct or indirect wholly owned Subsidiary to it or another of its direct or indirect wholly owned Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances B) in respect of Common Shares upon the exercise of Options equity-based awards outstanding as of the date hereof; of this Agreement, or (iiC) repurchasegranted in accordance with Section 7.1(b)(xvi) in each of clauses (B) and (C), redeem in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement), or otherwise acquire securities convertible or exchangeable into or exercisable for any shares of the such capital stock stock, or any options, warrants or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance (other equity interests 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 Company or Ordinary Course on any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company assets or any of its Subsidiaries, except for Encumbrances (A) as that are required by this Agreementor automatically effected by Contracts in place as of the day hereof, (B) as set forth in Section 5.01(b) that do not materially detract from the value of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted assets or (C) in connection with terminating that do not materially impair the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer operations of such Party or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (ii) amend other than to or otherwise change its certificate of incorporation or bylaws or permit from Crown and any of its direct or indirect wholly owned Subsidiaries or to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, from King and shall not permit any of its Subsidiaries to splitdirect or indirect wholly owned Subsidiaries, combine as applicable, or reclassify any shares of its capital stock;
(din accordance with Section 7.1(b)(xvi)) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, 1,000,000 in the Company shall notaggregate;
(vii) except to the extent expressly provided by, and shall not permit any consistent with, Section 7.1(b)(vii) of its Subsidiaries tosuch Party’s Disclosure Letter, declare, set aside aside, make or pay any dividends on (whether dividend or other distribution, payable in cash, stock stock, property or other property)otherwise, or make any other distributions in with respect of, 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 modify in any material respect its dividend policy;
(viii) reclassify, split, combine, subdivide or redeem, purchase (through such Party’s share repurchase program or otherwise) 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, 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), (B) 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 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 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 Ordinary Course in accordance with the terms of such Contract, (B) non-exclusive licenses under Intellectual Property owned by Crown and its Subsidiaries or King or any of its Subsidiaries, as applicable, in each case, granted in the Ordinary Course, or (C) any agreement among such Party and its direct or indirect wholly owned Subsidiaries to the Company or to other among such Party’s direct or indirect wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(hxi) neither other than in the Company nor Ordinary Course or with respect to amounts that are not material to such Party and its Subsidiaries, taken as a whole, cancel, modify or waive any of its Subsidiaries shall adopt debts or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company claims held by it or any of its Subsidiaries (other than or waive any transaction specifically contemplated rights held by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company it or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights debts or claims (whether among such rights Party and its direct or claims arise under a Contract indirect wholly owned Subsidiaries or otherwise)among such Party’s direct or indirect wholly owned Subsidiaries;
(jxii) the Company shall notsettle or compromise, and shall not permit or offer or propose to settle or compromise any of its Subsidiaries tomaterial Proceeding, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shallincluding before a Governmental Entity, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases except in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as parameters set forth in Section 5.01(l7.1(b)(xii) of such Party’s 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 any material restrictions on the Company Disclosure Schedule, the Company shall not, business operations of such Party and shall not permit any of its Subsidiaries to, or Affiliates;
(ixiii) materially amend any currently existing labor material financial accounting policies or collective bargaining agreementprocedures, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, except as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in changes to GAAP;
(nxiv) the Company shall notmake, and shall not permit any of its Subsidiaries to, take, change or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in revoke any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file change any amended material Tax Returnaccounting method or period, enter into any material closing agreementagreement with respect to Taxes, settle 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 liability relating to the Company or any of its Subsidiariesdispute, or surrender any right to claim a refund of a material amount of Taxes, except 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 exist the creation of any Encumbrance upon, any assets (tangible or intangible), product lines or businesses material to it and its Subsidiaries, taken as set forth in Section 5.01(o) a whole, including capital stock of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, except in connection with (A) sales of or take any non-exclusive licenses of the foregoing provided in the Ordinary Course, (B) sales of obsolete assets, (C) sales, leases, licenses or other similar actiondispositions of assets (not including services or sales of inventory in the ordinary course of business) with a fair market value not in excess of $150 million in the aggregate other than pursuant to Material Contracts in effect prior to the date of this Agreement, or omit entered into 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 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 or amend or modify the terms of any such outstanding awards under any Crown Benefit Plan or King Benefit Plan, as applicable, (B) 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 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 relating to the filing of any Tax Return fund or secure the payment of any Taxamounts under any Benefit Plan, if (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 extent that a Party intends to hire an individual to replace a named executive officer of such electionParty, adoptionsuch Party shall first consult in good faith with the other Party prior to, changeand with respect to, amendmentthe hiring of such individual;
(xvii) recognize any labor union, agreementworks council, settlement, surrender, consent or other action labor organization or omission would have employee representative as the effect representative of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company 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, in each case, other than as required by applicable Law;
(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 Crown’s or King’s, as applicable, revolving credit facilities and other lines of 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 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, or (G) Indebtedness incurred among such Party and its direct or indirect wholly owned Subsidiaries or among such Party’s direct or indirect wholly owned Subsidiaries;
(pxix) the Company shall convene any special meeting (ior any adjournment or postponement thereof) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their of each Party’s respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, stockholders other than on terms substantially equivalent tothe Crown Stockholders Meeting or King Stockholders Meeting, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregateas applicable; andor
(qxx) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
(c) Nothing contained in this Agreement s
Appears in 2 contracts
Sources: Merger Agreement (C&J Energy Services, Inc.), Merger Agreement (Keane Group, Inc.)
Interim Operations. Except (a) The Company shall, and shall cause each of its Subsidiaries to, 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 contemplated expressly required by this Agreement or as set forth required by a Governmental Entity or applicable Law and any Material Contract in Section 5.01 of the Company Disclosure Schedule or as consented effect prior to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement Agreement), conduct its business in the Ordinary Course of Business and, to the Effective Time (or until termination extent consistent therewith, shall use and cause each of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company its Subsidiaries to use their respective commercially reasonable efforts to maintain its and its Subsidiaries shall be conductedSubsidiaries’ relations and goodwill with Governmental Entities, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisersdistributors, distributors creditors, lessors, employees, agents and other material third parties having business dealings with them and associates; provided that, during any period of full or partial suspension of operations in response to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities COVID-19 or any securities convertible or exercisable intoCOVID-19 Measures, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (includingmay, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind in response to acquire, capital stock or other equity interests of the Company COVID-19 or any of its Subsidiaries); or (iii) amendCOVID-19 Measures, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) take such actions as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, are reasonably necessary (x) enter into any new line to protect the health and safety of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or ’ employees and other agreement to maintain any financial statement condition of another person or enter into any arrangement individuals having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance business dealings with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries or (other than y) to respond to third-party supply or service disruptions caused by COVID-19 or any transaction specifically contemplated COVID-19 Measures, in each case of clause (x) and (y), subject to reasonable prior consultation with Parent to the extent reasonably practicable. Without limiting the generality of and in furtherance of the foregoing sentence, from the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article IX, except as otherwise expressly required by this Agreement);
, as required by a Governmental Entity or applicable Law, as approved in writing by Parent (isuch approval not to be unreasonably conditioned, withheld or delayed) except as or set forth in the corresponding subsection of Section 5.01(i7.1(a) of the Company Disclosure Schedule, the Company shall not, not and shall 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 toSubsidiaries, including capital stock or other equity interests of any of its Subsidiaries, except in connection with (A) sales of obsolete assets, (iB) nonexclusive licenses granted by the Company or its Subsidiaries with respect to Intellectual Property Rights in the Ordinary Course of Business and (C) sales of inventory or other goods in the 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 (A) proxies or voting agreements solicited by or on behalf of the Company in connection with the Company’s annual meeting of stockholders 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 to 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, as applicable, the Stock Plans in effect on the Capitalization Date);
(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) 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 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 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 (but under no circumstances in an amount that exceeds $0.175 per Share per calendar quarter);
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, 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);
(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 accrual or commitment for, capital expenditures in excess of $250,000 in the aggregate, except to the extent set forth in the Company’s capital budget set forth in Section 7.1(a)(x) of the Company Disclosure Schedule;
(xi) enter intointo 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 the 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 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 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 Ordinary Course of Business and in accordance with the terms of such Contract with no further action by the Company or any of its Subsidiaries, except for any ministerial actions, or non-exclusive licenses, covenants not to s▇▇, releases, waivers or other rights under Intellectual Property Rights owned or purported to be owned by the Company or any of its Subsidiaries, in each case, that are granted in the Ordinary Course of Business;
(xiii) cancel, modify or supplement waive any Contract outside the ordinary course of business consistent with past practice under which debts or similar claims held by the Company or any of its Subsidiaries shall have monetary obligations having in each case a value in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 100 thousand in the aggregate;
(kxiv) 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 Company shalllapse, and shall cause its Subsidiaries toexpiration or termination of any such License is with respect to a License that has become obsolete, (i) continue in force insurance with good and responsible insurance companies adequately covering risks redundant or no longer required by applicable Law or for the operation of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithbusiness);
(lxv) for the avoidance of doubt, except as set forth 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 5.01(l262 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 Disclosure Schedule, and its Subsidiaries or (B) involve any criminal liability or any admission of material wrongdoing or any material wrongful conduct by the Company shall not, and shall not permit or any of its Subsidiaries to, Subsidiaries;
(ixvii) materially amend make any currently existing labor changes with respect to accounting policies or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitmentprocedures, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or changes in GAAP;
(nxviii) the Company shall notmake, and shall not permit any of its Subsidiaries to, take, change or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in revoke any material respect atTax election, change an annual U.S. Federal Income or as of any time prior toother material Tax accounting period, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make adopt or change any material tax election or change an annual Tax accounting period with respect to Taxesmethod, file any amended Tax Return, enter into any closing agreementagreement with respect to material Taxes, settle or compromise any material Tax claim, audit, assessment or liability relating to the Company or any of its Subsidiariesdispute, or surrender any right to claim a refund of a material amount of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent or agree to any an extension or waiver of the limitation period applicable to any Tax claim or assessment relating statute of limitations with respect to the Company assessment or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing determination of any Tax Return or the payment of any material Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(pxix) the Company shall (i) use its commercially reasonable efforts tocancel, and shall cause its Subsidiaries abandon or otherwise allow to use their respective commercially reasonable efforts to, prevent the termination of lapse or expire any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to Intellectual Property Rights that are owned by the Company or any of its Subsidiaries thanand 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 such Contract 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 making 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 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) 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 change the manner in which contributions to such amendment plans are made or modificationthe basis on which such contributions are determined, except as may be required by GAAP, (F) forgive any loans or issue any loans to any Company Employee (other than routine travel advances issued in the Ordinary Course of Business and those loans, advances, guarantees or capital contributions expressly permitted by Section 7.1(a)(vi)), (iiiG) not, and shall cause its Subsidiaries not 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 or (H) terminate the employment of any executive officer other than for cause;
(xxi) become a party to, enter intoestablish, or materially adopt, amend, modify commence participation in or supplement, terminate any Lease collective bargaining agreement or other Material Contract under which the costs agreement with a labor union, labor organization, works council or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregatesimilar organization; andor
(qxxii) the Company shall notagree, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
(b) 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 the Parent’s or Merger Sub’s operations prior to the Effective Time.
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Collectors Universe Inc), Merger Agreement (Collectors Universe Inc)
Interim Operations. Except (a) The Company shall, and shall cause each of its Subsidiaries to, from and after the date hereof until the earliest of the Additional Closing, the end of the Additional Shares Notice Period and the termination of this Agreement (unless Purchaser shall otherwise approve in writing), and except as otherwise contemplated expressly required by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule required by a Governmental Entity or as consented to in writing by Parentapplicable Law, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the conduct its business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course and, to the extent consistent therewith, shall use and cause each of business and the Company its Subsidiaries to use, their respective commercially reasonable efforts to maintain its and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizationsSubsidiaries’ relations and goodwill with Governmental Entities, keep available the services of their current officers and employees and preserve their relationships with their material customersclients, suppliers, licensors, licensees, advertisersdistributors, distributors creditors, lessors, employees and other material third parties having business dealings with them agents. From and after the date hereof until the earliest of the Additional Closing, the end of the Additional Shares Notice Period and the termination of this Agreement, the Company shall provide notice to preserve Purchaser if the goodwill Other Investor consents to an action restricted pursuant to Section 3.1(b)(3), (4) or (6)–(10) of their respective businesses;the Other Investment Agreement.
(b) Without limiting the Company shall notgenerality of and in furtherance of the foregoing sentence, from and shall not permit any after the date hereof until the earliest of its Subsidiaries tothe Additional Closing, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting end of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares the Additional Shares Notice Period and the termination of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests)this Agreement, except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as 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 (Bcorrect and complete copies of which have been made available to Purchaser) or entered into following the date of this Agreement in accordance with the terms of this Section 3.1, as approved in writing by Purchaser (such approval not to be unreasonably withheld, conditioned or delayed) or set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i3.1(b) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend :
(1) adopt or modify propose any Contract change in its Organizational Documents (other than to correct scrivener’s errors or immaterial or ministerial amendments);
(2) merge or consolidate with any Significant Customerother person, other than on terms substantially equivalent to, or more beneficial on balance to the Company or except for any of its such transactions solely among wholly owned Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or in connection with any acquisition permitted by clause (3) below, or restructure, reorganize or completely or partially liquidate;
(3) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its Subsidiaries resulting from such amendmentcapital stock, modification other equity interests or supplement would exceed $25,000 per annum individually securities convertible or $100,000 per annum exchangeable into or exercisable for all such amendmentsany shares of its capital stock or other equity interests, modifications and supplements in each case except in connection with tax withholding obligations of the aggregateCompany; andor
(q4) the Company shall notagree, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Investment Agreement (AlTi Global, Inc.), Investment Agreement (AlTi Global, Inc.)
Interim Operations. (a) Except (i) as otherwise contemplated expressly contemplated, required or permitted by this Agreement Agreement, (ii) as required by applicable Law, (iii) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned), (iv) as set forth in on Section 5.01 6.01 of the Company Disclosure Schedule Schedule, or as consented (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 writing by Parentreliance on this clause (v), to the extent permitted under applicable Law and practicable under the circumstances, the Company covenants shall provide prior notice to and agrees that during the period consult in good faith with Parent prior to taking such action), from the date of this Agreement until the earlier to occur of the Effective Time (or until termination of this Agreement in accordance with pursuant to Article 7 hereof):
(a) 8 and the business and operations of Effective Time, the Company will, and will cause its Subsidiaries shall be conductedto, use its and the books and records of the Company and its Subsidiaries shall be maintained, only their commercially reasonable efforts to (A) conduct their businesses in the ordinary course of business in all material respects and the Company and its Subsidiaries shall use their commercially reasonable best efforts to (B) preserve intact their current business organizations, keep available the services of their current officers organizations and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other Persons with which it has material third parties having business dealings with them and to preserve the goodwill of their respective businesses;dealings.
(b) Except (A) as expressly contemplated, required or permitted by this Agreement, (B) as required by applicable Law, (C) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned), (D) as set forth on Section 6.01 of the Company Disclosure Schedule, or (E) 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 (E), 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 8 and the Effective Time, the Company will not, and shall not permit any of will cause its Subsidiaries not to, :
(i) authorize for issuance, issue, deliver, sell (x) adopt any change in the certificate of incorporation or agree bylaws of the Company or commit to issue, sell or deliver (whether through y) adopt any change in the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock organizational documents of any of its the Company’s Subsidiaries, any other securities in each case whether by merger consolidation or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; otherwise;
(ii) repurchase, redeem merge or otherwise acquire any shares of the capital stock or other equity interests of consolidate the Company or any of its Subsidiaries (including, without limitation, securities exchangeable forwith any other Person, or optionsrestructure, warrantsreorganize, callsrecapitalize or completely or partially liquidate or dissolve or otherwise enter into any agreement or arrangement imposing any material restrictions on the assets, commitments operations or rights of any kind to acquire, capital stock or other equity interests business of the Company or any of its Subsidiaries); or ;
(iii) amendissue, modify sell, pledge, dispose of or waive encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any term shares of any outstanding security capital stock of the Company or any of its Subsidiaries, except 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) as required by this Agreement, any such transaction among the Company and its Subsidiaries or among the Company’s wholly owned Subsidiaries or (B) any issuance of Shares pursuant to exercise or settlement of Company Equity Awards outstanding as set forth in Section 5.01(b) of the Company Disclosure Schedule, date of this Agreement in connection accordance with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Planstheir terms;
(civ) make any loans, advances or capital contributions to or investments in any Person (other than to the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries wholly owned Subsidiaries);
(v) declare, set aside, make or alter through mergerpay any dividend or other distribution, liquidationpayable in cash, reorganizationstock, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend property or otherwise change its certificate of incorporation or bylaws or permit with respect to any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit 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 of its Subsidiaries to split, combine capital stock or reclassify securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid (A) any such transaction by direct or indirect a wholly owned Subsidiaries 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 to other wholly owned Subsidiaries (C) payment of the exercise price in respect of Company consistent with past practicesOptions, 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);
(evii) neither create, incur, assume or guarantee any Indebtedness for borrowed money or issue any debt securities or guarantees of the same or any other Indebtedness, except for (A) borrowings in the ordinary course of business under the Existing Credit Agreement, (B) guarantees or credit support provided by the Company nor or any of its Subsidiaries shall of the obligations of the Company or any of its Subsidiaries in the ordinary course of business to the extent such Indebtedness is in existence on the date of this Agreement or incurred in compliance with clause (iA) grant of this Section 6.01(b)(vii), or agree (C) any Indebtedness solely among the Company and its 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 increase capital expenditure or expenditures, in any manner the compensation or benefits of any current or former director, officer or employeeperiod, except increases capital expenditures in an amount not exceeding in the aggregate 120% of the amount included in such budget;
(ix) other than in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (iiA) enter into any new 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 5.01(k)(i)(N) or materially amend Section 5.01(k)(i)(O) shall be entered into without the prior written consent of Parent, or (B) amend, modify or waive in any existing Contractmaterial respect or terminate any Material Contract in a 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, transaction, commitment except as required by Law or arrangement by U.S. GAAP or official interpretations with respect thereto or by any current Governmental Authority or former director, officer, employee quasi-Governmental Authority (including the Financial Accounting Standards Board or affiliate any similar organization);
(xi) settle any Action for an amount in excess of $1 million individually or $5 million in the aggregate other than (A) any settlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries, Subsidiaries is fully covered by insurance coverage or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, retention amounts maintained by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” Subsidiaries and (B) settlements or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect compromises of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets Action for an amount not materially in excess of $25,000 individually the amount, if any, reflected or $50,000 specifically reserved in the aggregate other than balance sheet (i) pursuant to existing contracts and commitments described in Section 5.01(gor the notes thereto) of the Company Disclosure Scheduleincluded in the Company Reports (with materiality measured relative to the amount so reflected or reserved, (ii) immaterial properties or assets (or immaterial portions if any); provided that, in the case of properties or assets described in Section 5.01(g) each of the Company Disclosure Scheduleforegoing clauses (A) and (B), the settlement or compromise of such Action does not (iiix) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable impose any material restriction on the business or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization operations of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit or Parent or any of its Subsidiaries toafter the Closing) and (y) include any non-monetary or injunctive relief, or the admission of wrongdoing, by the Company or any of its Subsidiaries or any of their respective officers or directors;
(xii) sell, assign, lease, license, sublicense or otherwise transfer or dispose of, abandon or permit to lapse, fail to take any action necessary to maintain, enforce or protect, or create or incur any Lien (other than Permitted Liens), on any material assets or property (including any Company Intellectual Property and Licensed Intellectual Property) except (A) pursuant to existing contracts or commitments (or refinancings thereof), (iB) enter intotransactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, or materially amend, modify or supplement any Contract outside (C) in the ordinary course of business consistent with past practice 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 any Service Providers other than increases in base salary in the ordinary course of business for Service Providers with base salary of less than $300,000; (B) increase or accelerate or commit to accelerate the funding, payment or vesting of compensation or benefits provided under which any Benefit Plan, (C) grant or announce any cash, equity or equity-based, change of control, severance or retention award to any Service Provider; (D) establish, adopt, enter into terminate or amend (x) in any respect any Collective Bargaining Agreement or (y) in any material respect, any 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 exceeds $300,000, other than (x) hiring to replace departed employees or (y) terminations for “cause” (as determined in the Company’s reasonable discretion); provided, however, that the foregoing clauses (A), (B), (C), and (D) shall not restrict the Company or its Subsidiaries from making available to newly hired employees or independent contractors (in the ordinary course of business), plans, agreements, benefits and compensation arrangements (including cash incentive grants, but excluding any equity-related incentives)) that are on substantially the same terms and conditions and have a value that is consistent with the past practice of making compensation and benefits available to newly hired employees or independent contractors in similar positions or for employees or independent contractors with similar levels of responsibility;
(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 shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(jbusiness;
(xv) cancel, modify, amend or waive or terminate the Existing Credit Agreement, except for modifications or amendments to the Existing Credit Agreement that would not (A) impair the ability of Parent to obtain the Debt Financing on the Closing Date, (B) reduce the ability of the Company Disclosure Schedule by categoryand its Subsidiaries to incur secured debt for borrowed money in the form 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 Existing Credit Agreement) on the Closing Date in any material respect, (D) impair the ability of the Merger to be consummated in compliance with any “merger” or make “fundamental changes” covenant in the Existing Credit Agreement or (E) amend 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, or amend or modify any such agreement to reduce the amount of the total lending commitments with respect to capital expenditures thereunder; implement or other planned capital expenditures announce any permanent plant closings or permanent facility shutdown that would implicate the WARN Act;
(xvi) other than in the ordinary course of business consistent with past practices in excess (A) make, change or revoke any material Tax election; (B) change any material Tax accounting period or method of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries toTax accounting, (iC) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practicesfile any material amended Tax Return, (iiD) use reasonable best efforts not settle or compromise any material claim related to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminatedTaxes, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (iiE) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other material closing agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(mF) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxesmaterial Tax refund, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent offset or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;reduction in liability; or
(pxvii) the Company shall (i) use its commercially reasonable efforts toagree, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Convey Health Solutions Holdings, Inc.), Merger Agreement (Convey Health Solutions Holdings, Inc.)
Interim Operations. (a) Except as otherwise contemplated (i) required by this Agreement Agreement, (ii) required by applicable Law or as the DOJ Agreement, (iii) approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (iv) set forth in on Section 5.01 6.1(a) of the Company Disclosure Schedule or as consented to in writing by ParentSchedule, the Company covenants and agrees that during the period 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 Effective Time extent consistent therewith, the Company shall, and shall cause its Subsidiaries to, use its and their commercially reasonable efforts to preserve their business organizations intact and to maintain existing business relationships (including with customers and suppliers); provided, that no action by the Company or until termination 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 or the DOJ Agreement, (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 in accordance with Article 7 hereof):until the Effective Time, the Company will not, and will cause its Subsidiaries not to:
(ai) (x) adopt or submit to stockholder approval 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 be adverse to Parent or Merger Sub or adversely affect or delay 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, except for any such transaction between or among any of its wholly owned 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 operations business of the Company and its Subsidiaries shall that would be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts adverse to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell Parent or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any other securities agreement or any securities convertible arrangement imposing, individually or exercisable into, or any rights, warrants or options to acquirein the aggregate, any such shareschanges or restrictions on the assets, securities operations or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests business of the Company or any of its Subsidiaries except for restructuring, reorganizations or complete or partial liquidations that do not incur, increase or accelerate any material liability to any Person;
(includingiii) acquire (including by merger, without limitationconsolidation or acquisition of equity interests or assets or any other business combination) (A) any corporation, securities exchangeable forpartnership or other business organization or (B) any assets outside of the ordinary course of business consistent with past practice from any other Person in any transaction or series of related transactions (in the case of clause (B), for consideration in excess of $10,000,000 in the aggregate);
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or optionsauthorize the issuance, warrantssale, callspledge, commitments disposition, grant, transfer, lease, license, guarantee or rights Lien against, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of any kind to acquire, capital stock or other equity interests 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 wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries, (B) any issuance, sale, grant or transfer of Shares pursuant to (1) exercise or settlement of Company Equity Awards outstanding as of the date of this Agreement or granted after the date of this Agreement not in violation of this Agreement, in each case in accordance with their terms or (iii2) amendthe conversion of Subordinated Convertible Notes in accordance with their terms or (C) with respect to encumbrances, pursuant to the Company Credit Agreement as in effect on the date hereof.
(v) make any loans, advances or capital contributions to any Person (other than (A) to the Company or any of its wholly-owned Subsidiaries, (B) operating leases and extensions of credit terms to customers in each case in the ordinary course of business consistent with past practice and (C) loans or advances made by the Company or any of its Subsidiaries to employees in the ordinary course of business consistent with the terms set forth in Section 6.1(b)(v) of the Company Disclosure Schedule);
(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 capital stock (except for (A) 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 and (B) quarterly dividends to stockholders of the Company by the Company in an amount not to exceed $0.18 per Share with record and payment dates for such dividends consistent with practice or, subject to the preceding clause (B) (which, for the avoidance of doubt, shall be permitted), take any other action or permit any event or circumstances to occur that would cause or require an adjustment of the “Conversion Rate” (as defined in the Subordinated Convertible Notes Indenture);
(vii) 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 (except for (A) any such transaction by a wholly-owned Subsidiary of the Company, (B) acquisitions of Shares in satisfaction of withholding obligations 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 and (C) redemptions or acquisitions of the Subordinated Convertible Notes to the extent required by, and in accordance with, the terms thereof);
(viii) create, incur, assume, guarantee, endorse, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees of the same or any other Indebtedness incurred outside the ordinary course of business consistent with past practice, 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 grant any Liens on any of its assets, except for (A) borrowings in the ordinary course of business consistent with past practice under the Company’s credit facilities as in effect on the date hereof or under facilities that replace or refinance such existing credit facilities and that (I) can be repaid on the Closing Date in connection with the Closing without premium or penalty and (II) do not increase the aggregate amount of the commitments thereunder relative to the facilities so replaced or refinanced and (B) guarantees by the Company of the obligations of its Subsidiaries incurred in the ordinary course of business consistent with past practice, and (C) indebtedness for borrowed money that can be prepaid without premium or penalty on the Closing Date in connection with the Closing in an amount not to exceed $25,000,000 in the aggregate;
(ix) 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 $5,000,000 individually or $10,000,000 in the aggregate;
(x) other than in the ordinary course of business (it being understood that this ordinary course exception shall not apply to any actual or potential Material Contracts pursuant to clauses B, D, E, G, I, K or L of the definition thereof) 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 waive assign or terminate any term Material Contract (other than expirations of any outstanding security such 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 thereunder, or amend or modify in any respect or assign, terminate or fail to comply with the DOJ Agreement;
(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 Financial 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), other than settlements that result solely in monetary obligations of the Company or its Subsidiaries (without the admission of wrongdoing or a nolo contendere or similar plea, the imposition of injunctive or other equitable relief, or restrictions on the future activity or conduct, by, of or on Parent, the Company or any of their respective Subsidiaries) involving payment by the Company or any of its Subsidiaries of (A) amounts not in excess of the sum of (x) amounts specifically reserved in accordance with U.S. GAAP with respect to such proceeding on the Company’s consolidated financial statements for the quarterly period ending September 30, 2017 plus (y) $500,000, or (B) an amount not greater than $500,000 individually or $3,000,000 in the aggregate;
(xiii) (A) make, change or revoke any Tax election, (B) except in the ordinary course of business and consistent with past practice, file any amended Tax Return, (C) adopt or change any accounting method for Taxes, (D) settle or compromise any Tax liability or any audit, examination or other proceeding in respect of Taxes, (E) surrender any claim for a refund of Taxes, or (F) enter into any closing agreement relating to Taxes, except, in each case, to the extent such action would not, individually or in the aggregate, reasonably be expected to result in a material increase in the Tax liability of the Company and its Subsidiaries taken as a whole (it being agreed and understood that this exception shall not be construed to permit the Company or any of its Subsidiaries, without the approval of Parent (such approval not to be unreasonably withheld, delayed or conditioned), to settle or compromise any Tax liability or any audit, examination or other proceeding in respect of Taxes in excess of $500,000 individually or $3,000,000 in the aggregate);
(xiv) transfer, sell, lease, license, permit to lapse, abandon, divest, cancel or otherwise dispose of, or permit or suffer to exist the creation of any Lien upon other than Permitted Liens, any assets or capital stock of the Company or any of its Subsidiaries, except (A) as required by this Agreement, inventory or Registered Intellectual Property in the ordinary course of business consistent with past practice or (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends having a value not in excess of $0.075 per Common Share declared and paid consistent with past practices, 5,000,000 individually or $15,000,000 in the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices)aggregate;
(exv) neither except as required by any Benefit Plan as in effect on the Company nor date hereof, (A) terminate, adopt, establish, enter into, amend or renew any of its Subsidiaries shall Benefit Plan, other than amendments that do not increase benefits or result in increased costs, (iB) grant or agree to any increase in any manner the compensation compensation, benefits, severance or benefits termination pay of any of the current or former directordirectors or employees of the Company or its Subsidiaries, (C) pay any bonus or incentive compensation under any Benefit Plan, other than to the extent permitted by Section 6.9(d), (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 severance, change in control, retention benefit or any other award (other than severance pursuant to separation agreements entered into with terminated employees who are not executive officers in the ordinary course of business consistent with past practice providing for severance not in excess of that required by applicable Law or a Benefit Plan in effect on the date hereof), (F) take any action to accelerate the payment of, or to fund or secure the payment, of any amounts under any Benefit Plan, (G) hire any (x) executive officer or employee(y) employee or consultant who is a natural person with a base salary or annualized base wage amount in excess of $150,000, except increases (H) promote any executive officer of the Company or promote any employee to an executive officer position or a position for which the base salary or annualized base wage amount exceeds $150,000, (I) become a party to, establish, adopt, renew, materially amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council, public labor authority, or similar organization or (J) terminate without cause the employment of any executive officer of the Company;
(xvi) factor any receivables or effect any reverse factoring except, solely in the case of reverse factoring, in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;; or
(fxvii) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries toagree, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
(c) Subject to the terms of this Agreement, including Section 6.5 and Section 6.13, after the date of this Agreement and prior to the Effective Time, the Company, Parent and Merger Sub shall not take or permit any of their respective Subsidiaries to take or agree to take any action that would reasonably be expected to prevent, materially impair or materially delay the consummation of the Merger.
(d) 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 and its Subsidiaries prior to the 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.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or Subsequent to the date hereof and prior to the date on which a majority of ▇▇▇▇▇▇▇▇'▇ directors are designees of Acquisition, unless Acquisition has consented in writing thereto (which consent shall not be unreasonably withheld), except as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parenton SCHEDULE 5.02, the Company covenants and ▇▇▇▇▇▇▇▇ agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):it:
(a) shall, and shall cause its Major Subsidiaries to, conduct their operations in all material respects according to their usual, regular and ordinary course in substantially the business same manner as heretofore conducted;
(b) shall use its reasonable efforts, and operations of the Company and shall cause its Subsidiaries shall be conductedother than inactive Subsidiaries to use its reasonable efforts, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizationsorganizations and goodwill, keep available the services of their current respective officers and employees and preserve their maintain satisfactory relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties those persons having business dealings relationships with them and (Acquisition agreeing to preserve the goodwill of their respective businessesreasonably cooperate with ▇▇▇▇▇▇▇▇ in such efforts);
(bc) shall promptly deliver to Acquisition true and correct copies of any report, statement or schedule filed with the Company SEC or any other state or federal Governmental Authority in connection with this Agreement and the transactions contemplated hereby;
(d) shall not, and shall not permit any of the Subsidiaries to, amend its Certificate of Incorporation or By-laws;
(e) shall not, and shall cause each of the Subsidiaries to not, (w) issue, transfer, deliver or sell any shares of its capital stock, effect any stock split or otherwise change its capitalization as it existed on the date hereof, (x) grant, confer or award any Option, Voting Debt, conversion right or other right not existing on the date hereof to acquire any share of its capital stock, or amend the terms of or reprice any outstanding option, warrant, or conversion right, or grant, confer or award any bonuses or other forms of cash incentives to any officer, director or employee except consistent with past practice, (y) increase any compensation under any employment agreement with any of its present or future officers, directors or employees, except for normal increases consistent with past practice, grant any severance or termination pay to, or, except on a basis consistent with the letter of even date herewith from Acquisition to ▇▇▇▇▇▇▇▇, enter into any employment or severance agreement with, or extend any loan or advance to any officer, director or employee or amend any such agreement in any material respect other than severance arrangements which are consistent with past practice with respect to employees terminated by ▇▇▇▇▇▇▇▇, or (z) adopt any new employee benefit plan (including, without limitation, any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan (other than a multiemployer plan) in any material respect, without Acquisition's written consent, not to be unreasonably withheld;
(f) shall not (i) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock or other ownership interests other than the regular quarterly cash dividend of $0.0625 per share payable to shareholders of record at September 30, 1997, or (ii) directly or indirectly redeem, purchase or otherwise acquire any shares or its capital stock or capital stock of any of the Subsidiaries, or make any commitment for any such action;
(g) shall not, and shall not permit any of the Subsidiaries to, acquire, sell, lease, encumber or otherwise dispose of any assets for its own account (including, without limitation, capital stock of or other equity interests in Subsidiaries or other entities) in the aggregate for an amount exceeding $250,000 except in the ordinary course of business or as set forth on SCHEDULE 5.02;
(h) shall not, and shall not permit any of the Subsidiaries to, incur or assume any indebtedness for borrowed money, except in the ordinary course of business consistent with past practice or as set forth on SCHEDULE 5.02, or guarantee any such indebtedness or make any loans, advances or capital contributions to, or investments in, any other person other than wholly-owned subsidiary, except in compliance with any partnership agreement or joint venture agreement to which ▇▇▇▇▇▇▇▇ or a Subsidiary is a party, or otherwise or sell any debt securities, in the aggregate exceeding $250,000;
(i) shall not, nor shall it permit any of its Subsidiaries to, (i) authorize for issuancemerge or consolidate with, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber acquire any shares of its capital stock or the capital stock of any of its Subsidiariesequity interest in, any corporation, partnership, association or other securities or any securities convertible or exercisable intobusiness organization, or any rights, warrants enter into an agreement with respect thereto or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the acquire any assets or capital stock or other equity interests of, or by any other manner, any business or of any corporation, partnership, association or other business organization or division thereof other than acquisitions thereof, except for the purchase of inventory and supplies in the ordinary course of business;
(j) shall not authorize, recommend, propose or purchases made with announce an intention to adopt a plan of complete or partial liquidation or dissolution of ▇▇▇▇▇▇▇▇ or any of its Subsidiaries;
(k) shall not, nor shall ▇▇▇▇▇▇▇▇ permit any of its Subsidiaries to, (A) enter into any contracts involving in any individual case, aggregate annual payments by ▇▇▇▇▇▇▇▇ or any of its Subsidiaries in each case for its own account in excess of $250,000 or (B) modify, rescind, terminate, waive, release or otherwise amend in any material respect any of the terms or provisions of any material contract in any manner that is material and adverse to the ▇▇▇▇▇▇▇▇ or the respective Subsidiary of ▇▇▇▇▇▇▇▇ party thereto;
(l) not settle or compromise any claim for appraisal rights in respect of the Merger without the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(gm) the Company shall not, and shall not permit any of its the Subsidiaries to, authorize or make capital expenditures in excess of $250,000 in the aggregate, except for, (x1) incurin the case of ▇▇▇▇▇▇, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations the purchase and development of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities land described on SCHEDULE 5.02 in the ordinary course of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of business and (2) capital expenditures in an aggregate amount not exceeding $2,000,000 in connection with moving ▇▇▇▇▇▇▇▇'▇ corporate offices;
(n) shall not and shall not permit any of the foregoing; Subsidiaries to, mortgage or (y) sell, lease, license otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess except as would not materially adversely affect the business of $25,000 individually ▇▇▇▇▇▇▇▇ or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiariesany Major Subsidiary;
(ho) neither the Company nor shall not make any of material change to its Subsidiaries shall adopt accounting (including tax accounting) methods, principles or put into effect a plan of complete practices, except as may be required by generally accepted accounting principles or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);applicable tax laws; and
(ip) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its the Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, do or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoingforegoing set forth in clauses (d), (e), (f), (g), (h), (i), (j), (k), (l), (m), (n) and (o).
Appears in 1 contract
Sources: Merger Agreement (Startt Acquisition Inc & Startt Acquisition LLC)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Company Merger Effective Time (or until the earlier termination of this Agreement in accordance with Article 7 hereof):
ARTICLE VIII (a) unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), and except as otherwise expressly permitted by this Agreement, actions taken in accordance with the Pre- Closing Restructuring or Modified Pre-Closing Restructuring or as required by applicable Laws), the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary course of business and usual course, consistent with past practice, and the Company and its Subsidiaries shall use their commercially respective reasonable best efforts to preserve intact their respective current business organizations, keep available their goodwill and relationships with Governmental Entities, tenants, creditors and others having material business dealings with them, and the services of their current officers respective present officers; provided that this Section 6.1 shall not apply to the actions of GWP JV Limited Partnership or its subsidiaries approved by the limited partners thereof in accordance with its Amended and employees Restated Limited Partnership Agreement or taken by any such subsidiary in accordance with the organizational documents of such subsidiary. Without limiting the generality of, and preserve their relationships with their material customersin furtherance of, suppliersthe foregoing, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve from the goodwill date of their respective businesses;
(b) this Agreement until the Company shall notMerger Effective Time or the earlier termination of this Agreement in accordance with ARTICLE VIII, except (A) as otherwise expressly permitted or required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed, and which shall not exceed five (5) business days following the date of request for approval by Parent accompanied by all information reasonably necessary for Parent to evaluate such request), (C) any actions taken in accordance with the Pre-Closing Restructuring or Modified Pre-Closing Restructuring or (D) as required by applicable Laws, the Company will not and will not permit any of its Subsidiaries to, :
(i) authorize adopt or propose any change in its certificate of incorporation or bylaws or other applicable governing instruments;
(ii) merge or consolidate with any other Person, except for issuanceany such transactions among the Company and/or wholly-owned Subsidiaries of the Company, issueor restructure, deliverreorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, sell operations or agree businesses;
(iii) (x) make or commit to issue, sell or deliver make any capital expenditures other than (whether through A) as set forth on Section 6.1(a)(iii) of the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable intoCompany Disclosure Letter, or (B) as necessary to repair and/or prevent damage to any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests property of the Company or any of its Subsidiaries in the event of an emergency situation after prior notice to Parent, and if the same is not covered by applicable insurance, in an amount not to exceed $500,000 with respect to any individual circumstance or $2,500,000 in the aggregate (includingprovided that if the nature of such emergency renders prior notice to Parent impracticable, without limitation, securities exchangeable forthe Company shall provide notice to Parent as promptly as practicable after making such capital expenditure), or (y) make or commit to make any expenditure relating to any property of the Company, except in the usual and ordinary course of business consistent with past practice in order to maintain such property in working order;
(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 any class, any partnership interests or any equity equivalents (including any stock options or stock appreciation rights), any securities convertible into or exchangeable or exercisable for any shares of such capital stock, partnership interests or equity equivalents, or any options, warrants, calls, commitments warrants or other rights of any kind to acquireacquire any shares of such capital stock, partnership interests or equity equivalents or such convertible or exchangeable securities, except for (1) the issuance of shares, partnership interests or equity equivalents by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company, (2) the issuance of Company Common Shares issuable upon redemption of partnership units in the Partnership or the Operating Partnership in accordance with the terms of the relevant limited partnership agreement, and (3) the issuance of Company Common Shares issuable upon the exercise, vesting or settlement of Company Equity Awards in existence as of the date of this Agreement in accordance with their terms in effect as of the date hereof;
(v) except as set forth on Section 6.1 (a)(v) of the Company Disclosure Letter, mortgage or pledge any of their respective assets, tangible or intangible, or create or suffer to exist any Lien thereupon (other than Permitted Liens), except in an amount not to exceed $50,000 in the aggregate, so long as such mortgage or pledge is pre-payable without penalty;
(vi) make any loans, advances, guarantees or capital stock contributions to or investments in any Person (other equity interests than the Company or any direct or indirect wholly-owned Subsidiary of the Company, and, in the case of a joint venture, and to the extent the Company or any of its SubsidiariesSubsidiaries are contractually obligated to make any such loan, advance, guarantee, capital contribution or investment pursuant to any Contract in effect as of the date hereof);
(vii) authorize, declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any shares of its capital stock, partnership interests or other equity interests, or make any actual, constructive or deemed distribution in respect of any shares of its capital stock, partnership interests or other equity interests, or otherwise make any payments to equityholders in their capacity as such, except for (1) dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary of the Company, (2) dividends on the Series A Company Preferred Shares in accordance with their terms, (3) dividends on the Partnership Series A Preferred Units and the Series A preferred partnership units in the Operating Partnership in accordance with their respective terms, (4) subject to Section 6.14, upon consultation with Parent, distributions reasonably required for the Company to maintain its status as a REIT under the Code or to avoid the payment of income or excise tax under Sections 857 or 4981 of the Code; (5) dividend equivalents payable upon the vesting or settlement of Company RSUs or Company PSUs in existence as of the date of this Agreement; (6) dividends or other distributions made to GWP JV Limited Partnership pursuant to the terms of its Amendment and Restated Limited Partnership Agreement; (7) dividends declared and publicly announced by the Company prior to the execution of this Agreement; and (8) the Pre-Closing Dividend;
(viii) except for the Voting and Support Agreement, enter into any agreement with respect to the voting of its capital stock, partnership interests or other equity interests;
(ix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, partnership interests or other equity interests or securities convertible into or exchangeable or exercisable for any shares of its capital stock, partnership interests or other equity interests, except for any such redemption, purchase or other acquisition (1) as may be required by the Company Charter, the Partnership Agreement or the Operating Partnership LP Agreement or pursuant to settlement of any Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plan as in effect on the date of this Agreement, (2) after consultation with Parent, as may reasonably be required for the Company to maintain its status as a REIT under the Code and to avoid the payment of income or excise Tax under Sections 857 or 4981 of the Code through the partial taxable year deemed to end on the Company Effective Merger Time or (3) in connection with (A) the payment of the exercise price of Company Options with Company Common Shares, (B) the withholding of Taxes in connection with the exercise, vesting and settlement of Company Equity Awards in existence as of the date of this Agreement in accordance with their terms in effect as of the date hereof, (C) forfeitures of Company Equity Awards in existence as of the date of this Agreement in accordance with their terms in effect as of the date hereof; or (iii4) amendthe redemption of the Series A Company Preferred Shares in accordance with the terms of this Agreement;
(x) incur, modify assume or waive refinance any term indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any outstanding debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) as required by this Agreement, intercompany indebtedness of wholly-owned Subsidiaries of the Company or (B) as set forth guarantees incurred in compliance with this Section 5.01(b) 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock PlansCompany;
(cxi) prepay or terminate any indebtedness for borrowed money, or modify in any material respect the Company shall not terms of any such indebtedness or of any documents evidencing or securing such indebtedness;
(xii) except pursuant to (i) sell, transfer any mandatory payments under any credit facilities or pledge, other similar arrangements in existence on the date of this Agreement or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends amounts individually not in excess of $0.075 per Common Share declared and paid consistent with past practices100,000, or in the Company shall notaggregate, and shall not permit to exceed $500,000, in each case, in excess of applicable insurance proceeds, incur, pay, discharge or satisfy any of its Subsidiaries toclaims, declareliabilities or obligations (absolute, set aside accrued, asserted or pay any dividends on (whether in cashun-asserted, stock contingent or other propertyotherwise), other than any payment, discharge or make any other distributions in respect of, any of its capital stock satisfaction (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(ex) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary and usual course of business consistent with past practice, increases (y) reflected or reserved against in the most recent consolidated financial statements (or notes thereto) included in the Company Reports filed prior to the date of this Agreement, or (z) of fees, costs and bonuses expressly required under existing employment agreementsexpenses incurred in connection with the preparation, bonus plans execution and other agreements performance of this Agreement and arrangements listed or described in the transactions contemplated hereby;
(xiii) except as set forth on Section 5.01(e6.1 (a)(xiii) of the Company Disclosure Schedule and Letter, enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement (subject to clause (xx) below in respect of Company Leases);
(xiv) make any changes with respect to accounting policies or procedures, except (i) as required by changes in connection with accelerating the vesting schedules applicable generally accepted accounting principles (or any interpretation thereof), Regulation S-X of the Options and terminating Exchange Act or a Governmental Entity or quasi-Governmental Entity (including the Options and the Stock Plans, Financial Accounting Standards Board or any similar organization) or (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or as required by a change in applicable Law;
(iiixv) except as set forth in Section 5.01(e6.1(a)(xv) of the Company Disclosure ScheduleLetter, as may be required settle or compromise any litigation or other proceeding before a Governmental Entity (whether or not commenced prior to comply with applicable Law and as provided or otherwise contemplated in the date of this Agreement (including, without limitation, Section 2.02 hereofAgreement), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy except for the benefit of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall amounts not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually 500,000 individually, or $50,000 1,000,000 in the aggregate other than (i) pursuant to existing contracts aggregate, in each case in excess of applicable insurance proceeds, and commitments described in Section 5.01(g) that do not involve the imposition of the Company Disclosure Schedule, (ii) immaterial properties injunctive or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of equitable relief against the Company or any of its Subsidiaries or (ii) litigation or other than any transaction specifically contemplated proceedings arising from the ordinary and usual course of operations of the Company and its Subsidiaries involving collection matters or personal injury which are covered by this Agreementadequate insurance (subject to customary deductibles);
(ixvi) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)terminate, or (ii) waive, release, grant, assigncancel, modify or transfer waive any of its material rights debts or claims held by it, or waive compliance with the terms of or breaches under, any Material Contract (whether such rights or claims arise under a Contract or otherwisesubject to clause (xx) below in respect of Company Leases);
(jxvii) take any action that could or fail to take any action, the failure of which could reasonably be expected to cause (A) Company to fail to qualify as a REIT under the Code or (B) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (Partnership to be treated other than pursuant to commitments prior to the date hereof as a partnership or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregatedisregarded entity for U.S. federal income tax purposes;
(kxviii) the Company shallmake, and shall cause its Subsidiaries tochange or rescind any Tax election (except for an affirmative election under Section 754), (i) continue in force insurance with good and responsible insurance companies adequately covering risks change a method of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practicesTax accounting, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor income or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth change in Section 5.01(o) of the Company Disclosure Scheduleannual accounting period, consent to any extension or of waiver of the limitation period applicable to any Tax claim or assessment relating to Taxes (except where relating to an extension of time to file any income or other Tax Return), settle or compromise any material federal, state, local or foreign Tax liability, audit, claim or assessment, enter into any closing agreement related to Taxes, request any ruling with respect to Taxes from a Governmental Entity, or surrender any right to claim any Tax refund, except, in each case, to the extent the Company reasonably determines, after consultation with Parent, that such action is (A) required by Law, (B) necessary or advisable (x) to elect or to preserve Company’s qualification as a REIT under the Code or (y) to qualify or preserve the status of any Subsidiary as a disregarded entity or partnership for U.S. federal income tax purposes or as a Qualified REIT Subsidiary or a Taxable REIT Subsidiary under the applicable provisions of Section 856 of the Code, as the case may be, or (C) reasonably necessary or appropriate in connection with determining the tax status and/or filing returns for the Company or any Subsidiary for the year ending either December 31, 2016 or on a date during 2017 prior to the Closing Date, including the Company or any Subsidiary for which the first taxable year thereof is the year ending December 31, 2016;
(1) sell, transfer, dispose of or encumber (A) any personal property that exceeds $200,000 in the aggregate, (B) any capital stock, partnership interests or other equity interests of any of its Subsidiaries, or (C) any real property; or (2) enter into any contract or letter of intent for the sale, transfer, mortgage or disposition of any real property;
(xx) enter into, renew, modify, amend or terminate, waive, release, compromise or assign any rights or claims under, any Company Lease (or any lease for real property that, if existing as of the date hereof, would be a Company Lease), except for (A) entering into any new lease or renewing or modifying any Company Lease in the ordinary course of business consistent with past practice on market terms and where any such new lease or Company Lease, together with any other lease to the same or an affiliated tenant, (1) relates to premises of no more than 25,000 square feet and (2) requires no more than $1,000,000 in capital commitments, (B) terminating any Company Lease as a result of a material default by the counterparty to such Company Lease (in accordance with the terms of such Company Lease and subject to any applicable cure period therein), (C) any termination, modification or renewal in accordance with the terms of any existing Company Lease that occurs automatically without any action (other than notice of renewal) by the Company, the Partnership or any of their Subsidiaries or (D) as set forth in Section 6.1(a)(xx) of the Company Disclosure Letter;
(xxi) except as set forth in Section 6.1(a)(xxi) of the Company Disclosure Letter or as required by applicable Law or pursuant to the terms of any previously disclosed Benefit Plan, (i) grant or provide any severance or termination payments or benefits to any director, officer, employee or consultant (who is a natural person) of the Company or any of its Subsidiaries, or take any other similar actionexcept, or omit to take any action relating to in the filing case of any Tax Return or employees who are not officers, in the payment ordinary course of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract business consistent with any Significant Customerpast practice, (ii) notincrease the compensation, and shall cause its Subsidiaries not tobonus or pension, amend welfare, severance or modify other benefits of, pay any Contract with any Significant Customer, other than on terms substantially equivalent bonus to, or more beneficial on balance make any new equity awards to the Company any director, officer, employee or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. Except The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, and except as otherwise expressly contemplated by this Agreement), and except as (i) required by applicable Law or (ii) is necessary and commercially reasonable in response to a Contagion Event or Contagion Event Measures , (a) the business of the Company and its Subsidiaries shall be conducted in all material respects in the ordinary and usual course in accordance with its current business practices and operation, (b) each of the Company and its Subsidiaries shall use its reasonable best efforts to preserve its business organizations and assets intact and maintain its rights, franchises, powers and privileges and its existing relations and goodwill with Governmental Authorities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of the Company and its Subsidiaries’ present employees and agents, and (c) subject to Section 5.09, the Company and its Subsidiaries shall take no action that would reasonably be expected to adversely affect or materially delay the ability of the Company to obtain any necessary approvals of any Regulatory Authorities or other Governmental Authority required for the transactions contemplated hereby, to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement or as required by Law, (B) as Parent may approve in writing in advance (such approval not to be unreasonably withheld, conditioned or delayed) or (C) as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, not and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.:
Appears in 1 contract
Interim Operations. Except (a) as otherwise contemplated expressly required or permitted by this Agreement or as required by Law, (b) as Parent may approve in writing or (c) as set forth in in
Section 5.01 6.01 of the Company Suncrest Disclosure Schedule or as consented to in writing by ParentSchedule, the Company covenants and agrees that during the period from the date of this Agreement to until the earlier of the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business 8, Suncrest shall, and operations shall cause each of the Company and its Subsidiaries shall be conductedto, and the books and records of the Company and (i) conduct its Subsidiaries shall be maintained, only business in the ordinary course of business and the Company and consistent with past practice in all material respects, (ii) use its Subsidiaries shall use their commercially reasonable best efforts to maintain and preserve intact their current its business organizationsorganization and advantageous business relationships, and goodwill with Governmental Authorities, customers, suppliers, distributors, creditors, lessors, officers and employees and business associates and keep available the services of their current officers Suncrest and its Subsidiaries’ present employees and preserve their relationships agents, (iii) maintain in full force and effect insurance comparable in amount and scope of coverage to that now maintained by it, and (iv) take no action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of either Suncrest or Parent to obtain any necessary approvals of any Governmental Authority required for the transactions contemplated hereby or to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the earlier of the Effective Time or termination of this Agreement in accordance with their material customersArticle 8, suppliersexcept (A) as otherwise expressly required or permitted by this Agreement or as required by Law, licensors(B) as Parent may approve in writing or (C) as set forth in Section 6.01 of the Suncrest Disclosure Schedule, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company Suncrest shall not, not and shall not permit any of its Subsidiaries to, :
(a) (i) authorize for issuanceOther than pursuant to Suncrest Options and Suncrest Stock Awards outstanding on the date of this Agreement, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the issuance or granting of optionscreation of, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any additional shares of its capital stock stock, or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable exchangeable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities or receive a cash payment based on the value of any shares of such capital stock, (ii) permit any additional shares of its Subsidiaries to splitcapital stock, combine or reclassify securities convertible or exchangeable into, or exercisable for, any shares of its 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 or receive a cash payment based on the value of any shares of such capital stock, to become be subject to new grant, or (iii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its stock or other securities.
(b) Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of its capital stock.
(c) Except with respect to contracts relating to loans made in the ordinary course of business, amend or modify the material terms of, waive, release or assign any rights under, terminate, renew or allow to renew automatically, make any payment not then required under, fail to comply with or violate the terms of or enter into (i) any Material Contract, Lease, Regulatory Agreement, CRA Agreement, or any Contract that would be a Material Contract if it were in existence on the date hereof or other binding obligation that is material to Suncrest and its Subsidiaries, taken as a whole, (ii) any restriction on the ability of Suncrest or its Subsidiaries to conduct its business as it is presently being conducted or (iii) any Contract governing the terms of Suncrest Common Stock or rights associated therewith or any other outstanding capital stock or any outstanding instrument of indebtedness, in each case which is not terminable at will or within sixty (60) calendar days or less notice without payment of any amount other than for products delivered or services performed through the date of termination.
(d) Sell, transfer, mortgage, lease, guarantee, encumber, license, let lapse, cancel, abandon or otherwise create any Lien on or otherwise dispose of or discontinue any of its assets, deposits, business or properties (other than quarterly dividends sales pursuant to Section 6.01(p), which Section 6.01(p) will exclusively govern such sales), except for sales, transfers, mortgages, leases, guarantees, encumbrances, licenses, lapse, cancellation, abandonments or other dispositions or discontinuances in the ordinary course of business consistent with past practice and in a transaction that, together with other such transactions, does not exceed $50,000.
(e) Acquire (other than by way of foreclosures or acquisitions of control in excess a fiduciary or similar capacity or in satisfaction of $0.075 per Common Share declared debts previously contracted in good faith, in each case in the ordinary course of business) all or any portion of the assets, business, deposits or properties of any other entity, except in the ordinary course of business and paid in a transaction that, together with other such transactions, is not material to it and its Subsidiaries, taken as a whole, and would not reasonably be expected to present a material risk that the Closing Date will be materially delayed or that any requisite regulatory approvals will not be obtained.
(f) Amend the Suncrest Articles or the Suncrest Bylaws, or similar governing documents of any of its Subsidiaries.
(g) Except as and solely when required under applicable Law or the terms of any Employee Benefit Plan in effect as of the date hereof (taking into account actions required by Section 6.14):
(i) increase in any manner the compensation, bonus or pension, welfare, severance or other benefits of any of the current or former directors, officers, employees or other service providers of Suncrest or its Subsidiaries, except for ordinary course merit-based increases in the base salary of employees (other than directors) (not exceeding 110% in the aggregate) consistent with past practice or as set forth in Section 6.01(g)(ii) below,
(ii) accrue, grant, pay or agree to pay any annual, quarterly, monthly or other bonus or other incentive compensation (excluding any severance, retention, retirement or termination pay, which shall be subject to clause (v) of this Section 6.01(g) below), other than:
(A) any bonuses and other incentive compensation that are payable by Suncrest on an annual basis in the ordinary course of business consistent in all material respects with past practice for the year ending December 31, 2021; provided, however, such bonuses shall not exceed, solely for each such individual whose employment terminates upon consummation of the Merger, the lesser of (i) 110% of the amount of such employee’s annual bonus for the year ended December 31, 2020 (pro rated for the portion of the calendar year prior to the closing date) and (ii) the amount accrued as of the Closing Date on the Suncrest Financial Statements with respect to such employee.
(iii) become a party to, establish, amend, alter a prior interpretation of in a manner that enhances rights or materially increases costs, commence participation in, terminate or commit itself to the adoption of any Employee Benefit Plan or plan that would be an Employee Benefit Plan if in effect as of the date hereof, other than de minimis amendments in the ordinary course of business consistent with past practice or as required pursuant to the terms of such Employee Benefit Plan,
(iv) grant (or commit to grant) any new equity award,
(v) grant, pay or increase (or commit to grant, pay or increase) any severance, retention, retirement or termination pay, other than pursuant to (i) the Employee Benefit Plans in effect as of the date hereof as listed on Section 6.01(g)(v)(i) of the Suncrest Disclosure Schedule; and (ii) a pool for retention payments to the Suncrest employees by Suncrest to be mutually agreed upon by the Parties in an amount not exceeding the amount set forth in Section 6.01(g)(v)(ii) of the Suncrest Disclosure Schedule, and provided further that, except for the aggregate amount specifically set forth on Section 6.01(g)(v)(ii) of the Suncrest Disclosure Schedule, no retention award or retention payment shall be made by Suncrest pursuant to such retention pool unless the terms and conditions of such retention award and payment (including (A) the selection of each participant, (B) each participant’s proposed retention payment amount, (C) the employment and other conditions that each participant must satisfy before payment is due and (D) the timing for each retention payment) have been approved by Parent,
(vi) accelerate the payment or vesting of, or lapsing of restrictions with respect to, any stock-based compensation (including the Suncrest Stock Options and Suncrest Stock Awards) other than as expressly stated in Section 3.03, long-term incentive compensation, deferred compensation or any bonus or other incentive or deferred compensation,
(vii) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Employee Benefit Plan,
(viii) terminate the employment or services of any executive officer other than for cause,
(ix) enter into any collective bargaining or other agreement with a labor organization,
(x) forgive or issue any loans to any current or former officer, employee or director of Suncrest or its Subsidiaries,
(xi) make any Suncrest contributions to the Suncrest 401(k) Plan outside of the ordinary course of business and consistent with past practice;
(xii) hire any officer, employee or other service provider except in the ordinary course of business consistent with past practices, including as a result of vacancies arising on or after the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on date hereof.
(whether in cash, stock or other property)h) Knowingly take, or make any other distributions in respect ofomit to take, any action that would prevent or impede, or could reasonably be expected to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries Section 368(a) of the Company consistent with past practices);Code.
(e) neither the Company nor any of its Subsidiaries shall (i) grant (i) Incur or agree to guarantee any increase indebtedness for borrowed money, other than in any manner the compensation or benefits of any current or former director, officer or employee, except increases amounts and at maturities in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(eprovided further that the maturity period for any such indebtedness shall not exceed a period of ninety (90) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on days from the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any incurrence of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries such indebtedness or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, endorse or agree to guarantee, any such Indebtedness or Liabilities or otherwise as an accommodation become responsible for the obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries Person (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) the endorsement of the Company Disclosure Schedulechecks, the Company shall notcommercial paper, bankers acceptances and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures bank drafts in the ordinary course of business consistent with past practice).
(j) Enter into any new line of business or make any material change in any basic policies and practices disclosed with respect to pricing or risk profile of loans, deposits and services, liquidity management and cash flow planning, marketing, deposit origination, lending, budgeting, profit and tax planning, personnel practices or any other material aspect of Suncrest’s or its Subsidiaries’ business or operations, except as required by Law or requested by any Governmental Authority;
(i) Other than in accordance with the investment policies of Suncrest or any of its Subsidiaries in effect on the date hereof or in securities transactions as provided in (ii) below, make any investment either by contributions to capital, property transfers or purchase of any property or assets of any Person, (ii) 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 case with a remaining maturity at the time of purchase of one year or less, purchase or acquire securities of any type; or (iii) materially change the composition of the Investment Securities in its securities portfolio, including any changes in the credit quality or the duration of the Investment Securities; provided, however, that in the case of Investment Securities, Suncrest may purchase Investment Securities if, within two (2) Business Days after Suncrest requests in writing (which request shall describe in detail the investment securities to be purchased and the price thereof) that Parent consent to making of any such purchase, Parent has approved such request in writing (which consent will not be unreasonably withheld) or has not responded in writing to such request.
(l) Except as set forth in Section 5.01(j6.01(l) of the Company Suncrest Disclosure Schedule Schedule, enter into any settlement, compromise or similar agreement with respect to, any action, suit, claim, proceeding, order or investigation to which Suncrest or any of its Subsidiaries is or become a party after the date of this Agreement, which settlement, compromise, agreement or action, suit, claim, proceeding, order or investigation that is settled in an amount and for consideration not in excess of $50,000 individually or $100,000 in the aggregate and that would not (i) impose any material restriction on the business of the Surviving Corporation or (ii) create adverse precedent for claims that are reasonably likely to be material to it or its Subsidiaries taken as a whole.
(m) Other than as determined to be necessary or advisable by categorySuncrest in the good faith exercise of its discretion based on changes in market condition and subject in any event to clause (u) below of this Section 6.01, alter materially its interest rate or make any commitments pricing fee or fee pricing policies with respect to capital expenditures or other planned capital expenditures depository accounts of any of its Subsidiaries or, other than in the ordinary course of business consistent business, waive any material fees with past practices in excess of $500,000 in the aggregate;respect thereto.
(kn) the Company shall, and shall cause its Subsidiaries toExcept as required by applicable Law or by a Governmental Authority, (i) continue implement or adopt any material change in force insurance with good its interest rate and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practicesother risk management policies, procedures or practices or (ii) use reasonable best efforts not fail to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition follow in all material respects, subject Suncrest’s or its applicable Subsidiary’s existing policies or practices with respect to reasonable wear managing its exposure to interest rate and tear and subject other risk.
(o) Grant or commit to grant any new extension of credit to any casualty obligor (whether a new or condemnation existing relationship) (i) if such extension of credit would equal or exceed $1,000,000 if Suncrest’s aggregate relationship exposure to such obligor, including as a result of such extension, is at least $4,000,000; (ii) if such extension of credit is secured by commercial real estate and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, is for at least $2,000,000; (iii) if such extension is an SBA loan where Suncrest was identified through a non-bank referral or lender and is for at least $500,000 or (iv) pay, prior to the imposition if such extension of any Lien or material penalty all taxes, water credit is not secured by commercial real estate and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, for at least $1,000,000; in each case, as required consent shall be deemed granted if within three (3) Business Days of written notice delivered to Citizens’ Chief Credit Officer or his designee, notice of objection is not received by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its SubsidiariesSuncrest;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries Grant or commit to use their respective commercially reasonable efforts to, prevent the termination grant any renewal or modification of an existing extension of credit to any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend obligor if such extension of credit would equal or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually 3,000,000; in each case, consent shall be deemed granted if within three (3) Business Days of written notice delivered to Citizens’ Chief Credit Officer or $100,000 per annum for all such amendmentshis designee, modifications and supplements in the aggregate; andnotice of objection is not received by Suncrest;
(q) the Company shall notSell any real estate owned, and shall not permit charge-off any of its Subsidiaries toassets, agree make any compromises on debt, release any collateral on loans or commit to do any of the foregoing, if such sale, charge-off, compromise or release would exceed $100,000 in the aggregate (consent shall be deemed granted if within three (3) Business Days of written notice delivered to Citizens’ Chief Credit Officer or his designee, notice of objection is not received by Suncrest).
(r) Renew or commit to renew any extension of credit that would equal or exceed: (i) $250,000 if rated Substandard; or (ii) $500,000 if rated Special Mention; in each case consent shall be deemed granted if within two (2) Business Days of written notice delivered to Citizens’ Chief
Appears in 1 contract
Interim Operations. Except as (a) The Company shall, and shall cause each of its Subsidiaries to, until the earlier of the Effective Time and the termination of this Agreement pursuant to Article IX (unless (I) Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or delayed, (II) expressly contemplated or required by this Agreement or Agreement, applicable Law, (III) as set forth in Section 5.01 7.1(a) of the Company Disclosure Schedule or as consented (IV) with respect to actions taken or omitted by, or at the specific direction of, any Specified Person taken at the direction of BK or with BK’s consent (the exceptions set forth in writing by Parentthe foregoing clauses (I) – (IV), the Company covenants and agrees that during “Interim Covenant Exceptions”), use commercially reasonable efforts to conduct its business in the period from the date Ordinary Course of this Agreement Business and, to the Effective Time extent consistent therewith, shall use and cause each of its Subsidiaries to use their respective commercially reasonable efforts to (or until termination of this Agreement x) maintain, in accordance with Article 7 hereof):
(a) the business and operations of the Company all material respects, its and its Subsidiaries shall be conductedSubsidiaries’ relations and goodwill with Governmental Entities, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisersdistributors, distributors creditors, lessors, employees, consultants, agents and business associates and (y) keep available, in all material respects, the services of the employees and consultants of the Company and Subsidiaries. Without limiting the generality of and in furtherance of the foregoing sentence, at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier of the Effective Time and the termination of this Agreement pursuant to Article IX, except pursuant to any Interim Covenant Exception, the Company shall not (and shall cause its Subsidiaries not to):
(i) adopt any change in its Organizational Documents, other material third parties having business dealings with them and than immaterial amendments to preserve applicable organizational documents of the goodwill of their respective businessesCompany’s Wholly Owned Subsidiaries;
(bii) merge or consolidate with any other Person, or restructure, reorganize or completely or partially liquidate, in each case except for any such transactions solely among Wholly Owned Subsidiaries of the Company shall notCompany;
(iii) acquire, and shall not permit any directly or indirectly by merger, consolidation, acquisition of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell stock or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase assets or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any business, Person, properties (including real properties) or assets from any other securities Person with a fair market value or purchase price in excess of $5 million in the aggregate, in each case, including any securities convertible amounts or exercisable intovalue reasonably expected to be paid in connection with a future earn-out, purchase price adjustment, release of “holdback” or similar contingent payment obligation, or any rightsthat would reasonably be expected to prevent, warrants materially delay or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon materially impair the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests ability of the Company or any of its Subsidiaries to consummate the transactions contemplated by this Agreement by the Outside Date, other than acquisitions of inventory or assets, goods or properties in the Ordinary Course of Business;
(includingiv) transfer, without limitationsell, securities exchangeable forconvey, lease, sublease, license, pledge, mortgage, assign, divest, grant any option in, cancel or otherwise abandon or dispose of, or optionsincur, warrants, calls, commitments permit or rights suffer to exist the creation of any kind to acquireEncumbrance (other than Permitted Encumbrances) upon, capital stock any properties (including any Real Property) or assets (tangible or intangible, but other equity interests of the Company than Intellectual Property which is addressed in Section 7.1(a)(xx)), product lines or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security 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) as required by this Agreementsales of obsolete assets in the Ordinary Course of Business, (B) sales or other dispositions of franchises or dealer locations in the Ordinary Course of Business, (C) sales, leases, or other dispositions of assets (not including services) with a fair market value not in excess of $5 million in the aggregate in the Ordinary Course of Business and (D) sales of receivables in securitization or factoring transactions;
(v) issue, deliver, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or otherwise enter into any Contract 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 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 (A) the Voting Agreement or (B) the issuance of shares of such capital stock, other equity securities 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 Stock Plans in effect on the Capitalization Time;
(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 $2 million individually or $5 million in the aggregate, except for extensions of credit to customers in the Ordinary Course of Business;
(vii) declare, set aside, establish a record date for, 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 dividends (A) paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company and (B) dividends payable to the holders of Series A Preferred Shares, payable in cash in an amount not to exceed $1.875 per Series A Preferred Share annually, in accordance with the terms of the Certificate of Designation;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to do any of the foregoing, any of its capital stock, 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);
(ix) incur, assume, repurchase or prepay or guarantee or endorse or otherwise become responsible for any Indebtedness for borrowed money (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 of Business, (B) pursuant to Existing Indebtedness (including borrowings under the ABL Credit Agreement), (C) any refinancing, extension, renewal or replacement of any outstanding Indebtedness of the Company, in the case of this clause (C), that does not increase the principal amount of Indebtedness outstanding, (D) the incurrence of Indebtedness for borrowed money in the Ordinary Course of Business not to exceed $5 million in the aggregate in the case of this subclause (D), or (E) the renewal and refinancing of any Insurance Policies;
(x) make or authorize any payment of, or accrual or commitment for, capital expenditures, except to the extent set forth in the line items of the Company’s capital budget set forth in Section 5.01(b7.1(a)(x) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(cxi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement, other than any Material Contract permitted by Section 7.1(a)(ix)(C) and in the Company shall not Ordinary Course of Business;
(ixii) sellterminate, transfer fail to renew or pledgeamend or otherwise modify or waive or assign, convey, Encumber or agree otherwise transfer, in whole or in part, rights or interest pursuant to sell, transfer or pledgein, any equity interest owned Material Contract, other than expirations or non-renewals of any such Contract in the Ordinary Course of Business and in accordance with the terms of such Contract with no further action by it in the Company, any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries party to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stocksuch Contract;
(dxiii) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practicescancel, the Company shall not, and shall not permit modify or waive any of its Subsidiaries to, declare, set aside debts or pay any dividends on (whether in cash, stock claims held by or other 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 owed to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its SubsidiariesSubsidiaries except as canceled, modified, or (iii) except as set forth waived in Section 5.01(e) the Ordinary Course of Business not to exceed $1 million individually or $2 million in the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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 hereofaggregate;
(fxiv) the Company shall not, and shall not permit amend any of its Subsidiaries to, (xmaterial License contemplated by Section 5.5(b)(i) enter into in any new line of businessmaterial respect, or acquire allow any such material License to lapse, expire or agree terminate (except where the lapse, expiration or termination of any such License is with respect to acquirea License that has become obsolete, includingredundant or no longer required by applicable Law);
(xv) amend, without limitationmodify, by merging terminate, cancel or consolidating with, let lapse any Insurance Policy or purchasing the assets or capital stock or other equity interests of, or by fail to file any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent claims thereunder in a timely manner as required under such Insurance Policies;
(each an “Approved Acquisition”xvi) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized sell inventory outside of the United States Ordinary Course of Business or fail to order, maintain and its territorial possessionsmanage levels of inventory consistent with the levels ordered, maintained and managed by the Company in the Ordinary Course of Business;
(gxvii) the Company shall notsettle, and shall not permit pay, discharge or compromise any of its Subsidiaries to, (x) incur, assume, be responsible Proceeding for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets an amount in excess of $25,000 2 million individually or $50,000 4 million in the aggregate other than (i) pursuant to existing contracts and commitments described during any calendar year or on a basis that would result in Section 5.01(g) the imposition of any Order that would restrict the Company Disclosure Schedule, (ii) immaterial properties future activity or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization conduct of the Company or any of its Subsidiaries (other than or a finding or admission of a violation of Law or violation of the rights of any transaction specifically Person, or which would reasonably be expected to prevent, materially delay or materially impair the consummation of the transactions contemplated by this AgreementAgreement by the Outside Date;
(xviii) make any material changes with respect to financial accounting policies or procedures, except as required by changes in GAAP (as confirmed in writing by the Company’s independent registered public accounting advisor);
(ixix) except as set forth other than in Section 5.01(i) the Ordinary Course of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries toBusiness, (iA) make, change or revoke any material Tax election or change any material Tax accounting method, (B) file any material amended Tax Return, (C) enter into, cancel or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments closing agreement with respect to capital expenditures or other planned capital expenditures other than in the ordinary course a material amount of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries toTaxes, (iD) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or otherwise compromise any Tax claim, audit, assessment or liability relating dispute with respect to a material amount of Taxes, in the Company case of clause (C), (D) or any (E), for an amount materially in excess of its Subsidiariesthe amount reserved for Taxes on the financial statements of the Company, or (E) surrender any right to claim a refund with respect to a material amount of Taxes, except as set forth in Section 5.01(o(F) of the Company Disclosure Schedulerequest any material ruling with respect to Taxes, consent (G) agree to any an extension or waiver of the limitation period applicable statute of limitations with respect to any material Taxes (in each case, other than in connection with extensions of time to file Tax claim Returns that are automatic or assessment relating automatically granted or otherwise constitute ordinary course extensions), or (H) enter into any material Tax indemnification, sharing, allocation or similar agreement or arrangement (other than customary provisions under any commercial, leasing, financing, employment or other agreement entered into in the ordinary course of business no principal purpose of which relates to Taxes);
(xx) transfer, sell, lease, license or otherwise dispose of, grant a covenant not to sue or other right under, abandon, cancel or allow to lapse or expire any Company Intellectual Property, other than (A) non-exclusive licenses granted in the Ordinary Course of Business, or (B) abandonments, cancellation, lapses or expiry of Company Intellectual Property that is not material to the Company Company’s or any of its Subsidiaries’ respective businesses.
(xxi) except as required by applicable Law or pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement, (A) materially increase in any manner the cash compensation or consulting fees, bonus opportunity, severance or termination pay of any current or former Company Employee, except for (1) in respect of those Company Employees who are not officers, increases in annual salary, wage rate or consulting fees in the Ordinary Course of Business that do not exceed four percent (4%) in the aggregate, and any consequent increases in severance or termination pay, and (2) in respect of all Company Employees, the payment of annual bonuses for completed periods based on actual performance, if applicable, in the Ordinary Course of Business, (B) become a party to, establish, adopt, amend, commence participation in or terminate any material Company Benefit Plan, except for renewals in the Ordinary Course of Business, (C) grant any new equity-based awards, or take amend or modify the terms of any other similar actionoutstanding equity-based awards, or omit to under any Stock Plan, (D) take any action relating to accelerate the filing vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Stock Plan, except as contemplated under the terms of this Agreement, (E) 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 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, (F) forgive any loans or issue any loans to any current or former Company Employee (other than routine travel and other expense advances issued in the Ordinary Course of Business), (G) hire any Company Employee above the level of Vice President (as such term is used to reflect corporate Vice Presidents); or (H) terminate without cause the employment of any Tax Return or Company Employee above the payment level of any Tax, if Vice President (as such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiariesterm is used to reflect corporate Vice Presidents);
(pxxii) the Company shall (i) use its commercially reasonable efforts become a party to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts toestablish, prevent the termination of any Contract with any Significant Customeradopt, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify commence participation in or supplement, terminate any Lease collective bargaining agreement or other Material Contract under which the costs similar agreement with a labor union, labor organization, works council or obligations of the Company or any of its Subsidiaries resulting from such amendmentsimilar organization, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum except for all such amendments, modifications and supplements renewals in the aggregateOrdinary Course of Business; andor
(qxxiii) the Company shall notagree, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
(b) 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 the Parent’s or its Subsidiaries’ operations prior to the Effective Time.
Appears in 1 contract
Interim Operations. (a) Except (i) as otherwise expressly contemplated or required by this Agreement Agreement, (ii) as required by applicable Law, (iii) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned), (iv) as set forth in on Section 5.01 6.1(a) of the Company Disclosure Schedule or as consented (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 writing by Parentreliance on this clause (v), to the extent permitted under applicable Law and practicable under the circumstances, the Company covenants shall provide prior notice to and agrees that during the period consult in good faith with Parent prior to taking such action), from the date of this Agreement until the earlier to occur of the Effective Time (or until termination of this Agreement in accordance with pursuant to Article 7 hereof):
(a) VIII and the business and operations of Effective Time, the Company will, and will cause its Subsidiaries shall be conductedto, use its and the books and records of the Company and its Subsidiaries shall be maintained, only their reasonable best efforts to (A) conduct their businesses in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to (B) preserve intact their current business organizations, keep available the services of their current officers organizations and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other Persons with which it has material third parties having business dealings with them and to preserve remain in material compliance with all of its obligations under, and to not allow an event of default to occur under, the goodwill Loan Agreement; provided that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of their respective businesses;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 or required 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(b) 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 shall not permit any of will cause its Subsidiaries not to, :
(i) authorize for issuance, issue, deliver, sell (x) adopt any change in the certificate of incorporation or agree bylaws of the Company or commit to issue, sell or deliver (whether through y) adopt any change in the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock comparable organizational document of any of its the Company’s Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; ;
(ii) repurchase, redeem merge or otherwise acquire any shares of the capital stock or other equity interests of consolidate the Company or any of its Subsidiaries (including, without limitation, securities exchangeable forwith any other Person, or optionsrestructure, warrantsreorganize, calls, commitments recapitalize or rights of any kind to acquire, capital stock completely or other equity interests of partially liquidate or dissolve the Company or any of its Subsidiaries); or ;
(iii) amendissue, modify sell, pledge, dispose of or waive encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any term shares of any outstanding security capital stock of the Company or any of its Subsidiaries, except 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) as required by this Agreementany such transaction solely among the Company and its wholly owned 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 set forth of the date of this Agreement in Section 5.01(baccordance with their terms or issuance of Company Equity Awards upon the recommendation of the Compensation and Talent Committee, (C) incurrence of any Permitted Liens or (D) accrual of dividends on the Series B Shares pursuant to the terms thereof;
(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, (B) operating leases and extensions of credit terms to customers in each case in the ordinary course of business consistent with past practice and (C) advances of reimbursable expenses to any director or officer of the Company Disclosure Schedule, or its Subsidiaries in connection with accelerating advancement obligations in effect on the vesting schedules date of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansthis Agreement);
(cv) the Company shall not (i) selldeclare, transfer set aside, make or pledgepay any dividend or other distribution, payable in cash, stock, property or agree otherwise with respect to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries capital stock, except for (A) dividends or alter through merger, liquidation, reorganization, restructuring other distributions paid by any wholly owned Subsidiary of the Company to the Company or in to any other fashion wholly owned Subsidiary of the corporate structure Company and (B) dividends on the Series B Shares pursuant to the terms thereof;
(vi) reclassify, split, combine, subdivide or ownership of any of its Subsidiariesredeem, (ii) amend purchase, repurchase or otherwise change its certificate of incorporation acquire, directly or bylaws or permit any of its Subsidiaries to amend its articles of incorporationindirectly, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine stock or reclassify securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any of its capital stock (except for dividends paid (A) any such transaction by direct or indirect a wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries Subsidiary of the Company consistent with past practiceswhich remains wholly owned thereafter, (B) acquisitions of Shares upon the vesting or sale thereof in satisfaction of withholding obligations in respect of Company Equity Awards to the extent expressly required by the terms of such Company Equity Awards, or (C) payment of the exercise price in respect of Company Stock 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);
(evii) neither create, incur, assume or guarantee any Indebtedness of the type described in clauses (a) and (b) of the definition of “Indebtedness”, except for (A) borrowings in the ordinary course of business under the Loan Agreement that do not exceed $1 million individually or in the aggregate, (B) guarantees or credit support provided by the Company nor or any of its Subsidiaries shall of the obligations of the Company or any of its Subsidiaries in the ordinary course of business to the extent such Indebtedness is in existence on the date of this Agreement or incurred in compliance with clause (iA) grant of this Section 6.1(b)(vii) and does not violate any other Contract of the Company, including the Loan Agreement, and (C) any Indebtedness solely among the Company and its wholly-owned Subsidiaries or agree among the Company’s wholly-owned Subsidiaries;
(viii) incur or commit to any increase in any manner the compensation capital expenditure or benefits of any current or former director, officer or employeeexpenditures, except increases capital expenditures (w) reflected in the 2023 operating budget of the Company or (x) of less than $1 million individually or $5 million in the aggregate;
(ix) other than in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (iiA) enter into any new Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement, or materially amend (B) amend, modify or waive in any existing Contractmaterial respect or terminate any Material Contract (or any material rights thereunder) in a manner adverse to the Company (other than expirations or termination for cause of any such Contract in accordance with its terms);
(x) make any material changes with respect to financial accounting policies or procedures, transactionexcept as required by Law, commitment proposed Law or arrangement by U.S. GAAP or official interpretations with respect thereto or by any current Governmental Authority or former directorquasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(xi) settle, officerpay, employee satisfy, discharge, release, waive or affiliate compromise any Action for an amount in excess of $5 million individually or $10 million in the aggregate other than (A) any settlement or compromise where the amount paid or to be paid by the Company or any of its Subsidiaries, Subsidiaries is fully covered by insurance coverage or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, retention amounts maintained by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” Subsidiaries and (B) settlements or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect compromises of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets Action for an amount not materially in excess of $25,000 individually the amount, if any, reflected or $50,000 specifically reserved in the aggregate other than balance sheet (i) pursuant to existing contracts and commitments described in Section 5.01(gor the notes thereto) of the Company Disclosure Scheduleincluded in the Company Reports (with materiality measured relative to the amount so reflected or reserved, (ii) immaterial properties or assets (or immaterial portions if any); provided that, in the case of properties or assets described in Section 5.01(g) each of the Company Disclosure Scheduleforegoing clauses (A) and (B), the settlement or compromise of such Action does not (iiix) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than impose any non-taxable transfers by de minimis restriction on the business or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization operations of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company Parent or any of its Subsidiaries shall have after the Closing) and (y) include any non-de minimis non-monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)or injunctive relief, or (ii) waivethe admission of wrongdoing, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries or any of their respective officers or directors;
(xii) assign, transfer, sell, lease, license, exchange, swap, encumber or subject to any Lien (other than Permitted Liens), abandon, permit to lapse, or otherwise dispose of any material assets or property (including any capital stock of any Subsidiaries of the Company and any material Owned Intellectual Property) except (A) pursuant to existing contracts or commitments in effect prior to the execution of this Agreement (or refinancings thereof), (B) transactions solely among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, or (C) in the ordinary course of business;
(xiii) except for such actions required by the terms of Company Plans, in each case, as of in effect on the date hereof: (A) increase the compensation or other benefits payable or provided to the Company’s or its Subsidiaries’ current or former employees, officers, directors, independent contractors or other individual service providers, except in the ordinary course of business; (B) increase or accelerate or commit to accelerate the funding, payment or vesting of compensation or benefits provided under any Company 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, modify, terminate or amend any labor agreement or Company Plan (or any plan, program, agreement or arrangement that would be a Company Plan if in effect on the date hereof); (E) recognize or certify any labor union, labor organization, works council, or group of employees as may be required as a result the bargaining representative of a change in applicable Law any employees of the Company or in GAAP;
its Subsidiaries or (nF) hire or terminate (other than for cause) the employment of any employee of the Company shall not, and shall not permit or any of its Subsidiaries to, take, whose total annual base compensation exceeds (or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omitwould exceed) $200,000;
(xiv) acquire, or agree to omitacquire, to take any action necessary to prevent business, assets that constitute a business or capital stock of any such representation Person or warranty 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 being inaccurate in any material respect at any such time vendors or to prevent any such condition from not being satisfied;
(o) suppliers of the Company shall not, and shall not permit or any of its Subsidiaries toin the ordinary course of business, make or enter into any material joint venture, partnership or similar arrangement with any Person;
(xv) implement or announce any permanent plant closings or permanent facility shutdown that would implicate the Worker Adjustment and Retraining Notification Act of 1988;
(xvi) (A) make, change or revoke any Tax election; (B) change any material tax election or change an annual Tax accounting period with respect to Taxesor method of Tax accounting, (C) file any amended Tax Return, enter into any closing agreement, (D) settle or compromise any Tax claimmaterial claim related to Taxes, assessment or liability relating to the Company or (E) enter into any of its Subsidiariesmaterial closing agreement, or (F) surrender any right to claim a refund of Taxesmaterial Tax refund, except as set forth offset or other reduction in Section 5.01(oliability, (G) of the Company Disclosure Schedule, request or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating assessment, (H) fail to pay any material Tax the Company becomes due and payable (including estimated tax payments), (I) incur any material liability for Taxes (other than in the ordinary course of business) or (J) request any ruling or similar guidance from any Taxing Authority in respect of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its SubsidiariesTaxes;
(pxvii) the Company shall (i) use its commercially reasonable efforts togrant any material refunds, and shall cause its Subsidiaries credits, rebates or other allowances to use their respective commercially reasonable efforts toany end user, prevent the termination of any Contract with any Significant Customercustomer, (ii) notreseller or distributor, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, in each case other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregateordinary course of business; andor
(qxviii) the Company shall notagree, and shall not permit any of its Subsidiaries to, 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 the terms and conditions of this Agreement, including the restrictions set forth above, complete control and supervision over its and its Subsidiaries’ respective operations.
(d) Subject to the terms of this Agreement, including Section 6.5, from the date of this Agreement until the Effective Time, Parent and Merger Sub shall not, and shall cause their respective Affiliates not to (including, for the avoidance of doubt, through the Equity Financing and use of negative control rights where available), directly or indirectly, invest in or acquire, or agree to invest in or acquire, including by merging or consolidating with, or by purchasing 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 a Specified Acquisition would reasonably be expected 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 obtain, 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 contemplated by this Agreement, including the Merger.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement Prior to the Effective Time (or until termination of this Agreement Time, unless Parent has otherwise consented in accordance with Article 7 hereof):writing thereto, the Company:
(ai) the business shall, and operations shall cause each of its Subsidiaries and each of the Company Investment Companies to, conduct its operations according to their usual, regular and ordinary course in substantially the same manner as heretofore conducted;
(ii) shall use its Subsidiaries shall be conductedreasonable best efforts, and the books shall cause each of its Material Subsidiaries and records each of the Company and Investment Companies to use its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts efforts, to preserve intact their current business organizationsorganizations and goodwill, keep available the services of their current respective officers and employees and preserve their maintain satisfactory relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties those persons having business dealings relationships with them and to preserve the goodwill of their respective businessesthem;
(biii) shall not, and shall cause its Material Subsidiaries not to, amend their respective Certificates of Incorporation or Bylaws or comparable governing instruments;
(iv) shall, and shall cause each of the Investment Companies to, promptly notify Parent of (x) any Company Material Adverse Effect, (y) any litigation matter relating to an amount in excess of $500,000, governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or (z) any material breach of any representation or warranty contained herein;
(v) shall, upon receiving any written notice from any Taxing authority proposing any adjustment to any Tax relating to the Company or any of its Subsidiaries, give prompt written notice thereof to Parent, which notice shall describe in detail each proposed adjustment;
(vi) shall 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;
(vii) shall not, and shall not permit any of its Subsidiaries to, authorize, propose or announce an intention to authorize or propose, or enter into an agreement with respect to, any merger, consolidation or business combination (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through other than the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwiseMerger), pledge any acquisition of assets or otherwise encumber securities other than in the ordinary course of business, any shares disposition of its capital stock assets or securities other than in the capital stock ordinary course of business or any release or relinquishment of any material contract rights other than in the ordinary course of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansbusiness;
(cviii) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay issue any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, any shares of its capital stock (or securities convertible into or exchangeable or exercisable for shares of its capital stock, except for dividends paid by direct upon exercise of options outstanding on the date of this Agreement under the Company Stock Option Plans or indirect wholly owned Subsidiaries granted pursuant to the Company or to other wholly owned Subsidiaries terms of the Stock Option Agreement to purchase shares of Company consistent Common Stock, or effect any stock split, reverse stock split, stock dividend, subdivision, reclassification, combination, exchange, or other similar transaction with past practices)respect to any shares of its capital stock or other ownership interests, or otherwise change its capitalization;
(eix) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its 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 its Subsidiaries;
(x) enter into shall not, and shall not permit any new line of businessits Subsidiaries to, take or fail to take any actions which would, or acquire would be reasonably likely to, prevent the Merger from qualifying as a reorganization with the meaning of Section 368(a) of the Code;
(xi) except pursuant to (i) applicable law, (ii) the terms of pre-existing contractual arrangements or agree to acquirepolicies or (iii) the ordinary course of business consistent with past practice, shall not, and shall not permit any of its Subsidiaries to, amend the terms of any Company Plan, including, without limitation, by merging any employment, severance or consolidating withsimilar agreements or arrangements in existence on the date hereof, or purchasing the assets adopt any new employee compensation or capital stock benefit plans, programs or other equity interests ofarrangements or any employment, severance or similar agreements or arrangements, or by change in any other mannerrespect any vesting schedule with respect to any Company Plan or grant or award thereunder, or grant any business salary increases to any employee of the Company or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionsSubsidiary;
(gxii) except in the Company ordinary course consistent with past practice, shall not, and shall not permit any of its Subsidiaries to, (x) incur, create, assume or otherwise become liable for borrowed money or assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, endorse or agree to guarantee, any such Indebtedness otherwise become responsible or Liabilities or liable for the obligations of another personany other individual, issue 32 37 corporation or sellother entity, (y) make any loans or agree advances to issue any other person or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or (z) subject any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” property or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose ofassets, or agree to sell, lease or subject to any Lien or otherwise dispose of, permit any of its properties property or assets in excess to be subjected, to any lien, claim or encumbrance of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiariesany kind;
(hxiii) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (ix) enter intochange any practice with respect to Taxes, (y) make, revoke or materially amend, modify or supplement change any Contract outside the ordinary course of business consistent election with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company respect to comply with its obligations hereunder), Taxes or (iiz) waive, release, grant, assign, modify settle or transfer compromise any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise)Tax liability;
(jxiv) the shall not (y) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock (other than regular quarterly cash dividends payable on Company Common Stock in an amount not to exceed $0.06 per share) or other ownership interests or (z) redeem, purchase or otherwise acquire any shares of its capital stock, or make any commitment for any such action;
(xv) shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, exceptagree, in each casewriting or otherwise, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change to take any of the accounting policies, practices foregoing actions or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, take any action that would, or is reasonably likely to, which would make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, 3 hereof untrue or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoingincorrect.
Appears in 1 contract
Sources: Merger Agreement (Mony Group Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, Except (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (Bii) as required by applicable Law, (iii) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned), (iv) as set forth in on Section 5.01(b6.1(a) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options or (v) to the extent required by necessary to comply with the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as obligations set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under to which the Company or any of its Subsidiaries shall have monetary obligations is a party in excess effect on the date of $25,000 (except as may be necessary for 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 to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall notwill, and shall not permit any of will cause its Subsidiaries to, authorize or make any capital expenditures (other than pursuant use its and their reasonable best efforts to commitments prior to the date hereof or other planned capital expenditures conduct their businesses in the ordinary course of business and, to the extent consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) therewith, the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good use its and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use their reasonable best efforts to preserve their business organizations intact and to maintain existing relationships with customers, suppliers, distributors, licensors, licensees and other Persons having material business relationships with it.
(b) Except as required or expressly contemplated by this Agreement, (w) as required by applicable Law, (x) as approved in writing by Parent (such approval not to permit any insurance policy naming it as beneficiary be unreasonably withheld, delayed or loss payable payee to be canceled or terminatedconditioned), (iiiy) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in on Section 5.01(l6.1(b) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (iiz) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating the extent necessary to any labor union which is different comply with the obligations set forth in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by Material Contract to which the Company or any of its Subsidiaries as is a party in effect on the date of this Agreement, from the date of this Agreement until earlier to occur of the date hereoftermination of this Agreement pursuant to Article VIII and the Effective Time, except as may be required as a result of a the Company will not, and will cause its Subsidiaries not to:
(i) amend or adopt any change in applicable Law the Organizational Documents of the Company or in GAAPits Subsidiaries;
(nii) the Company shall not, and shall not permit any of its Subsidiaries to, take, merge or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to consolidate the Company or any of its SubsidiariesSubsidiaries with any other Person, or surrender restructure, reorganize or completely or partially liquidate or otherwise enter into any right to claim a refund of Taxesagreement or arrangement imposing material changes or restrictions on the assets, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension operations or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit business of the Company or any of its Subsidiaries;
(piii) issue, grant, sell, pledge, dispose of or encumber, or authorize the issuance, grant, sale, pledge, disposition or encumbrance of, any shares of capital stock of the Company shall (i) use or any of its commercially reasonable efforts toSubsidiaries, and shall cause its Subsidiaries to use their respective commercially reasonable efforts toor securities convertible or exchangeable into or exercisable for any shares of such capital stock, prevent the termination or any options, warrants, restricted shares, restricted share units, performance share units, stock appreciation rights, phantom stock or other rights of any Contract with kind to acquire any Significant Customershares of such capital stock or such convertible or exchangeable securities, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customerin 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 terms substantially equivalent tothe date hereof, and (B) incurrence of any Permitted Liens;
(iv) make any loans, advances or more beneficial on balance 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 Subsidiaries, and (B) in connection with capital leases and extensions of credit terms to customers in each case in the ordinary course of business);
(v) other than the July 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 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 of its capital stock or 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 thanin the ordinary course of business, (C) any Indebtedness among the terms 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 making date of such amendment this Agreement or modification, and (iiiB) not, and shall cause its Subsidiaries not to, enter into, amend or materially amend, modify or supplement, terminate any Lease or other Material Contract under which in a manner adverse to the costs Company (other than expirations of any such Material Contract in accordance with its terms) or obligations otherwise waive, release or assign any material rights, claims or benefits of the Company or any of its Subsidiaries resulting from such amendmentunder 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), modification except as required by Law or supplement would exceed 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 $25,000 per annum 500,000 individually or $100,000 per annum 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 (i) 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 all 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 amendments(x) in the ordinary course of business or (y) pursuant to any Material Contract existing as of the date of this Agreement or (C) when in the Company’s reasonable business judgment, modifications 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: (A) increase the amount or accelerate the vesting, payment or funding of the compensation or other benefits payable or provided to the Company’s or any of its Subsidiaries’ current or former officers, directors, individual service providers or employees, other than increases in compensation or benefits in the ordinary course of business with respect to employees at the level of Vice President or below and supplements not exceeding a year-over-year increase of 3% in the aggregate; and(B) grant or enter into any cash or equity or equity-based incentive, bonus, employment, change of control, severance or retention agreement with any current or former officer, director, individual service provider or employee of the Company or any of its Subsidiaries; (C) establish, adopt, enter into or amend any collective bargaining agreement, Benefit Plan or arrangement that would be a Benefit Plan if in effect on the date of this Agreement; or (D) accelerate the vesting, funding or payment of any compensatory arrangement;
(qxv) negotiate or enter into any Labor Agreement or recognize or certify any labor union, labor organization, works council or group of employees as the bargaining representatives for any employees of the Company shall notor any of its Subsidiaries;
(xvi) acquire any capital stock in, or any business line or all or a material portion of the assets constituting any business, corporation, partnership, association, joint venture, or other entity or other business organization in any transaction 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 shall not permit 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;
(xvii) other than in the ordinary course of business, 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 (other than any extension pursuant to an extension to file any Tax Return obtained in the ordinary course of business), enter into any material closing agreement, enter into a 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 claim a material (x) Tax refund, (y) offset or (z) other reduction in Tax liability;
(xviii) license, escrow, or otherwise grant any rights to, any material Owned Source Code or disclose any material trade secrets owned or processed by the Company or any of its Subsidiaries to(except to customers or service providers of, agree or Persons with professional, business or commercial relationships with, the Company or its Subsidiaries in the ordinary course of business subject to confidentiality obligations);
(xix) 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 Merger and any other transactions contemplated by this Agreement from qualifying for the Intended Tax Treatment; or
(xxii) agree, authorize or commit to do any of the foregoing.
(c) Subject to the terms of this Agreement, including Section 6.5 and Section 6.13, after the date of this Agreement and prior to the Effective Time, none of Parent, Merger Sub, the Rollover Stockholders or the Equity Investors shall take or permit any of their respective Subsidiaries to enter into or agree to enter into any agreement that would reasonably be expected to prevent, materially impair or materially delay the consummation of the Merger or the satisfaction of any of the closing conditions thereto.
(d) 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 and its Subsidiaries prior to the 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.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the Wax Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld, conditioned or until termination of this Agreement delayed, and except as (1) required by applicable Law, (2) expressly required by the Transaction Documents (including in accordance connection with Article 7 hereof):
the Separation and the Distribution or as contemplated by the Final Step Plan) or (a3) the business and operations otherwise expressly disclosed in Section 5.01(a) of the Company and its Subsidiaries shall be conductedDisclosure Letter), and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall notshall, and shall not permit any cause each of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit use its reasonable best efforts to issue, sell or deliver (whether through conduct the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases Retained Business in the ordinary course of business consistent with past practice, increases and bonuses 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 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 under existing employment agreements, bonus plans by the Transaction Documents (including in connection with the Separation and other agreements and arrangements listed the Distribution) or described (3) otherwise expressly disclosed in Section 5.01(e5.01(b) of the Company Disclosure Schedule 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 connection with accelerating the vesting schedules 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 Options and terminating Company that would not prevent, delay or impair the Options and Wax Merger or the Stock Plansother Transactions), (iiB) 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 new 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 existing Contractmaterial Company Plan or amend the terms of any outstanding equity-based awards other than any such action taken for purposes of replacing, transactionrenewing 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, commitment (B) grant or arrangement with provide any current transaction or former retention bonuses to any director, officer, employee or affiliate other service provider of the Company or any of its Subsidiaries, (C) increase the compensation, bonus or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedulepension, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan welfare or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit benefits of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets except in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures (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 planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries tobenefits prior to such change, (iD) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with increase the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary severance or loss termination payments or benefits payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty director, officer, employee or condemnation and Permitted Liens, subject to the expiration other service provider of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o(E) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to accelerate the filing vesting or payment of compensation or benefits under any Tax Return 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 payment of basis on which such contributions are determined or (G) forgive any Taxloans to directors, if such election, adoption, change, amendment, agreement, settlement, surrender, consent officers or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit employees of the Company or any of its Subsidiaries;
(piv) incur any Indebtedness or issue any warrants or other rights to acquire any Indebtedness, except (A) in the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries ordinary course of business consistent with past practice in a principal amount not to use their respective commercially reasonable efforts to, prevent exceed $400,000,000 in the termination of aggregate at any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend time outstanding on prevailing market terms or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, consistent with or more beneficial on balance 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 its Subsidiaries thanthe 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 terms of such Contract prior to Separation Agreement shall provide that SpinCo shall assume the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from with respect to such Indebtedness (and Holdco, Parent and 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, modification refinancing or supplement would 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 $25,000 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 annum 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 $100,000 per annum for all such amendments, modifications and supplements 200,000,000 in the aggregateaggregate 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); and
(q) provided that neither the Company shall not, and shall not permit nor any of its Retained Subsidiaries shall enter into any such transaction that would, or would reasonably be expected to, agree prevent, materially delay or commit to do any materially impair the consummation of the foregoing.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 (including s
Appears in 1 contract
Sources: Amended and Restated Agreement and Plan of Merger (New Fox, Inc.)
Interim Operations. Except (a) The Company shall, and shall cause each of its Subsidiaries to, 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 contemplated expressly required by this Agreement or as set forth required by a Governmental Entity or applicable Law and any Material Contract in Section 5.01 of the Company Disclosure Schedule or as consented effect prior to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement Agreement), conduct its business in the Ordinary Course of Business and, to the Effective Time (or until termination extent consistent therewith, shall use and cause each of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company its Subsidiaries to use their respective commercially reasonable efforts to maintain its and its Subsidiaries shall be conductedSubsidiaries’ relations and goodwill with Governmental Entities, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisersdistributors, distributors creditors, lessors, employees, agents and other material third parties having business dealings with them and associates; provided that, during any period of full or partial suspension of operations in response to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities COVID-19 or any securities convertible or exercisable intoCOVID-19 Measures, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (includingmay, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind in response to acquire, capital stock or other equity interests of the Company COVID-19 or any of its Subsidiaries); or (iii) amendCOVID-19 Measures, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) take such actions as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, are reasonably necessary (x) enter into any new line to protect the health and safety of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or ’ employees and other agreement to maintain any financial statement condition of another person or enter into any arrangement individuals having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance business dealings with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries or (other than y) to respond to third-party supply or service disruptions caused by COVID-19 or any transaction specifically contemplated COVID-19 Measures, in each case of clause (x) and (y), subject to reasonable prior consultation with Parent to the extent reasonably practicable. Without limiting the generality of and in furtherance of the foregoing sentence, from the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article IX, except as otherwise expressly required by this Agreement);
, as required by a Governmental Entity or applicable Law, as approved in writing by Parent (isuch approval not to be unreasonably conditioned, withheld or delayed) except as or set forth in the corresponding subsection of Section 5.01(i7.1(a) of the Company Disclosure Schedule, the Company shall not, not and shall 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 toSubsidiaries, including capital stock or other equity interests of any of its Subsidiaries, except in connection with (A) sales of obsolete assets, (iB) nonexclusive licenses granted by the Company or its Subsidiaries with respect to Intellectual Property Rights in the Ordinary Course of Business and (C) sales of inventory or other goods in the 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 (A) proxies or voting agreements solicited by or on behalf of the Company in connection with the Company’s annual meeting of stockholders 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 to 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, as applicable, the Stock Plans in effect on the Capitalization Date);
(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) 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 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 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 (but under no circumstances in an amount that exceeds $0.175 per Share per calendar quarter);
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, 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);
(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 accrual or commitment for, capital expenditures in excess of $250,000 in the aggregate, except to the extent set forth in the Company’s capital budget set forth in Section 7.1(a)(x) of the Company Disclosure Schedule;
(xi) enter intointo 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 the 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 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 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 Ordinary Course of Business and in accordance with the terms of such Contract with no further action by the Company or any of its Subsidiaries, except for any ministerial actions, or non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other rights under Intellectual Property Rights owned or purported to be owned by the Company or any of its Subsidiaries, in each case, that are granted in the Ordinary Course of Business;
(xiii) cancel, modify or supplement waive any Contract outside the ordinary course of business consistent with past practice under which debts or similar claims held by the Company or any of its Subsidiaries shall have monetary obligations having in each case a value in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 100 thousand in the aggregate;
(kxiv) 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 Company shalllapse, and shall cause its Subsidiaries toexpiration or termination of any such License is with respect to a License that has become obsolete, (i) continue in force insurance with good and responsible insurance companies adequately covering risks redundant or no longer required by applicable Law or for the operation of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithbusiness);
(lxv) for the avoidance of doubt, except as set forth 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 5.01(l262 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 Disclosure Schedule, and its Subsidiaries or (B) involve any criminal liability or any admission of material wrongdoing or any material wrongful conduct by the Company shall not, and shall not permit or any of its Subsidiaries to, Subsidiaries;
(ixvii) materially amend make any currently existing labor changes with respect to accounting policies or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitmentprocedures, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or changes in GAAP;
(nxviii) the Company shall notmake, and shall not permit any of its Subsidiaries to, take, change or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in revoke any material respect atTax election, change an annual U.S. Federal Income or as of any time prior toother material Tax accounting period, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make adopt or change any material tax election or change an annual Tax accounting period with respect to Taxesmethod, file any amended Tax Return, enter into any closing agreementagreement with respect to material Taxes, settle or compromise any material Tax claim, audit, assessment or liability relating to the Company or any of its Subsidiariesdispute, or surrender any right to claim a refund of a material amount of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent or agree to any an extension or waiver of the limitation period applicable to any Tax claim or assessment relating statute of limitations with respect to the Company assessment or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing determination of any Tax Return or the payment of any material Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(pxix) the Company shall (i) use its commercially reasonable efforts tocancel, and shall cause its Subsidiaries abandon or otherwise allow to use their respective commercially reasonable efforts to, prevent the termination of lapse or expire any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to Intellectual Property Rights that are owned by the Company or any of its Subsidiaries thanand 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 such Contract 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 making 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 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) 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 change the manner in which contributions to such amendment plans are made or modificationthe basis on which such contributions are determined, except as may be required by GAAP, (F) forgive any loans or issue any loans to any Company Employee (other than routine travel advances issued in the Ordinary Course of Business and those loans, advances, guarantees or capital contributions expressly permitted by Section 7.1(a)(vi)), (iiiG) not, and shall cause its Subsidiaries not 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 or (H) terminate the employment of any executive officer other than for cause;
(xxi) become a party to, enter intoestablish, or materially adopt, amend, modify commence participation in or supplement, terminate any Lease collective bargaining agreement or other Material Contract under which the costs agreement with a labor union, labor organization, works council or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregatesimilar organization; andor
(qxxii) the Company shall notagree, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
(b) 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 the Parent’s or Merger Sub’s operations prior to the Effective Time.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Cards Acquisition Inc.)
Interim Operations. (a) Except as otherwise contemplated (i) required by this Agreement Agreement, (ii) required by applicable Law, (iii) approved in writing by Parent (such approval not to be unreasonably withheld, delayed or as conditioned) or (iv) set forth in on Section 5.01 6.1(a) of the Company Disclosure Schedule or as consented to in writing by ParentSchedule, the Company covenants and agrees that during the period 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 Effective Time extent consistent therewith, the Company shall, and shall cause its Subsidiaries to, use its and their reasonable best efforts to preserve their business organizations intact (including the 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 until termination 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 in accordance with Article 7 hereof):until the Effective Time, the Company will not, and will cause its Subsidiaries not to:
(ai) (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 operations business of the Company and its Subsidiaries shall taken as a whole that would be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts adverse to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit Parent or any of its Subsidiaries toor (y) restructure, (i) authorize for issuance, issue, deliver, sell reorganize or agree completely or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge partially liquidate or otherwise encumber enter into any shares of its capital stock agreement or arrangement imposing, individually or in the capital stock of any of its Subsidiariesaggregate, any other securities changes or any securities convertible restrictions on the assets, operations or exercisable intobusiness or on the assets, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests operations and business of the Company or any of its Subsidiaries that would be adverse to Parent or any of its Subsidiaries;
(includingiii) acquire (by merger, without limitationconsolidation, securities exchangeable foracquisition 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 Disclosure Schedule, or options(D) any other acquisitions for consideration that are not in excess of $5,000,000 in the aggregate;
(iv) issue, warrantssell, callspledge, commitments dispose of, grant, transfer, encumber, or rights 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 any kind to acquire, capital stock or other equity interests 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 wholly-owned Subsidiaries or among the Company's wholly-owned Subsidiaries that would not be adverse to Parent or any of its Subsidiaries, or (iiiB) amendany issuance, modify sale, grant or waive transfer of Shares pursuant to (1) the exercise or settlement of Company Options or Company RSU Awards outstanding as of the date of this Agreement or granted after the date of this Agreement not in violation of this Agreement or (2) the grant of Company Restricted Share Awards after the date of this Agreement not in violation of this Agreement;
(v) make any term loans, advances or capital contributions to any Person (other than (A) to the Company or any of its wholly-owned Subsidiaries, (B) pursuant to any Contract described in clause (F) of the definition of a "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, 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 wholly-owned Subsidiary of the Company to the Company or to any other wholly-owned Subsidiary of the Company and (B) regular quarterly dividends to shareholders of the Company by the Company in an amount not to exceed $0.18 per Share, in each case declared and paid at such times as is consistent with historical practice over the most recent fiscal year ended prior to the date of this Agreement);
(vii) 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 (except for (A) any such transaction by a wholly-owned Subsidiary of the Company that would not be adverse to Parent or any of its Subsidiaries and (B) acquisitions of Shares in satisfaction of withholding obligations in respect of Company Options, Company Restricted Share Awards or Company RSU 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);
(viii) create, incur, assume, guarantee, endorse, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money, 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 (A) as required by this Agreementindebtedness for borrowed money in an amount not to exceed $10,000,000 in the aggregate that is (1) on terms not materially less favorable in the aggregate than the Company's existing indebtedness or (2) prepayable at any time at par (plus customary floating rate breakage costs, if applicable), (B) as set forth in Section 5.01(b) guarantees of indebtedness of the Company Disclosure Scheduleor any of its wholly-owned Subsidiaries, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) intercompany indebtedness between or among the Company and/or any of its wholly-owned Subsidiaries and (D) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any financing of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases accounts payable in the ordinary course of business consistent with past practice, increases ;
(ix) other than in accordance with the Company's capital expenditure budget made available to Parent prior to the date of this Agreement and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required incur or commit to comply with applicable Law and as provided any capital expenditure or otherwise contemplated expenditures, except capital expenditures of less than $1,000,000 individually or $10,000,000 in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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 hereofaggregate;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent or in connection with past practices in excess any matter to the extent such matter is expressly permitted by any other clause of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries tothis Section 6.1(b), (iA) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit enter into any insurance policy naming Contract that would have been a Material Contract had it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, been entered into prior to the imposition date of this Agreement or (B) amend or modify in any Lien material respect or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property assign (other than assignments between or contest them in good faith;
(l) except as set forth in Section 5.01(l) of among the Company Disclosure Schedule, the Company shall not, and shall not permit and/or any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement that would not be adverse to Parent or any of its Subsidiaries) or terminate any Material Contract, other agreement or commitment to or relating to than expirations of any labor unionsuch Contract in accordance with its terms; provided, or (ii) however, that in no event may the Company enter into any labor Contract described in clause (B) or collective bargaining agreement, memorandum or understanding, grievance settlement (E) of the definition of a "Material Contract" or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitmentSpecified Contract, except, in each case, as required by Law;
(m) the Company shall not, and shall would not permit be adverse to Parent or any of its Subsidiaries tofollowing the Effective Time other than in any de minimis respect;
(xi) make any material changes with respect to financial accounting policies or procedures, change 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 of the accounting policies, practices Governmental Authority or procedures quasi-governmental authority (including tax accounting policiesthe Financial Accounting Standards Board or any similar organization);
(xii) settle any action, practices and procedures) used by 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 its their respective Subsidiaries as 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 hereof, except as may be required as a result of a change this Agreement for an amount not in applicable Law excess of the amount so reflected or in GAAPreserved;
(nA) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material Tax election, other than consistent with past practice, (B) change any entity classification for federal income tax election or change purposes of any material Subsidiary, (C) create an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) entity outside of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit United States that is (x) a direct Subsidiary of the Company or any of its Subsidiaries;
domestic Subsidiaries and (py) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend treated as a "disregarded entity" or modify any Contract with any Significant Customer, other than on terms substantially equivalent topartnership for U.S. federal income tax purposes, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations knowingly create a permanent establishment of the Company or any of its Subsidiaries resulting from such amendmentdomestic Subsidiary outside the United States, modification (D) file any material amended Tax Return, (E) adopt any material accounting method for Taxes, other than consistent with past practice or supplement would exceed $25,000 per annum individually or $100,000 per annum change any material accounting method for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.Taxes,
Appears in 1 contract
Interim Operations. Except (1) as otherwise contemplated required by this Agreement applicable Law, (2) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (3) as set forth expressly disclosed in Section 5.01 6.1 of the Company Disclosure Schedule Letter, or (4) as consented to in writing expressly required by Parentthis Agreement, the Company covenants and agrees that during as to itself and its Subsidiaries that, from and after the period from the date execution of this Agreement and prior to the earlier of (x) the Effective Time or (or until y) termination of this Agreement in accordance with Article 7 hereof):
(a) VIII, the Company shall use its commercially reasonable efforts to conduct its business and the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business business, and, to the extent consistent therewith and subject to the restrictions contemplated in this Section 6.1(a), the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable efforts to (A) preserve substantially intact its and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current Subsidiaries’ business organizations, goodwill, assets, properties and Contracts (B) maintain its existence in good standing under the Laws of its incorporation or formation, (C) keep available the services of their its current officers and employees employees, and (D) preserve their its existing relationships with their its material customers, suppliers, licensors, licensees, advertisersdistributors, distributors lessors and other material third parties having Persons with which the Company and its Subsidiaries have business dealings with them relations. Without limiting the generality of the foregoing, except (1) as required by applicable Law, (2) as Parent may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), (3) as expressly disclosed in Section 6.1 of the Company Disclosure Letter corresponding to the applicable clause below, or (4) as expressly required by this Agreement, the Company covenants and agrees as to preserve itself and its Subsidiaries that, from and after the goodwill execution of their respective businesses;
this Agreement and prior to the earlier of (bx) the Effective Time or (y) termination of this Agreement in accordance with Article VIII, Company shall not, not and shall will not permit any of its Subsidiaries to, :
(a) (i) authorize for issuanceamend, issuesupplement or otherwise modify its certificate of incorporation or bylaws (or comparable governing documents) (other than amendments to the governing documents of any wholly owned Subsidiary of the Company that would not prevent, deliver, sell delay or agree impair the Merger or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwiseother transactions contemplated by this Agreement), pledge (ii) adjust, 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), (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise encumber (or any combination thereof) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (except for any dividends or distributions paid by a direct or indirect wholly owned Subsidiary of the capital stock Company to another direct or indirect wholly owned Subsidiary of any of its Subsidiaries, any other securities the Company or any securities convertible or exercisable intoto the Company), or any rights(iv) purchase, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests of the Company any securities convertible or any of its Subsidiaries (including, without limitation, securities exchangeable for, into or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify exercisable for any shares of its capital stockstock (other than pursuant to (1) the exercise of Company Options or the forfeiture of, and shall not permit or withholding of Taxes with respect to, Company Options, Restricted Stock Units or Performance Restricted Stock Units or (2) purchases, repurchases, redemptions or other acquisitions of securities of any wholly owned Subsidiary of its Subsidiaries to split, combine the Company by the Company or reclassify any shares other wholly owned Subsidiary of its capital stockthe Company);
(db) merge or consolidate with any other Person, or restructure, recapitalize, dissolve, reorganize or completely or partially liquidate (other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property)mergers among, or make the restructuring, reorganization or liquidation of 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 to other wholly owned Subsidiaries of the Company consistent with past practicesthat would not prevent, delay or impair the Merger or the other transactions contemplated by this Agreement), or adopt or effect a plan of complete or partial liquidation or dissolution;
(ec) neither except as required by the terms of any Company nor any of its Subsidiaries shall Plan, (iA) grant or agree to any increase in any manner the compensation or benefits payable to any Participant, other than (1) de minimis increases in benefits, (2) increases of any current or former director, officer or employee, except increases cash compensation for employees whose annual base salary is less than $220,000 in the ordinary course of business consistent with past practicepractice not to exceed an aggregate increase of three percent (3%) for all such employees or (3) increases of cash compensation for any employee in connection with a promotion based on job performance or workplace requirements not to exceed a per-employee increase of fifteen percent (15%), increases (B) grant any new extraordinary bonus, severance, change of control, retention, termination or similar compensation or benefits to any Participant, (C) adopt, establish or make any change to any Company Plan or any collective bargaining agreement, other than changes to Company Plans that are intended to be qualified under Section 401(a) of the Code, or Company Plans that provide health or welfare benefits, in each case, which are made in the ordinary course of business and bonuses expressly required do not materially increase such Company Plans’ cost to the Company, (D) take any action to accelerate the vesting of, or payment of, any compensation or benefit under any Company Plan, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Plan, (F) hire or terminate the employment of (other than termination for cause) any Participant with annual base salary or fees in excess of $220,000 per year, (G) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement or any other restrictive covenant obligation of any Participant, (H) forgive any loans to any Participant, or (I) effectuate a “plant closing,” “mass layoff” (each as defined in the Workers Adjustment Retraining Notification Act) or other employee mass layoff event affecting in whole or in part any site of employment, facility or operating unit;
(d) incur any Indebtedness or issue any rights to acquire any Indebtedness, or assume guarantee or otherwise become liable for any Indebtedness for any Person, except (i) in the ordinary course of business, borrowings under the Company’s Existing Credit Agreement (provided that the Company shall not be permitted to increase the borrowing capacity existing employment agreementsas of the date hereof under the Existing Credit Agreement), bonus plans or (ii) inter-company Indebtedness among the Company and other agreements its wholly owned Subsidiaries, or (iii)(A) to the extent not drawn upon and arrangements listed payments are not triggered thereby, letters of credit, bank guarantees, security or described performance bonds or similar credit support instruments and (B) overdraft facilities or cash management programs, in the case of each clauses (A) and (B) issued, made or entered into in the ordinary course of business;
(e) make or commit to make any capital expenditures, or any obligations or liabilities in connection therewith, greater than the amounts set forth on Section 5.01(e6.1(e) of the Company Disclosure Schedule and Schedules, except for any capital expenditures, or any obligations or liabilities in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiariestherewith which otherwise do not exceed $1,000,000 individually, or (iii) except as set forth $2,500,000 in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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 hereofaggregate;
(f) the Company shall nottransfer, and shall not permit lease, license, sell, assign, mortgage, pledge, place a Lien upon, surrender, divest, cancel, abandon, allow to lapse or otherwise dispose of any properties or assets (including capital stock of any of its Subsidiaries tobut not including any Intellectual Property), with a fair market value in excess of $1,000,000 individually or $2,500,000 in the aggregate (other than (1) transactions among the Company and its wholly owned Subsidiaries, (x2) sales of inventory or obsolete or worthless equipment, in each case, in the ordinary course of business, or (3) leases of equipment to customers in the ordinary course of business);
(g) 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 other Company Securities, except (i) for any Shares issued pursuant to Company Options, Restricted Stock Units and Performance Restricted Stock Units outstanding on the date of this Agreement in accordance with the existing terms of such awards and the Company Stock Plans, and (ii) for any Shares issued in connection with conversions of the Convertible Notes in accordance with and pursuant to the Convertible Notes Indenture, but subject to Section 6.17(a), or disposition of the Capped Call Transactions upon exercise and settlement or termination thereof in accordance with and pursuant to the Capped Call Documentation, but subject to Section 6.17(c), in each case, that are outstanding on the date hereof, and (iii) for any issuances, sales or transfers of securities of wholly owned Subsidiaries to the Company or to any other wholly owned Subsidiary of the Company (in each case other than Shares);
(h) (i) acquire or commit to acquire any business, whether by merger, purchase of property or assets, consolidation or otherwise or (ii) subject to the foregoing clause (i) and Section 6.1(e), spend or commit to spend in excess of $1,000,000 individually or $2,500,000 in the aggregate to acquire assets or other property (valuing any non-cash consideration at its fair market value as of the date of the agreement for such acquisition);
(i) make any material change with respect to its financial accounting policies or procedures, or revalue in any material respect any of its properties or assets, including writing off notes or accounts receivables, in each case, except as required by changes in GAAP or by applicable Law;
(j) (i) enter into any new line of business, or acquire (ii) start to conduct a line of business of the Company or agree to acquireany of its Subsidiaries in any geographic area where it is not conducted as of the date of this Agreement;
(k) make any loans, including, without limitation, by merging advances or consolidating withcapital contributions to, or purchasing investments in, any Person (other than extensions of credit to customers in the assets ordinary course of business, advances to directors, officers and other employees for travel and other business-related expenses, in each case, in the ordinary course of business and in compliance in all material respects with the Company’s policies related thereto, or loans, advances or capital stock contributions to the Company or other equity interests any direct or indirect wholly owned Subsidiary of the Company);
(l) (i) 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 or take (or fail to take) any action that would reasonably be expected to cause or result in a material breach of, or by any other mannermaterial default under, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries Material Contract or (ii) Subsidiaries organized outside other than in the ordinary course of the United States business and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtednessafter consultation with Parent, enter into any agreement toContract that would have been a Material Contract had it been entered into prior to the date of this Agreement; provided, incurthat for the avoidance of doubt, assumesubject to Section 6.1(b), be responsible for this Section 6.1(l) shall not prohibit or pre-pay restrict any IndebtednessCompany Plans;
(m) without limiting the rights of Parent under Section 6.16 (Stockholder Litigation), guarantee(i) settle, waive, release compromise or otherwise resolve any Proceeding in a manner resulting in liability for, or agree to guaranteerestrictions on the conduct of the business by, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee other than settlements, waivers or releases of, or compromises for or resolutions of any debt securities Proceeding unrelated to Intellectual Property if the amount of othersany such settlement is not in excess of $1,000,000 individually or $2,500,000 in the aggregate; provided, enter into that such settlements do not involve any “keep well” non-de minimis injunctive or equitable relief or impose non-de minimis restrictions on the business activities of the Company and its Subsidiaries or Parent and its Subsidiaries; or (ii) waive any material right with respect to any material claim held by the Company or any of its Subsidiaries; or
(n) fail to maintain, cancel, terminate or allow to lapse without a commercially reasonable substitute therefor, any material License;
(A) other agreement than in the ordinary course of business, terminate, fail to maintain renew, abandon, cancel, let lapse, fail to continue to prosecute or defend, encumber, license (including through covenants not to ▇▇▇, non-assertion provisions or releases, immunities from suit that relate to Intellectual Property or any financial statement condition of another person or enter into any arrangement having the economic effect of option to any of the foregoing), sell, transfer or otherwise dispose of any Company IP; (B) issue, bring, commence, threaten or settle any litigation or other proceedings with respect to any Patent comprised in the Company IP; or (yC) sellbecome a member or promoter of, leaseor a contributor to, or make any material commitments or material agreements regarding any patent pool, industry standards body, standard setting organization, industry or other trade association or similar organization, in each case that requires or obligates, or could require or obligate, the Company or any of its Affiliates (including future Affiliates) to grant or offer to any other Person any license or subject other right to any Lien or otherwise dispose ofIntellectual Property;
(p) enter into, or agree to sell, lease or subject to any Lien or otherwise dispose ofenter into, any of its properties Contract that could directly or assets in excess of $25,000 individually indirectly obligate or $50,000 in the aggregate other than purport to obligate (i) pursuant to existing contracts and commitments described in Section 5.01(g) of Parent or its Affiliates (other than the Company Disclosure Schedule, and its Subsidiaries) or (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries to cause or require, or purport to cause or require, Parent or its Affiliates (other than the Company and its Subsidiaries), in any transaction specifically contemplated such case, to (A) grant to any other Person (including the counterparty to such Contract and/or its Affiliates) any right to or with respect to any Intellectual Property or (B) be bound by, or subject to, any license or covenant (including any covenant not to ▇▇▇, assert rights or offer fixed or reasonable royalties) with respect to any Intellectual Property; (q) (A) settle any material Tax claim, audit, or assessment for an amount materially in excess (other than by this Agreement);
(i) except as set forth in Section 5.01(ia de minimis amount) of the Company Disclosure Schedule, amount reserved or accrued on the Company shall not, and shall not permit any of its Subsidiaries toBalance Sheet (or most recent consolidated balance sheet included in the Company Reports), (iB) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in change any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries toTax election, change any of the annual Tax accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, takeperiod, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make adopt or change any method of Tax accounting, (C) make any material tax election or change an annual accounting period with respect amendment to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claimReturns, assessment (D) surrender or liability relating to the Company or any of its Subsidiaries, or surrender waive any right to claim a material Tax refund of Taxes, except as set forth in Section 5.01(oor (E) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation statute of limitations period applicable to any material Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiariesassessment;
(pr) the Company shall (i) use its commercially reasonable efforts toterminate, and shall cause its Subsidiaries to use their respective commercially reasonable efforts tocancel, prevent the termination of make any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance material changes to the Company structure or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter intoterms, or materially amend, modify reduce the limits or supplement, conditions of any Lease or other Material Contract under which the costs or obligations of the Company Insurance Policies, including allowing the policies to expire without renewing such policies or any of its Subsidiaries resulting from such amendmentobtaining comparable replacement coverage, modification or supplement would exceed $25,000 per annum individually prejudicing rights to insurance payments or $100,000 per annum for all such amendments, modifications and supplements in the aggregatecoverage; andor
(qs) the Company shall notagree, and shall not permit any of its Subsidiaries to, agree resolve or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 (a) Each of the Company Disclosure Schedule or as consented to in writing by Parent, the Company Partnership and Parent covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent or until termination the Partnership, as applicable, shall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as otherwise expressly contemplated by this Agreement, as provided in any Contract in effect as of the date of this Agreement in accordance with Article 7 hereof):
(a) Agreement, or as required by applicable Law, the business and operations of the Company it and its Subsidiaries shall be conductedconducted in the Ordinary Course provided, that this Section 7.1(a) shall not prohibit the Parties and their respective Subsidiaries from taking commercially reasonable actions outside of the Ordinary Course in response to changes or developments resulting from the COVID-19 pandemic, and to the books and records of the Company and its Subsidiaries shall be maintainedextent consistent therewith, only in the ordinary course of business and the Company it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve their business organizations intact their current business organizationsand maintain existing relations and goodwill with Governmental Entities, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisersdistributors, distributors creditors, lessors, employees and other material third parties having business dealings with them associates. Without limiting the generality of and to preserve in furtherance of the goodwill foregoing, from the date of their respective businesses;
this Agreement until the Effective Time, except as otherwise expressly: (a) contemplated by this Agreement; (b) required by applicable Law or the Company terms of any Partnership Material Contract or Parent Material Contract, as applicable; (c) as approved in writing (which approval shall notnot be unreasonably withheld, conditioned or delayed) by the other Party; or (d) set forth in the corresponding subsection of Section 7.1 of the Partnership Disclosure Letter, as it relates to the Partnership and its Subsidiaries, or in 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) authorize for issuancemake any change to its Organizational Documents as in effect on the date of this Agreement in any manner that would reasonably be expected to prohibit, issueprevent or materially impede, deliverhinder or delay the ability of such Party to satisfy any of the conditions to, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiariesconsummation of, any the Merger or the other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; Transactions;
(ii) repurchase, redeem (A) merge or otherwise acquire any shares of the capital stock or other equity interests of the Company consolidate itself or any of its Subsidiaries (including, without limitation, securities exchangeable forwith any other Person, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit adopt a 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization reorganization, in each case, except (1) such transactions solely between or among, or solely involving, such Party and one or more of its wholly owned Subsidiaries, or a Subsidiary of such Party and one or more wholly owned Subsidiaries of such Subsidiary, (2) 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 ability of such Party to satisfy any of the Company conditions to, or the consummation of, the Merger or the other Transactions;
(iii) issue, sell, pledge, dispose of, grant, transfer, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance, or enter into any Contract (including, with respect to the voting of), any of its Subsidiaries partnership interests, limited liability company interests, shares of capital stock or equity interests, as applicable (other than any transaction specifically contemplated by this Agreement);
(i) except the issuance of partnership interests, limited liability company interests, shares of capital stock or equity interests, as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries toapplicable, (iA) enter intoby a wholly owned Subsidiary of such Party to such Party or one or more of such Party’s wholly owned Subsidiaries, or materially amendby a wholly owned Subsidiary of such Party’s Subsidiary to such Subsidiary or one or more other wholly owned Subsidiaries of such Subsidiary, modify (B) in respect of equity-based awards granted in the Ordinary Course or supplement any Contract outside the ordinary course (C) with respect to Parent, equity securities of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations Parent in excess of $25,000 500,000,000 in the aggregate (except as may be necessary for based on the Company to comply with its obligations hereundermarket price of the securities at the time of issuance)), or (ii) waivesecurities convertible or exchangeable into or exercisable for any such partnership interests, releaselimited liability company interests, grantshares of capital stock or equity interests, assignas applicable, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall notoptions, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof warrants or other planned rights of any kind to acquire any partnership interests, limited liability company interests, shares of capital expenditures stock or equity interests, as applicable, or such convertible or exchangeable securities; provided, that, nothing in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, this clause (iii) maintain all Leased Real Property shall be deemed to restrict the vesting and/or payment, or the acceleration of the vesting and/or payment, of any awards or other equity awards in accordance with the terms of any existing equity-based, bonus, incentive, performance or other compensation plan or arrangement or Employee Benefit Plan (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to connection with any casualty or condemnation and Permitted Liens, subject to the expiration equity award holder’s termination of real property leases in accordance with their terms, and service);
(iv) payreclassify, prior to the imposition 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 for any Lien partnership interests, limited liability company interests, shares of capital stock or material penalty all taxesequity interests, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithas applicable;
(lv) 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;
(vi) make any material changes with respect to accounting policies, except as set forth required by changes in Section 5.01(l) GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement Financial Accounting Standards Board or any other agreement or commitment to or relating to any labor unionsimilar organization, or Law, including pursuant to SEC rule or policy;
(iivii) enter into make or declare any labor dividends or collective bargaining agreement, memorandum distributions to the holders of Common Units or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, exceptParent Common Stock, in each case, as required by Law;other than in the Ordinary Course, subject to Section 7.11; or
(mviii) the Company shall notagree, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
(b) Notwithstanding anything to the contrary in 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 respect 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 governance arrangements of such entity and 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 its equity holders.
Appears in 1 contract
Sources: Merger Agreement (Tc Pipelines Lp)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time (or until termination of unless Parent shall otherwise approve in advance in writing (such approval not to be unreasonably withheld), and except as otherwise expressly required by this Agreement in accordance with Article 7 hereof):
(a) or applicable Laws), the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary course of business and consistent with past practice and, to the extent consistent therewith, the Company and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve their business organizations intact their current and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, Employees, sales representatives and business organizations, associates and keep available the services of their current officers its and employees its Subsidiaries’ present Employees and preserve their relationships agents. Without limiting the generality of the foregoing, and in furtherance thereof, from the date hereof until the Effective Time, except (A) as otherwise expressly required by this Agreement or applicable Law, (B) as Parent may approve in advance in writing (such approval not to be unreasonably withheld) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company shall not and shall not permit its Subsidiaries to:
(i) adopt or propose any change in its certificate of incorporation or bylaws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with their any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material customerschanges or restrictions on its assets, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective operations or businesses;
(biii) acquire assets outside of the Company shall not, and shall not permit any ordinary course of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, business from any other securities or any securities convertible or exercisable intoPerson, or any rights, warrants or options other than acquisitions pursuant to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding Contracts in effect as of the date hereof; ;
(iiiv) repurchaseissue, redeem sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or otherwise acquire authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee, or encumbrance of, any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (includingother than the issuance of shares (A) by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary or (B) in respect of the exercise of Company Options outstanding as of the date of this Agreement in accordance with their terms and, without limitationas applicable, securities exchangeable forthe Stock Plan as in effect as of the date of this Agreement), or securities convertible or exchangeable into, exercisable for or with a value measured by reference to any shares of such capital stock, or any options, warrants, calls, commitments warrants or other rights of any kind to acquire, acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Lien (other equity interests than a Permitted Lien) not incurred in the ordinary course of the Company business consistent with past practice;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any of its Subsidiaries); Person;
(vii) incur any Indebtedness, or (iii) amend, modify issue or waive sell any term of debt securities or warrants or other rights to acquire any outstanding debt security of the Company or any of its Subsidiaries, except for Indebtedness that will constitute Funded Debt as of the Closing;
(Aviii) as required by this Agreement, (B) except as set forth in the capital budgets in Section 5.01(b6.1(a)(viii) of the Company Disclosure ScheduleLetter and consistent therewith, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans make or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansauthorize any capital expenditure;
(cix) the Company shall not (i) sell, transfer or pledge, or agree enter into any Contract that would have been a Material Contract had it been entered into prior to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockthis Agreement;
(dx) make any changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles;
(xi) settle any actions, suits, claims, hearings, arbitrations, investigations or other than quarterly dividends not proceedings before a Governmental Entity for an amount in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit 100,000 or any of its Subsidiaries to, declare, set aside obligation or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries liability of the Company consistent with past practices)in excess of such amount;
(exii) neither the Company nor amend, modify or terminate any of its Subsidiaries shall Material Contract, or cancel, modify or waive any material debts or claims held by it or waive any material rights;
(ixiii) grant (A) make, change, or agree to rescind any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases Tax election (other than an election made on a Tax Return filed in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e); (B) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return; (C) adopt or change any method or period of Tax accounting; (D) settle or compromise any claim, audit, assessment or dispute relating to material Taxes; (E) surrender any material claim for a refund of Taxes; (F) enter into any closing agreement, settle or compromise agreement relating to Taxes; (G) file any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(oReturn that is inconsistent with past practice; (H) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business); or (I) take any action which is reasonably likely to result in an increase in the Tax liability of the Company or any of its Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of the Parent or the Surviving Corporation;
(xiv) transfer, assign, 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 any of its Subsidiaries, including capital stock of any of its Subsidiaries, except for Permitted Liens or in connection with services provided in the ordinary course of business and sales of obsolete assets and except for 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 hereof; provided, that with respect to Company Intellectual Property, the foregoing shall be limited to granting non-exclusive licenses in the ordinary course of business consistent with past practice with a fair market value under the foregoing threshold;
(xv) assign, grant any material right in, cancel, abandon or allow to lapse any Company Intellectual Property necessary or useful for the manufacture, use, sale, offer for sale or export of any Medical Device or that otherwise enables a third party to compete with the Company with respect to the manufacture or sale of any product that competes with any Medical Device, in each case other than non-exclusive licenses granted to customers (solely to permit such customers’ use of the Company’s and its Subsidiaries’ products and services), or to third-party service providers (solely for the purpose of facilitating their provision of services to or on behalf of the Company and its Subsidiaries), in each case, in the ordinary course of business consistent with past practice;
(xvi) except as required pursuant to existing written, binding agreements in effect prior to the date hereof, as set forth in Section 5.1(j)(i) 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 director, officer, employees or consultants of the Company or any of its Subsidiaries, (B) increase in any manner the compensation or consulting fees, bonus, pension, welfare, fringe, severance, termination pay or other benefits of, or pay any bonus to, any current or former director, officer, employee or consultant (who is a natural person) of the Company or any of its Subsidiaries, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Benefit Plan, (D) become a party to, establish, adopt, commence participation in, amend or terminate any Benefit Plan or any arrangement that would have been a Benefit Plan had it been entered into prior to this Agreement, other than termination of the Company 401(k) Plan pursuant to Section 6.9(b), (E) take any action to accelerate the vesting, lapsing of restrictions or payment in respect of any award or benefit provided pursuant to any Benefit Plan, other than acceleration of vesting of Company Options and Company Restricted Shares pursuant to Section 4.3, (F) fund or in any other way secure the payment of compensation or benefits under any Benefit Plan, (G) hire any employee or engage any consultant (who is a natural person) with base compensation in excess of $75,000 annually, (H) change any actuarial or other assumptions used to calculate funding obligations with respect to 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, except as may be required by GAAP, (I) forgive any loans or issue any loans to any current or former directors, officers, employees or consultants (who are natural persons) of the Company or any of its Subsidiaries, or (J) terminate the employment of any employee other than for cause;
(xvii) become a party to, establish, adopt, amend or commence participation in any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(xviii) take any other similar action, action or omit to take any action relating that would reasonably be expected to result in any of the conditions to the filing of Merger set forth in Article VII not being satisfied;
(xix) engage in (A) any Tax Return trade loading practices or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent other promotional sales or discount activity or other action practice with the effect of accelerating to pre-Closing periods sales to the trade or omission otherwise that would otherwise be expected (in the ordinary course of business) to occur in post-Closing periods, (B) any practice which would have the effect of materially increasing accelerating collections to pre-Closing periods of receivables that would otherwise be expected (in the present or future Tax liability or materially decreasing ordinary course of business) to occur in post-Closing periods, (C) any present or future Tax benefit practice which would have the effect of postponing to post-Closing payments by the Company that would otherwise be expected (in the ordinary course of business) to be made in pre-Closing periods, or (D) any promotional sales, discount activity, deferred revenue activity or inventory overstocking or understocking activity, in each case in this clause (D) in a manner outside the ordinary course of its Subsidiariesbusiness or contrary to generally accepted industry practices;
(pxx) sell, transfer or otherwise move any Inventory from the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent toin the ordinary course of business or hold, or take any action to facilitate or permit its distributors to hold, more beneficial on balance to the Company than ninety (90) days of Inventory at any time at or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; andClosing;
(qxxi) the Company shall notform one or more additional Subsidiaries; or
(xxii) agree, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (CONMED Corp)
Interim Operations. 6.1.1 PSI shall, and PSI shall cause Phoenix to: (a) carry on its business only in the Ordinary Course of Business substantially the same manner as heretofore conducted; (b) except as they may expire or be terminated by any other party thereto, keep in full force and effect, and not cause a default of any of its obligations under, any PSI Commitments; (c) keep in full force and effect the insurance coverage in effect on the date hereof to the extent that such insurance continues to be reasonably available; (d) maintain, renew, keep in full force and effect and preserve its business organization and material rights and Licenses and use commercially reasonable efforts to (i) retain its present employee force and (ii) maintain its existing, or substantially equivalent, relationships with others having business relations with it and to use commercially reasonable efforts to maintain the continuance of its general customer and supplier relationships; and (e) duly comply with all Laws applicable to it and to the conduct of its business, except where the failure to so comply would not, individually or in the aggregate, have a PSI Material Adverse Effect.
6.1.2 Except with the prior written consent of IVAX or as otherwise contemplated required or permitted by this Agreement or as set forth in Section 5.01 of the Company Disclosure contemplated by Schedule or as consented to in writing by Parent6.1, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company PSI shall not, and PSI shall not permit cause Phoenix to not, directly or indirectly, do any of the following: (a) voluntarily or involuntarily sell, transfer, surrender, abandon or dispose of any of its Subsidiaries toproperties, assets or rights (tangible or intangible) other than in the Ordinary Course of Business or disclose any material proprietary or confidential information to any third party not a party to a written confidentiality agreement with or otherwise under an obligation of confidentiality to PSI or Phoenix; (b) make any mortgage or pledge or subject itself or its properties or assets to any Lien, except for the Lien of current Taxes or assessments not yet delinquent, Liens and deposits (including mechanics’, materialmen’s and other similar Liens) arising in the Ordinary Course of Business securing amounts not yet due and payable; (c) enter into or materially amend any Contract except in the Ordinary Course of Business; (d) grant any increase in the compensation payable or to become payable to officers or employees (including, without limitation, any such increase pursuant to any bonus, pension, profit-sharing plan or other PSI Plan or commitment), except in the Ordinary Course of Business or pursuant to the provisions of existing obligations; (e) incur, assume or take any property subject to any liability, except in the Ordinary Course of Business; (f) alter the manner of keeping its books, accounts or records, or change in any manner the accounting practices therein reflected, other than alterations or changes required by GAAP or applicable Law; (g) dispose of or permit a lapse (to the extent that such lapse is reasonably preventable) of any rights to any material intangible personal property, including, without limitation, Intellectual Property, other than in the Ordinary Course of Business; (h) amend its Certificate of Incorporation or Bylaws; (i) authorize for issuance, issue, deliver, sell or agree expend or commit to expend funds for capital additions in excess of fifty thousand dollars ($50,000) that is not reflected in either the 2004 or 2005 Capital Additions Budgets previously made available to IVAX or its representatives; (j) adopt or amend any PSI Plan; (k) cancel, waive or release any debts, rights or claims, except in the Ordinary Course of Business, but in no event in excess of two hundred fifty thousand dollars ($250,000); (l) write off the value of any inventory or any accounts receivable or increase the reserves for obsolete, damaged, spoiled or otherwise not useable inventory or uncollectible receivables, except in accordance with GAAP; (m) enter into any indemnification, severance, employment or consulting Contract with any Person who is not a current officer, employee or consultant of PSI or Phoenix other than in the Ordinary Course of Business, or enter into any indemnification, severance, employment or consulting Contract with any current officer, employee or consultant of PSI or Phoenix; (n) enter into any transaction with an Affiliate (other than transactions with customers and suppliers who are Affiliates entered into in the Ordinary Course of Business for goods or services on terms and at prices customary for arm’s-length transactions with third parties for such goods and services); (o) issue, sell or deliver (whether through the authorize for issuance or granting sale, shares of any class or series of its securities (including, without limitation, by way of stock split or dividend) or any subscriptions, options, commitments, subscriptionswarrants, rights or convertible securities or enter into any agreements or commitments of any character obligating it to issue or sell any such securities; (p) redeem, purchase or otherwise)otherwise acquire, pledge directly or otherwise encumber indirectly, any shares of its capital stock or the capital stock of any of its Subsidiariesoption, any warrant or other securities right to purchase or any securities convertible or exercisable into, or any rights, warrants or options to acquire, acquire any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (iiq) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside declare or pay any dividends on dividend or other distribution (whether in cash, stock or other property), or make any other distributions in ) with respect of, any of to its capital stock (except for dividends other than the quarterly dividend on the PSI ▇▇ ▇▇▇▇ A Preferred Stock and the PSI Series B Preferred Stock that shall continue to accrue in accordance with the terms of PSI’s Certificate of Incorporation but shall not be paid by direct or indirect wholly owned Subsidiaries to the Company or to in cash); (r) other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases than in the ordinary course Ordinary Course of business consistent with past practiceBusiness, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any a new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not which if in existence on the date hereof or amend or modify or terminateof this Agreement would have been at forth on Schedule 3.28.1 as a PSI Commitment, or pay amend, terminate or elect not to renew any benefit that is not required by, any Benefit Plan or other 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;
PSI Commitment; (f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(is) except as set forth in permitted by this Section 5.01(i) of the Company Disclosure Schedule6.1.2, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating which would render any of PSI’s or Phoenix’s representations or warranties materially untrue or misleading, which would be a material breach or violation of any of PSI’s or Phoenix’s covenants or which would render the satisfaction of any condition to the filing of Closing impossible; (t) take any Tax Return action which results or the payment of any Taxcould reasonably be expected to result in a PSI Material Adverse Effect; or (u) agree, if such electionwhether in writing or otherwise, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing. In addition, neither PSI nor Phoenix shall incur or pay expenses for professional services performed prior to the Closing in connection with the transactions contemplated by this Agreement in excess of an aggregate of $575,000.
Appears in 1 contract
Sources: Stock Purchase Agreement
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except (w) as otherwise expressly contemplated by this Agreement Agreement, (x) as required by applicable Law, (y) for any COVID-19 Measures, subject, to the extent such applicable COVID-19 Measure is inconsistent with past practice, to prior consultation with Parent (to the extent such prior consultation is legally permissible and practicable) or (z) as set forth in Section 5.01 6.1(a) of the Company Disclosure Schedule or as consented to in writing by ParentLetter, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(ai) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in all material respects in the ordinary course Ordinary Course of business Business and (ii) to the extent consistent therewith, the Company and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve their business organizations intact their current business organizations, keep available the services of their current officers and employees maintain existing relations and preserve their relationships goodwill with their material Governmental Entities and customers, suppliers, licensors, licensees, advertisersdistributors, distributors creditors, lessors and other business associates having material third parties having business dealings relationships with them the Company and its Subsidiaries and keep available the services of its and its Subsidiaries’ present officers and key Employees; provided that no action by the Company or any of its Subsidiaries with respect to preserve the goodwill matters whose subject matter is specifically addressed by any provision of their respective businesses;Section 6.1(b) shall be deemed a breach of this Section 6.1(a) unless such action would constitute a breach of such other provision.
(b) Without limiting the generality of and in furtherance of Section 6.1(a), from the date of this Agreement until the Effective Time, except (v) as expressly contemplated by this Agreement, (w) as required by applicable Law, (x) for any COVID-19 Measures, subject, to the extent such applicable COVID-19 Measure is inconsistent with past practice, to prior consultation with Parent (to the extent such prior consultation is legally permissible and practicable), (y) as approved in writing by Parent (which approval shall not be unreasonably withheld, conditioned or delayed) or (z) as set forth in Section 6.1(b) of the Company Disclosure Letter, the Company, on its own account, shall not, not and shall cause its Subsidiaries not permit to:
(i) make or propose any change to the Company’s Organizational Documents or the Organizational Documents of any of the Company’s Subsidiaries;
(ii) except for any such transactions among its direct or indirect wholly owned Subsidiaries, (A) merge or consolidate itself or any of its Subsidiaries towith any other Person or (B) restructure, reorganize or completely or partially liquidate;
(iiii) acquire assets outside of the Ordinary Course of Business from any other Person (A) with a fair market value or purchase price in excess of $25 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 the Company to consummate the Transactions, in each case, other than transactions among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly-owned Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber or authorize for the issuance, issuesale, deliverpledge, sell or agree or commit to issuedisposition, sell or deliver (whether through the issuance or granting of optionsgrant, commitmentstransfer, subscriptionsEncumbrance of, rights to purchase or otherwise), pledge or otherwise encumber enter into any Contract with respect to the voting of, any shares of its capital stock or of any of its Subsidiaries (other than the issuance of shares (A) by its direct or indirect wholly owned Subsidiary to it or another of its direct or indirect wholly owned Subsidiaries, (B) in respect of equity-based awards outstanding as of the date of this Agreement or granted in accordance with Section 6.1(b)(xviii) or (C) granted in accordance with Section 6.1(b)(xviii), 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 (other than the grant of equity-based awards in accordance with Section 6.1(b)(xviii));
(v) create or incur any Encumbrance (other than any Permitted Encumbrances) over any material portion of the Company’s and its Subsidiaries’ consolidated properties and assets that is not incurred in the Ordinary Course of Business on any of its assets or any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding Encumbrances (A) that are required by or automatically effected by Contracts in place as of the date day hereof; , (iiB) repurchase, redeem that do not materially detract from the value of such assets or otherwise acquire any shares of (C) that do not materially impair the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests operations of the Company or any of its Subsidiaries); ;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (iiiother than (A) amend, modify to or waive any term of any outstanding security of from the Company or and any of its Subsidiaries, except (A) as required by this Agreementdirect or indirect wholly owned Subsidiaries or in accordance with Section 6.1(b)(xviii), (B) as set forth advances to Employees or consultants for travel and other business-related expenses in Section 5.01(b) the Ordinary Course of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted Business or (C) extensions of trade credit in connection with terminating the Options and the Stock Plans;
(cOrdinary Course of Business) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, 10 million in the Company shall not, and shall not permit any of its Subsidiaries to, aggregate;
(vii) declare, set aside aside, make or pay any dividends on (whether dividend or other distribution, payable in cash, stock stock, property or other property)otherwise, or make any other distributions in with respect of, to any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiaries Subsidiary to the Company it or to any other direct or indirect wholly owned Subsidiaries of the Company consistent with past practices)Subsidiary) or modify in any material respect its dividend policy;
(eviii) neither reclassify, split, combine, subdivide or redeem, purchase (through the Company nor Company’s share repurchase program or otherwise) or otherwise acquire, directly or indirectly, any of its Subsidiaries shall (i) grant capital stock or agree to securities convertible or exchangeable into or exercisable for any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any shares of its Subsidiariescapital stock, or (iii) except as set forth in Section 5.01(e) of other than with respect to the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests ofof a direct or indirect wholly owned Subsidiary of the Company, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made (A) in order to pay Taxes in connection with the prior written consent exercise or vesting of Company Equity Awards outstanding as of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by date hereof or among granted in accordance with Section 6.1(b)(xviii), pursuant to the terms of the Company Stock Plan and the applicable award agreement, in the Ordinary Course of Business or (B) the acquisition by the Company of any Company Equity Awards granted pursuant to any Company Stock Plan in connection with the forfeiture of such awards;
(ix) except as provided in the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described capital expenditure plan set forth in Section 5.01(g6.1(b)(ix) of the Company Disclosure ScheduleLetter, make or authorize any payment of, or accrual or commitment for, capital expenditures, except any such expenditure (iiA) immaterial properties or assets not in excess of $20 million in the aggregate during any consecutive twelve (or immaterial portions of properties or assets described 12) month period (other than capital expenditures within the thresholds set forth in Section 5.01(g6.1(b)(ix) of the Company Disclosure ScheduleLetter), (iiiB) Permitted Liens, expenditures not in excess of $20 million (ivnet of insurance proceeds) Liens relating to Taxes in the aggregate 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 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 the Company or to any other direct or indirect wholly owned Subsidiary of the Company, in accordance with GAAP each case in response to any unanticipated and subsequently discovered events, occurrences or developments;
(vx) other than non-taxable transfers by or among in the Company and the Company’s Subsidiaries;
(h) neither the Company nor Ordinary Course of Business, enter into any of its Subsidiaries shall adopt or put Contract that would have been a Material Contract had it been entered into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by prior to this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) manner that is materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating adverse to the Company or any of its Subsidiaries, waive any material rights under, or terminate any Material Contract other than (A) expirations and renewals of any such Contract in the Ordinary Course of Business in accordance with the terms of such Contract, (B) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other non-exclusive rights under Intellectual Property owned by the Company or its Subsidiaries granted in the Ordinary Course of Business or (C) any agreement among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries;
(xi) other than in the Ordinary Course of Business or with respect to amounts that are not material to the Company and its Subsidiaries, taken as a whole, cancel, release 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 the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries;
(1) settle or compromise, or offer or propose to settle or compromise any material Proceeding, including before a Governmental Entity, except for such Proceedings that (A) involve solely monetary remedies with a value not in excess of $10 million in the 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 its Subsidiaries, (C) do not relate to any Transaction Litigation and (D) do not include an admission of liability or fault on the part of the Company or its Subsidiary or (2) commence any material litigation or other claim, suit, action or proceeding, against any third party (excluding Parent or any of its Affiliates or Representatives) other than (A) in the Ordinary Course of Business consistent with past practice or (B) commencing any counterclaim to preserve, protect or enforce any Intellectual Property or material assets of the Company (provided, that notwithstanding the preamble of this Section 6.1(b), in the case of this clause (2), the Company shall only be obligated to consult with Parent and consider in good faith Parent’s feedback thereon, including with respect to strategy, but shall not require Parent’s consent);
(xiii) fail to use commercially reasonable efforts to maintain in effect any material insurance policy, unless simultaneous with any termination, cancellation or lapse of such material insurance policy, replacement policies are in effect providing coverage substantially similar to the coverage under the terminated, cancelled or lapsed material insurance policies;
(xiv) adopt or implement any shareholder rights plan, “poison pill,” anti-takeover plan or other similar agreement or plan;
(xv) write down any of its material assets or materially amend any material financial accounting policies or procedures, except as required by changes to GAAP;
(xvi) (A) make, change or rescind any material election in respect of Taxes or accounting policies, (B) adopt or change an annual Tax accounting period or any material Tax accounting method, (C) enter into any closing agreement with respect to Taxes, (D) settle any material Tax claim, audit, assessment or dispute materially in excess of the amount reserved therefore, (E) surrender any right to claim a refund of Taxesa material amount of Taxes or (F) fail to file when due (taking into account any available extensions) any material Tax Return;
(xvii) transfer, sell, lease, license, grant, divest, cancel, abandon, allow to lapse or expire or otherwise dispose of, any assets (tangible or intangible), product lines or businesses that are, in each case, material to it and its Subsidiaries, taken as a whole, including capital stock of any of its Subsidiaries, except in connection with (A) sales of or non-exclusive licenses of the foregoing provided in the Ordinary Course of Business, (B) sales of obsolete assets, (C) sales, leases, licenses or other dispositions of assets (not including services) with a fair market value not in excess of $15 million in the aggregate other than pursuant to Material Contracts in effect prior to the date of this Agreement, or entered into after the date of this Agreement in accordance with this Agreement and (D) sales among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries;
(xviii) except as set forth in Section 5.01(o6.1(b)(xviii) of the Company Disclosure ScheduleLetter, consent or as required by the 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 extension or waiver Employee other than in the Ordinary Course of Business; further, except as (x) disclosed in Section 6.1(b)(xviii) of the limitation period Company Disclosure Letter or (y) as required pursuant to a Benefit Plan in effect as of the date of this Agreement or (z) as required pursuant to applicable Law, the Company shall not: (A) grant any new long-term incentive or equity-based awards or amend or modify the terms of any such outstanding awards under any Benefit Plan, (B) grant any retention or transaction bonuses, (C) increase or change the compensation or benefits payable to any executive officer (other than (y) changes in health and welfare benefits that are generally applicable to all salaried Employees in the Ordinary Course of Business or (z) increases in the base salaries and benefits of any executive officer in the Ordinary Course of Business), (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 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 Tax claim Employee, (G) take any action to fund or assessment relating secure the payment of any amounts under any Benefit Plan (other than contributions to the trust of a tax-qualified employee benefit plan in effect on the date hereof), (H) other than as required by GAAP, change any assumptions used to calculate funding or contribution obligations under any Benefit Plan, (I) waive, release, amend or fail to enforce the restrictive covenant obligation of any Employee who is in a position at or above the level of Senior Director or (J) terminate or transfer the employment or services of any Employee who is in a position at or above the level of Senior Director (other than for cause) or hire or engage any Person to be an Employee in a position at or above the level of Senior Director (provided, the Company shall consult with Parent regarding the termination or transfer of the employment or services of any Employee who is in a position at the level of Director (other than for cause) and the hiring or engagement of any Person to be an Employee in a position at the level of Director) and, in each case, consider in good faith Parent’s feedback thereon);
(xix) except as set forth in Section 6.1(b)(xix) of the Company Disclosure Letter, recognize any Labor Organization as the representative of any of the employees of the Company or any of its Subsidiaries, or take become a party to, establish, adopt, modify, amend, renew, extend, commence negotiations for or terminate any collective bargaining agreement or other similar actionwritten agreement with a Labor Organization, in each case, other than in the Ordinary Course of Business or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiariesas required by applicable Law;
(pxx) incur any Indebtedness (including the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination issuance of any Contract with any Significant Customerdebt securities, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease warrants or other Material Contract rights to acquire any debt security) or guarantee any such Indebtedness, except for (A) Indebtedness for borrowed money incurred in the Ordinary Course of Business under which the costs or obligations Company’s revolving credit facilities and other lines of credit existing as of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.date of
Appears in 1 contract
Sources: Merger Agreement (Rogers Corp)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees as to itself and its Subsidiaries that during the period from and after the date of this Agreement and prior to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the extent consistent therewith, the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve their respective business organizations intact and to maintain their current business organizations, keep available the services of their current officers existing relations and employees and preserve their relationships goodwill with their material customers, suppliers, licensorsregulators, licenseesdistributors, advertiserscreditors, distributors lessors, employees and other material third parties having business dealings with them associates (unless Parent shall otherwise approve in writing (which approval will not be unreasonably withheld or delayed)), except as otherwise expressly contemplated by this Agreement or disclosed in Section 6.1(a) of the Company Disclosure Letter, except as required by applicable Law and except that this sentence shall not prohibit actions or omissions that would be prohibited by clauses (i) through (xv) of the following sentence but are not so prohibited because they are within the applicable exceptions and permissions of such clauses or are approved by Parent in writing as provided therein. In addition, the Company covenants and agrees as to preserve itself and its Subsidiaries that, from and after the goodwill date of their respective businesses;this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing (which approval will not be unreasonably withheld or delayed)), except as otherwise expressly contemplated by this Agreement or disclosed in Section 6.1(a) of the Company Disclosure Letter, and except as required by applicable Law:
(bi) the Company shall notnot (A) amend its articles of incorporation or bylaws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of any capital stock other than regular quarterly cash dividends on the Company Shares approved by the Company’s board of directors and shall not in an amount which is consistent with past practice; or (D) purchase, repurchase, redeem or otherwise acquire or permit any of its the Company’s Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company Company’s or any of its Subsidiaries); ’ capital stock or (iii) amend, modify securities convertible into or waive any term of any outstanding security of the Company exchangeable or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify exercisable for any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its such capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(eii) neither the Company nor any of its Subsidiaries shall (i) grant merge or agree to consolidate with any increase in any manner the compensation or benefits of any current or former director, officer or employeeother Person, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into for any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or such transactions among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States Company (or the Company and its territorial possessionswholly-owned Subsidiaries), or adopt a plan of liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect take any action that would prevent the Merger from qualifying as a plan “reorganization” within the meaning of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization Section 368(a) of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)Code;
(iiv) except as set forth in Section 5.01(i) of neither the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or nor any of its Subsidiaries shall have monetary obligations terminate, establish, adopt, enter into, make any new grants or awards of stock-based compensation or other benefits under, amend or otherwise modify, any Company Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation of any directors, officers or key employees except (A) in excess the normal and usual course of $25,000 business (except as may be necessary which shall include normal periodic performance reviews and related Company Compensation and Benefit Plan increases and the provision of individual Company Compensation and Benefit Plans consistent with past practice for directors, officers and employees and the adoption of Company Compensation and Benefit Plans for employees of new Subsidiaries in amounts and on terms consistent with past practice); provided that in no event shall the Company (w) institute a broad based change in compensation, (x) increase or institute any new employment agreement, severance, retention, or similar benefits, (y) increase or institute any transaction or deal bonus with respect to comply with its obligations hereunder)the Merger which could result in payments upon the Merger, or (iiz) waivemake grants or awards of Company Options, releaseCompany Restricted Stock or Company Awards, grant, assign, modify unless such grants or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business awards are consistent with past practices disclosed practice, approved in Section 5.01(j) of the Company Disclosure Schedule advance by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
Parent (k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts approval not to permit any insurance policy naming it as beneficiary be unreasonably withheld or loss payable payee to be canceled or terminateddelayed), (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, made subject to the expiration condition, in the case of real property leases grants or awards of Company Restricted Stock, that the proposed recipient provide the Company with an irrevocable Election and agreement to receive only Stock Consideration (and the right, if any, to receive cash in accordance with their termslieu of fractional shares pursuant to Section 4.3(h)) in the Merger, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except contain a 5-year vesting schedule that will not accelerate as set forth in Section 5.01(l) a result of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries toMerger, (iB) materially amend any currently for actions necessary to satisfy existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently contractual obligations under Company Compensation and Benefit Plans existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, takethis Agreement, or agree or commit (C) to take, any action that would, or is reasonably likely to, make any representation or warranty comply with Section 409A of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfiedCode;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Equifax Inc)
Interim Operations. Except The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Law, (a) the business of the Company and its Subsidiaries shall be conducted in the ordinary and usual course, (b) each of the Company and its Subsidiaries shall use its commercially reasonable efforts to preserve its business organizations and assets intact and maintain its rights, franchises, powers and privileges and its existing relations and goodwill with Governmental Authorities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of the Company and its Subsidiaries’ present employees and agents, and (c) subject to Section 5.10, the Company and its Subsidiaries shall take no action that would reasonably be expected to adversely affect or materially delay the ability of the Company to obtain any necessary approvals of any Regulatory Authorities or other Governmental Authority required for the transactions contemplated hereby, to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement or as required by Law, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, not and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.:
Appears in 1 contract
Interim Operations. Except (a) Versum covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 7.1(a) of the Company Versum Disclosure Schedule or as consented to in writing by ParentLetter, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(ai) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in all material respects in the ordinary course of business Ordinary Course and (ii) to the Company extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve their business organizations intact their current business organizationsand maintain existing relations and goodwill with Governmental Entities, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisersdistributors, distributors creditors, lessors, Employees and other material third parties having business dealings with them associates and to preserve keep available the goodwill services of their respective businesses;its and its Subsidiaries’ present officers, Employees and agents, except as otherwise expressly contemplated by this Agreement.
(b) Without limiting the Company generality of and in furtherance of Section 7.1(a), from the date of this Agreement until the Effective Time, except as otherwise (w) expressly contemplated by this Agreement, (x) required by applicable Law, (y) as approved in writing by Parent (which approval shall notnot be unreasonably withheld, conditioned or delayed) or (z) set forth in Section 7.1(b) of the Versum Disclosure Letter, Versum, on its own account, shall not and shall cause its Subsidiaries not permit to:
(i) make or propose any change to Versum’s Organizational Documents or, except for amendments that would both not materially restrict the operations of Versum’s businesses and not reasonably be expected to prevent, materially delay or materially impair the ability of Versum to consummate the Transactions, the Organizational Documents of any of its 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 towith any other Person, or (iB) 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 Versum to consummate the Transactions, in each case, other than acquisitions of inventory or other goods in the Ordinary Course and transactions among Versum and its direct or indirect wholly owned Subsidiaries or among Versum’s direct or indirect wholly-owned Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize for the issuance, issuesale, deliverpledge, sell disposition, grant, transfer, lease, license, guarantee or agree or commit to issueEncumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or the capital stock of any of its Subsidiaries (other than the issuance of shares (A) by its direct or indirect wholly owned Subsidiary to it or another of its direct or indirect wholly owned Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances B) in respect of Common Shares upon the exercise of Options equity-based awards outstanding as of the date hereof; of this Agreement, or (iiC) repurchasegranted in accordance with Section 7.1(b)(xvi), redeem 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 otherwise acquire securities convertible or exchangeable into or exercisable for any shares of the such capital stock stock, or any options, warrants or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance (other equity interests than any Permitted Encumbrances) over any material portion of Versum’s and its Subsidiaries’ consolidated properties and assets that is not incurred in the Company or Ordinary Course on any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company assets or any of its Subsidiaries, except for Encumbrances (A) as that are required by this Agreementor automatically effected by Contracts in place as of the day hereof, (B) as set forth in Section 5.01(b) that do not materially detract from the value of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted assets or (C) in connection with terminating that do not materially impair the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer operations of Versum or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (ii) amend other than to or otherwise change its certificate of incorporation or bylaws or permit from Versum and any of its direct or indirect wholly owned Subsidiaries to amend its articles of incorporation, or bylaws or (iiiin accordance with Section 7.1(b)(xvi)) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, 10 million in the Company shall not, and shall not permit any of its Subsidiaries to, aggregate;
(vii) declare, set aside aside, make or pay any dividends on (whether dividend or other distribution, payable in cash, stock stock, property or other property)otherwise, or make any other distributions in with respect of, 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 modify in any material respect its dividend policy; provided, that 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;
(viii) reclassify, split, combine, subdivide or redeem, purchase (through Versum’s share repurchase program or otherwise) 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, other than with respect to (A) the capital stock or other equity interests of a direct or indirect wholly owned Subsidiary of Versum or (B) the acquisition of shares of Versum Common Stock tendered by Employees in connection with a cashless exercise of Versum Options outstanding as of the date hereof or in order to pay Taxes in connection with the exercise or vesting of Versum equity awards 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 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 the Versum 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 the Versum Disclosure Letter), (B) expenditures not in excess of $10 million (net of insurance proceeds) in the aggregate that Versum 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 Versum or to any other direct or indirect wholly owned Subsidiary of Versum, in each case in response to any unanticipated and subsequently discovered events, occurrences or developments (provided that Versum will use its reasonable best efforts to consult with Parent 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 Ordinary Course in accordance with the terms of such Contract, (B) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other non-exclusive rights under Intellectual Property owned by Versum and its Subsidiaries granted in the Ordinary Course, or (C) any agreement among Versum and its direct or indirect wholly owned Subsidiaries to the Company or to other among Versum’s direct or indirect wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(hxi) neither other than in the Company nor Ordinary Course or with respect to amounts that are not material to Versum and its Subsidiaries, taken as a whole, cancel, modify or waive any of its Subsidiaries shall adopt debts or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company claims held by it or any of its Subsidiaries (other than or waive any transaction specifically contemplated rights held by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company it or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights debts or claims (whether such rights among Versum and its direct or claims arise under a Contract indirect wholly owned Subsidiaries or otherwise)among Versum’s direct or indirect wholly owned Subsidiaries;
(jxii) the Company shall notsettle or compromise, and shall not permit or offer or propose to settle or compromise any of its Subsidiaries tomaterial Proceeding, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shallincluding before a Governmental Entity, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases except in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as parameters set forth in Section 5.01(l7.1(b)(xii) of the Company Versum Disclosure ScheduleLetter; 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 any material restrictions on the business operations of Versum and its Subsidiaries or Affiliates, or, after the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, Combined Company;
(ixiii) materially amend any currently existing labor material financial accounting policies or collective bargaining agreementprocedures, memorandum or understanding, grievance settlement or any other agreement or commitment except as required by changes to or relating to any labor union, or GAAP;
(iixiv) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other material closing agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file settle any amended Tax Return, enter into any closing agreement, settle or compromise any material Tax claim, audit, assessment or liability relating to dispute materially in excess of the Company or any of its Subsidiariesamount reserved therefore, or surrender any right to claim a refund of a material amount of Taxes, except 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 exist the creation of any Encumbrance upon, any assets (tangible or intangible), product lines or businesses material to it and its Subsidiaries, taken as set forth in Section 5.01(o) a whole, including capital stock of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, except in connection with (A) sales of or take any non-exclusive licenses of the foregoing provided in the Ordinary Course, (B) sales of obsolete assets, (C) sales, leases, licenses or other similar actiondispositions of assets (not including services) with a fair market value not in excess of $15 million in the aggregate other than pursuant to Material Contracts in effect prior to the date of this Agreement, or omit entered into after the date of this Agreement in accordance with this Agreement and (D) sales among Versum and its direct or indirect wholly owned Subsidiaries or among Versum’s direct or indirect wholly owned Subsidiaries;
(xvi) except as required by the 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 the Versum Disclosure Letter or required pursuant to a Versum Benefit Plan in effect as of the date of this Agreement, Versum shall not: (A) grant any new long-term incentive or equity-based awards or amend or modify the terms of any such outstanding awards under any Versum Benefit Plan, (B) 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 Section 7.1(b)(xvi) of the Versum 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 relating to the filing of any Tax Return fund or secure the payment of any Taxamounts under any Benefit Plan, if (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 extent that Versum intends to hire an individual to replace a named executive officer of Versum, Versum shall first consult in good faith with Parent prior to, and with respect to, the hiring of such electionindividual;
(xvii) recognize any Labor Organization as the representative of any of the employees of Versum or its Subsidiaries, adoptionor become a party to, changeestablish, amendmentadopt, agreementamend, settlement, surrender, consent commence negotiations for or terminate any collective bargaining agreement or other action similar written agreement with a Labor Organization, in each case, other than in the Ordinary Course or omission would have as required by applicable Law;
(xviii) incur any Indebtedness (including the effect issuance of materially increasing 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 present or future Tax liability or materially decreasing any present or future Tax benefit Ordinary Course under Versum’s revolving credit facilities and other lines of credit existing as of the Company 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) 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), (D) Indebtedness incurred pursuant to letters of credit, performance bonds or other similar arrangements in the Ordinary Course, (E) 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, (F) Indebtedness incurred by mutual agreement of the Parties in accordance with Section 7.7 or (G) Indebtedness incurred among Versum and its direct or indirect wholly owned Subsidiaries or among Versum’s direct or indirect wholly owned Subsidiaries;
(pxix) the Company shall convene any special meeting (ior any adjournment or postponement thereof) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, Versum’s stockholders other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregateVersum Stockholders Meeting; andor
(qxx) the Company shall not, and shall not permit any of its Subsidiaries to, agree 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 Versum’s operations prior to the Effective Time. Prior to the Effective Time, Versum 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 this Agreement to the contrary, no consent of Parent or Merger Sub shall be required with respect to any matter set forth in this Section 7.1 or elsewhere in this Agreement to the extent that the requirement of such consent would, upon the advice of outside antitrust legal counsel, violate applicable Antitrust Law. 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 if such compliance would result in the violation of any rule, regulation or policy of any applicable Law.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company Seller covenants and agrees that during the period from the date of this Agreement hereof to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its SubsidiariesClosing Date, except (A) as required by this Agreementprovided herein, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted any existing contract or (C) otherwise consented to in connection writing by Purchaser, Seller shall:
3.02.01 Not (A) in any manner deal with, incur obligations with terminating respect to, or undertake any transactions relating to the Options and the Stock Plans;
(c) the Company shall not Resource Assets other than transactions (i) sellto which the Purchaser has given its prior written consent, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiarieswhich consent shall not be withheld unreasonably, (ii) amend or otherwise change its certificate in the ordinary and regular course of incorporation or bylaws or permit any business of its Subsidiaries to amend its articles of incorporationowning the Resource Assets, or bylaws or and (iii) split, combine or reclassify any shares subject to the terms and conditions of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
this Agreement; (dB) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect dispose of, encumber or relinquish the Permit or any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries part of the Company consistent with past practices);
area thereof; (eC) neither the Company nor waive, compromise or settle any of its Subsidiaries shall (i) grant right or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan claim that was not in existence would have a material adverse effect on the date hereof ownership, operation or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect value of any of the foregoingResource Assets ; or (yD) sell, lease, license or subject commit to any Lien operation, service or otherwise dispose ofrelated activity with respect to the Resource Assets , which would or agree could reasonably be expected to sellrequire expenditures (capital, lease maintenance, expense or subject to any Lien or otherwise dispose of, any of its properties or assets otherwise) in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant except emergency operations whereupon Seller shall give notice of such expenditure to existing contracts and commitments described in Section 5.01(g) Purchaser at the earliest possible time, including a statement of the Company Disclosure Scheduleamount of such expenditure and the facts which bring the expenditure within such exception), (ii) immaterial properties or assets (terminate, materially amend or immaterial portions extend any agreement materially affecting the Resource Assets without the prior consent of properties Purchaser, which consent shall not be unreasonably withheld.
3.02.02 Promptly notify Purchaser of any suit, lessor demand action, or assets described other proceeding before any court, arbitrator, or governmental agency and any cause of action which relates to Seller and/or the Resource Assets or which might result in Section 5.01(g) impairment or loss of any portion of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) Liens relating to Taxes that are not yet due and payable Resource Assets or otherwise being contested in good faith and as to which appropriate reserves have been established by might hinder or impede the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization operation of the Company Permit.
3.02.03 Make or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedulegive all notifications, the Company shall notfilings, consents or approvals from, to or with all governmental authorities, and shall not permit any will cooperate with Purchaser in obtaining the issuance, assignment or transfer, as the case may be, by each such authority of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except such permits as may be necessary for Purchaser to own and operate the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any Resource Assets following the consummation of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and transactions contemplated in this Agreement; provided that Seller shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change to incur any expense in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoingconnection therewith.
Appears in 1 contract
Interim Operations. (a) Except as otherwise contemplated required by applicable Law or as expressly provided by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by ParentAgreement, the Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) Acceptance Time, the business of it and operations its Subsidiaries shall be conducted in all material respects in the ordinary and usual course and it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the material components of their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, clients, suppliers, licensees, licensors, partners, creditors and lessors, key employees and independent contractors, material service providers, agents and business associates and other Persons with which it or any of its Subsidiaries has significant business relations and keep available the services of its and its Subsidiaries’ present officers and key employees and independent contractors; provided, however, that the Company and its Subsidiaries shall be conductedunder no obligation to and shall not, without Parent’s prior written consent, put in place any new retention programs or include additional personnel in any existing retention programs. Without limiting the generality of the immediately preceding sentence, from the date of this Agreement until the Acceptance Time, except (A) as otherwise expressly required by this Agreement, (B) with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed) or (C) as set forth on Section 6.1(a) of the Company Disclosure Schedule, the Company will not and the books and records will not permit its Subsidiaries to:
(i) adopt or propose any change or amendment (whether by merger, consolidation or otherwise) to its certificate of incorporation or bylaws or other similar governing documents of the Company and its Subsidiaries;
(ii) merge or consolidate the Company or any of its Subsidiaries shall with any other Person, except for any such transactions solely among wholly owned Subsidiaries of the Company not in violation of any instrument binding on the Company or any of its Subsidiaries and that would not reasonably be maintained, only expected to result in a material increase in the ordinary course net Tax liability of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizationsSubsidiaries, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businessestaken as a whole;
(biii) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issuesale, deliverpledge, sell disposition, grant, transfer, lease, license, guarantee or agree or commit to issueencumbrance of, sell or deliver any (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any A) shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (includingother than (1) the issuance, without limitationsale, 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 (2) the issuance or transfer of Shares pursuant to awards outstanding as of the date of this Agreement under, and as required by the terms of the Stock Plans as in effect as of the date of this Agreement), (B) securities convertible into or exercisable, exchangeable foror redeemable for any shares of such capital stock, or any options, warrants, calls, commitments warrants or other rights of any kind to acquire, acquire any shares of such capital stock or such convertible, exercisable, exchangeable or redeemable securities, or (C) any Voting Debt;
(iv) declare, authorize, set aside, make or pay any dividend or other equity interests distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any Subsidiary of the Company to the Company or to a wholly owned Subsidiary of the Company) or enter into any Contract with respect to the voting of its capital stock;
(v) adjust, reclassify, split, combine or subdivide, 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) acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, any assets, securities, properties, interests, or businesses or make any investment (whether by purchase of stock or securities, contributions to capital, loans to, or property transfers), except for the capital expenditures contemplated by (ix) below, in each case, other than (A) acquisitions of supplies, equipment, inventory, third party Software and capital in the ordinary course of business consistent with past practice (it being understood and agreed that the acquisition of all or substantially all of the assets of any Person is not in the ordinary course of business consistent with past practice), or (B) acquisitions with a value or purchase price (including the value of assumed liabilities) not in excess of $100,000 in any transaction or related series of transactions or $400,000 in the aggregate;
(vii) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned Subsidiary of its Subsidiaries); the Company) except for such advances incurred in the ordinary course of business consistent with past practice not to exceed $500,000 in the aggregate;
(viii) incur, alter, amend or (iii) amendmodify any indebtedness or guarantee indebtedness of another Person, modify or waive issue or sell any term of debt securities or warrants or other rights to acquire any outstanding debt security of the Company or any of its Subsidiaries, except for the incurrence of indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $25,000 in the aggregate;
(ix) make or authorize any capital expenditures;
(x) make any material changes with respect to accounting policies or procedures, except as required by changes in applicable GAAP;
(xi) subject to Section 6.10, release, assign, compromise, discharge, waive, settle or satisfy any Action (including any Action relating to this Agreement, the Offer or the Merger) or other rights, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) other than releases, assignments, compromises, discharges, waivers, settlements or satisfactions where the payments not covered by insurance do not exceed $850,000 in the aggregate or providing for any relief other than monetary relief (except for confidentiality, non-disparagement, releases, agreements not to ▇▇▇ and other similar provisions in a settlement agreement);
(xii) (A) as required by this Agreementamend or modify, in any material respect, or terminate any Material Contract, material lease for Leased Real Property or material Company Permit, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedulewaive, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans release or the agreements pursuant to which such Options were granted assign any material rights or material claims under any Material Contract or (C) except in connection the ordinary course of business consistent with terminating past practice enter into any Contract that would have been a Material Contract had it been entered into prior to the Options and the Stock Plansexecution of this Agreement;
(cxiii) the Company shall not (i) sellmake any Tax election, transfer materially amend any Tax Return, settle or pledge, finally resolve any controversy or agree to sell, transfer or pledge, change any equity interest owned by it in any method of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockTax accounting;
(dxiv) (A) grant to any third Person any license, sublicense, covenant not to ▇▇▇, immunity, authorization, release or other than quarterly dividends not right with respect to any material Intellectual Property; (B) assign or transfer to any third Person any material Intellectual Property; or (C) abandon any material Company Registered Intellectual Property Rights, in excess each case except as in the ordinary course of $0.075 per Common Share declared and paid business consistent with past practices, practice;
(xv) terminate any executive officers or hire any new employees unless such hiring is in the Company shall not, and shall not permit any ordinary course of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company business consistent with past practices)practice;
(exvi) neither adopt, enter into, amend, terminate or extend any Collective Bargaining Agreement;
(xvii) except as required pursuant to existing written, binding agreements in effect prior to the Company nor any date of its Subsidiaries shall this Agreement, or as otherwise required by applicable Law, (iA) grant or agree provide any severance or termination payments or benefits to any increase in any manner the compensation or benefits of any current or former director, officer or employeeor, except increases other than in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(eemployees (who are not officers) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, (B) increase the compensation, bonus or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedulepension, as may be required to comply with applicable Law and as provided welfare, severance, change-in-control or otherwise contemplated in this Agreement (includingother benefits of, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required bybonus to, any Benefit Plan or other 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;
(f) the Company shall notor, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess practice, non-officer employee of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as other than, in the case of non-officer employees, base salary increases or bonuses awarded in the date hereof, except as may be required as a result ordinary course of a change in applicable Law or in GAAP;
business consistent with past practice (n) the Company shall not, and which bonuses shall not permit any of its Subsidiaries toexceed $10,000 in the aggregate), take, or agree or commit to take, any action that would, or is reasonably likely to, (C) make any representation new equity-based awards to any director, officer or warranty non-officer employee of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, (D) establish, adopt, enter into amend or surrender terminate any right Company Benefit Plan or amend the terms of any outstanding equity-based awards, (E) take any action to claim a refund accelerate the vesting or payment, or fund or in any other way secure the payment, of Taxescompensation or benefits under any Company Benefit Plan, to the extent not already provided in any such Company Benefit Plan, (F) materially 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, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiariesmay be required by GAAP, or take (G) forgive any other similar actionloans to directors, officers or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit key employees of the Company or any of its Subsidiaries;
(pxviii) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of reclassify any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations independent contractor as an employee of the Company or any of its Subsidiaries resulting from unless the Company reasonably believes that such amendmenta change is advisable in order to comply with applicable law;
(xix) fail to use commercially reasonable efforts to renew or maintain the Insurance Policies or comparable replacement policies, modification other than in the ordinary course of business consistent with past practice;
(xx) enter into any new line of business;
(xxi) adopt, enter into or supplement effect any plan of complete or partial liquidation, dissolution, reorganization or restructuring;
(xxii) take any action that would, or would exceed $25,000 per annum be reasonably likely to, individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate, prevent, materially delay or materially impede the consummation of the Offer, the Merger or the other transactions contemplated by this Agreement; andor
(qxxiii) the Company shall notagree, and shall not permit any of its Subsidiaries toauthorize, agree propose, commit or commit announce an intention to do any of the foregoing.
(b) Nothing contained in Section 6.1(a) shall give to Parent or Acquisition Sub, directly or indirectly, rights to control or direct the Company’s operations prior to the Acceptance Time in violation of applicable Law. Prior to the Acceptance Time, the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its operations and shall not be required to obtain consent of Parent if it reasonably believes that doing so would violate applicable Law.
Appears in 1 contract
Interim Operations. Except (a) After the date of this Agreement and prior to the Effective Time, except as (w) required by applicable Law or by a Governmental Entity, (x) otherwise expressly contemplated by this Agreement or as Agreement, (y) otherwise set forth in Section 5.01 6.1(a) of the Company Disclosure Schedule Letter or as consented to (z) Parent shall approve in writing by Parent(such approval not to be unreasonably withheld, delayed or conditioned), the Company covenants shall use reasonable best efforts to cause the business of it and agrees its Subsidiaries to be conducted in the ordinary course and, to the extent consistent therewith, it shall use reasonable best efforts to preserve its business organization and that during of its Subsidiaries intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, employees and business associates. Without limiting the period generality of the foregoing and in furtherance thereof, from the date of this Agreement to until the Effective Time Time, except as (A) required by Law or until termination of by a Governmental Entity, (B) otherwise expressly contemplated by this Agreement Agreement, (C) as set forth in accordance with Article 7 hereof):
(aSection 6.1(a) the business and operations of the Company Disclosure Letter or (D) Parent shall approve in writing (such approval not to be unreasonably withheld, delayed or conditioned), the Company will not and will cause its Subsidiaries shall be conductednot to:
(i) adopt any change in its certificate of incorporation or by-laws or other applicable governing instruments;
(ii) merge or consolidate with any other Person or restructure, and the books and records of reorganize or completely or partially liquidate the Company and or any of its Subsidiaries shall be maintainedSubsidiaries;
(iii) acquire (including by merger, only in consolidation or acquisition of equity interests or assets or any other business combination) (A) any corporation, partnership, other business organization or division thereof or (B) any assets outside of the ordinary course of business and from any other Person in any transaction or series of related transactions (in the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizationscase of clause (B), keep available for consideration in excess of $5 million in the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesaggregate);
(biv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the Company shall notissuance, and shall not permit any of its Subsidiaries tosale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, (ix) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (includingother than (A) the issuance of Shares upon the exercise of Company Options outstanding on the date hereof or the vesting of Company Restricted Stock (and dividend equivalents thereon, without limitation, securities exchangeable forif applicable) outstanding on the date hereof, or (B) the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary), (y) securities convertible or exchangeable into or exercisable for any shares of such capital stock or other equity interests, or (z) any options, warrants, calls, commitments warrants or other rights of any kind to acquire, acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) make any loans, advances or capital contributions to or investments in any Person (other equity interests than among the Company and any direct or indirect wholly owned Subsidiary of the Company) in excess of $1,000,000 in the aggregate;
(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 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 and except for quarterly dividends paid by the Company to holders of Shares consistent with past practice and not in excess of $0.05 per Share) or enter into any agreement with respect to the voting of its capital stock;
(vii) 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 (other than the acquisition of any Shares tendered by current or former employees or directors in order to pay Taxes in connection with the exercise of Company Options or the vesting of Company Restricted Stock);
(viii) add an employer stock investment option to any Benefit Plan intended to be qualified under Section 401(a) of the Code or permit any participant in any such Benefit Plan to direct the investment of his or her plan account in employer securities within the meaning of Section 407(d) of ERISA;
(ix) incur, assume or otherwise become liable for any Indebtedness for borrowed money or guarantee such Indebtedness of another Person (other than of the Company or any wholly owned Subsidiary of its Subsidiariesthe Company); , or (iii) amend, modify issue or waive sell any term of debt securities or warrants or other rights to acquire any outstanding debt security of the Company or any of its Subsidiaries, except (A) as required by this for Indebtedness pursuant to the Second Amended and Restated Credit Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Scheduledated August 4, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases 2011 borrowed in the ordinary course of business consistent and in a net amount not to exceed $40 million (including letters of credit pursuant thereto);
(x) make any capital expenditures in excess of $1,000,000 in the aggregate, except as included as a line item in the Company’s 2013 capital budget, with past practicerespect to the 2013 fiscal year, increases or in the 2014 capital budget, with respect to the 2014 fiscal year (true and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(ecorrect copies of which have been made available to Parent) of the Company Disclosure Schedule and except for expenditures related to operational emergencies solely to the extent necessary to restore and resume ordinary course operations and functions disrupted as a result of such operational emergency;
(xi) make any material changes with respect to accounting policies or procedures, except as required by changes in connection with accelerating GAAP, or the vesting schedules of the Options and terminating the Options and the Stock Plansinterpretation thereof, or by a Governmental Entity;
(iixii) enter into settle, release, waive or compromise any new claim or materially amend obligation (whether absolute, accrued, contingent or otherwise) or any existing Contract, transaction, commitment pending or arrangement with any current threatened Action by or former director, officer, employee or affiliate of before a Governmental Entity against the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness claim, obligation or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets Action that would not result in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of liability for the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices an amount in excess of $500,000 individually or $1 million in the aggregate;
aggregate (k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(mnet of applicable insurance proceeds after payment of deductibles) the Company shall not, and shall that does not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in otherwise impose any material respect at, obligations or as of any time prior to, restrictions on the Effective Time business or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit operations of the Company or any of its Subsidiaries;
(pxiii) other than to the extent required by Law, make or change any material Tax election;
(xiv) 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, including capital stock of any of its Subsidiaries, other than inventory, supplies and other assets (including with respect to Intellectual Property, which shall be governed solely under Section 6.1(a)(xvii)) in the ordinary course of business or pursuant to Contracts in effect prior to the date of this Agreement (true and correct copies of which, subject to redactions, have been provided to Parent);
(xv) except as required pursuant to the terms of any Benefit Plan set forth on Section 5.1(h)(i) of the Company shall Disclosure Letter, (iA) use its commercially reasonable efforts togrant or provide any severance or termination payments or benefits to any employee, director or other individual service provider, (B) grant any new equity-based awards (including any phantom stock award) to any employee or accelerate the vesting of any award under the Stock Plan, (C) materially increase the compensation of any employee, director or other individual service provider, other than routine salary increases for non-officer employees in the ordinary course of business consistent with past practice (with respect to both timing and amount), (D) establish, adopt, terminate or amend any Benefit Plan (other than routine changes to welfare plans or except to the extent that such amendment would not result in more than a de minimis increase to the cost to the Company under such arrangement or plan) or (E) hire any employee, director or other individual service provider with an annual base salary in excess of $175,000, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of on terms that do not provide for any Contract with any Significant Customer, payments or benefits upon termination;
(iixvi) not, and shall cause its Subsidiaries not to, (A) terminate or materially amend or modify any Material Contract or any Lease (other than, except with respect to Leases, extensions at the end of a term or on overall terms no less favorable than the terms of the existing Material Contract and for a term no longer than the existing term of such Material Contract and in no event longer than one year) or enter into a Contract that, if in effect on the date of this Agreement, would have been a Material Contract or (B) enter into any Significant CustomerContract 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 Offer, the Merger and/or the other transactions contemplated in this Agreement that would not otherwise be due;
(xvii) sell, transfer, assign, abandon or otherwise dispose of, or grant any license or sublicense with respect to, any Company Intellectual Property (other than on terms substantially equivalent to, any license granted or more beneficial on balance abandonment in the ordinary course of business consistent with past practice);
(xviii) implement any facility closings or reductions in force not in compliance with the WARN Act;
(xix) fail to maintain in full force and effect any Insurance Policy material to the operations of the business of the Company and its Subsidiaries taken as a whole;
(xx) accelerate the collection of accounts receivable or delay the payment of accounts payable or participate in any activity that would reasonably be expected to result in a temporary increase in the demand for the products offered by the Company or any of its Subsidiaries than(in each case, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements than in the aggregateordinary course of business); andor
(qxxi) the Company shall notagree, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
(b) Neither Parent, Merger Sub nor the Company shall take or permit any of their Affiliates to take any action that is reasonably likely to prevent or delay the consummation of the Offer, the Merger or the other transactions contemplated by this Agreement.
(c) Nothing contained in 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 Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 (a) Each of the Company Disclosure Schedule or as consented to in writing by Parent, Parent and the Company covenants and agrees that during as to itself and its Subsidiaries that, on and after the period date of this Agreement and prior to the Closing (unless Purchaser shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement), other than any action expressly set forth in the Restructuring Agreements, the businesses of the Company Group shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable efforts to maintain the value of its business as a going concern, preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, vendors, creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of, and in furtherance of, the foregoing, from the date of this Agreement to until the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its SubsidiariesClosing, except (A) as otherwise expressly required by this Agreement, (B) actions expressly set forth in the Restructuring Agreements, (C) as the Purchasers may approve in writing, or (D) as set forth in on Section 5.01(b) 3.2 of the Company Disclosure ScheduleLetter, in connection with accelerating the vesting schedules each of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options Parent and the Stock Plans;
(c) the Company shall not and shall not permit any member of the Parent Group to directly or indirectly:
(i1) sell, transfer adopt or pledge, or agree to sell, transfer or pledge, propose any equity interest owned by it change in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockother applicable governing instruments;
(d2) other than quarterly dividends not in excess merge or consolidate any member of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property), or make Group with any other distributions in respect ofperson, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other any such transactions among wholly owned Subsidiaries of the Company consistent with past practices)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;
(e3) neither 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 $10,000,000 in any transaction or series of related transactions;
(4) 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 (i) any member of the Parent Group (other than (x) the issuance of shares by a wholly owned Subsidiary of the Company nor to the Company or another wholly owned Subsidiary of the Company and (y) in the case of Parent, the issuance and sale of common stock of Parent with an aggregate value of $40 million or less after the final record date for the meeting to consider the Special Resolution and for which Parent uses its reasonable best efforts to limit to existing stockholders of Parent), or (ii) 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;
(5) create or incur any Lien material to the Company or any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases not incurred in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f6) the Company shall notmake any loans, and shall not permit any of its Subsidiaries toadvances, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets guarantees or capital stock contributions to or investments in any person (other equity interests ofthan, or by any other mannerwith respect to the Company, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by between or among the Company and the Company’s Subsidiaries; any of its direct or (y) establish indirect wholly owned Subsidiaries or, with respect to Parent, between or acquire (i) among Parent and any Subsidiary of its direct or indirect wholly owned Subsidiaries other than wholly-owned Subsidiaries or (iithe Company Group) Subsidiaries organized outside in excess of $5,000,000 in the United States and its territorial possessionsaggregate;
(g7) the Company shall notdeclare, and shall not permit set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its Subsidiaries tocapital stock (except, with respect to the Company, for dividends paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary or, with respect to Parent, for dividends paid by any direct or indirect wholly owned Subsidiary of Parent (xother than the Company Group) incur, assume, be responsible for to Parent or pre-pay to any Indebtedness, other direct or indirect wholly owned Subsidiary) or enter into any agreement towith respect to the voting of its capital stock;
(8) reclassify, incursplit, assumecombine, be responsible 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, except, with respect to the Company, for transactions that are solely among the Company Group or, with respect to Parent, for transactions that are solely among Parent and its Subsidiaries other than the Company Group;
(9) incur any indebtedness for borrowed money or pre-pay any Indebtednessguarantee or assume such indebtedness of another person (other than the incurrence of indebtedness or guarantee of such indebtedness, guaranteewith respect to the Company, between or among the Company and a wholly owned Subsidiary of the Company or between or among wholly owned Subsidiaries of the Company, or, with respect to Parent, between or among Parent and a wholly owned Subsidiary of Parent other than the Company Group, or agree to guaranteebetween or among wholly owned Subsidiaries of Parent other than the Company Group), any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, sell any debt securities or options, warrants or calls or other rights to acquire any debt securities security of the Company or any of its SubsidiariesGroup, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices disclosed (A) not to exceed $5,000,000 in the aggregate, or (B) guarantees incurred in compliance with this Section 5.01(j3.2 by the Company of indebtedness of wholly owned Subsidiaries of the Company;
(10) amend, modify or terminate any agreement relating to indebtedness for borrowed money, other than indebtedness permitted under this Section 3.2, except for transactions, with respect to the Company, that are solely among the Company Group or, with respect to Parent, that are solely among the Parent Group other than the Company Group;
(11) make any material changes with respect to accounting policies or procedures, except as required by changes in applicable generally accepted accounting principles;
(12) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $2,000,000 in the aggregate or any obligation or liability of the Company Disclosure Schedule Group in excess of such amount in the aggregate;
(13) materially amend, modify or terminate any contract, or cancel, modify or waive any debts or claims held by categoryit or waive any rights having in each case a value of the change in excess of $5,000,000;
(14) sell, transfer, lease, license, pledge, mortgage, assign, abandon or make allow to lapse or expire or otherwise dispose of, or encumber any commitments with respect to capital expenditures rights, licenses, assets or other planned capital expenditures other than properties, real, personal or mixed, in excess of $1,000,000 individually or $3,000,000 in the aggregate, except sales of inventory in the ordinary course of business consistent with past practices in excess and dispositions of $500,000 in the aggregateobsolete or unnecessary assets;
(k15) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not take any action or omit to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, take any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or to result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from Closing not being satisfied;
(o16) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or Tax election, change an annual accounting period with respect to Taxesperiod, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claimclaim or assessment, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiariesassessment, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future overall Tax liability or materially decreasing of any present or future Tax benefit member of the Company Group;
(17) take any action that could cause the acceleration of contingent payments (including earnouts or milestone payments, other than earnouts or milestone payments resulting solely from superior performance) under any license agreement, merger, acquisition or other similar agreements, make any discretionary change of control payments or enter into any agreement to transfer, settle or extinguish, or any transaction that would have the effect of transferring, settling or extinguishing, any indebtedness owed by Angiotech Investment Partnership (or any successor thereof) to Parent or any of its Subsidiaries;; or
(p18) the Company shall (i) use its commercially reasonable efforts toagree, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing or voluntarily take any action that would make any of the representations and warranties contained in this Agreement untrue or incorrect at Closing.
(b) Notwithstanding the foregoing, the Company and its Subsidiaries may take any of the actions identified in subsections (4), (6), (7), (8), (10), or (14) above (the “Noticed Items”) to the extent that the prohibition thereof contravenes Section 4.08 of the indentures governing the Parent Notes by constituting a consensual encumbrance or restriction on dividends or distributions, loans or advances or transfers (including sales or leases) of assets; provided, that the Company provides written notice to the Purchasers at least 5 business days notice prior to taking such action.
Appears in 1 contract
Sources: Note Purchase Agreement (Angiotech Pharmaceuticals Inc)
Interim Operations. Except After the date hereof and prior to the Closing (unless Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement or Agreement, and except as set forth in Section 5.01 required by applicable Laws), the Company shall, and the Shareholders covenant and agree to cause the Company and its Subsidiaries to, conduct the business of the Company Disclosure Schedule or as consented and its Subsidiaries in the ordinary and usual course and, to in writing by Parentthe extent consistent therewith, the Company covenants shall and agrees that during the period Shareholders shall cause the Company and the Company’s Subsidiaries to (x) use their respective reasonable best efforts to preserve the Company’s and its Subsidiaries’ business organizations intact and maintain existing relations and goodwill with all Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates, (y) keep available the services of the Company’s and its Subsidiaries’ present employees and agents and (z) make capital expenditures substantially in compliance with the Company’s 2007 budget provided to Buyer prior to the date of this Agreement and set forth on Schedule 6.1. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the Closing, except (A) as otherwise expressly contemplated by this Agreement, (B) as Buyer may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) for transactions set forth on Schedule 6.1, the Effective Time (or until termination Company will not and the Shareholders shall cause the Company and each of this Agreement in accordance with Article 7 hereof):its Subsidiaries not to:
(a) the business and operations adopt or propose any change in its certificate of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and incorporation or by laws or other material third parties having business dealings with them and to preserve the goodwill of their respective businessesapplicable governing instruments;
(b) the Company shall notmerge or consolidate with any other Person, and shall not permit 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) acquire any entity or business (including by way of its Subsidiaries tomerger, (i) authorize for issuancestock purchase, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to asset purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, ) from any other securities or any securities convertible or exercisable intoPerson, or any rights, warrants or options other than acquisitions pursuant to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding Contracts in effect as of the date hereof; of this Agreement and disclosed on the Schedules;
(iid) repurchaseissue, redeem sell, pledge, dispose of, grant, transfer, encumber, or otherwise acquire authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any Company Stock or any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable forother 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, calls, commitments warrants or other rights of any kind to acquire, acquire any Company Stock or any shares of such capital stock or other equity interests such convertible or exchangeable securities;
(e) create or incur any Encumbrance in excess of $5 million on any assets of the Company or any of its Subsidiaries); ;
(f) 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;
(iiig) amendenter into any agreement with respect to the voting of its capital stock or declare, modify set aside, make or waive pay any term non-cash dividend or other distribution, or purchase, redeem or otherwise acquire any of its capital stock payable other than in cash, with respect to any outstanding of its capital stock;
(h) reclassify, split or combine, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(i) incur any Debt (other than borrowings under the Company’s existing debt facilities in the ordinary course of business consistent with past practice) or guarantee Debt 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;
(j) enter into any Contract that would have been a Material Contract had it been entered into prior to the entering into of this Agreement;
(k) make any changes with respect to accounting policies or procedures, except (A) as required by this Agreement, (B) as set forth changes in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock PlansGAAP;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(dl) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreementsamend, bonus plans and other agreements and arrangements listed modify or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into terminate any new or materially amend any existing Material Contract, transactionor cancel, commitment modify or arrangement waive any Debts or claims held by it or waive any rights;
(m) except as set forth on Schedule 6.1(m), make any material Tax election, take any material position on any 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 current material Tax controversy;
(n) other than pursuant to Contracts in effect prior to the date of this Agreement and disclosed on the Schedules, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or former directorallow to lapse or expire or otherwise dispose of any assets, officer, employee product lines or affiliate businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $100,000 in the aggregate;
(iiio) except as set forth in Section 5.01(eon Schedule 6.1(o) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement required by applicable Law, (includingi) increase the compensation, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof bonus or amend pension or modify or terminatewelfare benefits of, or pay make any benefit that is not required bynew equity — based awards to, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth those increases in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice to employees below the Vice President level), (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 which any Benefit Plan, to the extent not already required by any such Benefit Plan;
(p) settle, or consent to any settlement of, any actions, suits, claims or proceedings against the Company or any of its Subsidiaries shall have monetary obligations in excess or any obligation or liability of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize alleging any injury or make any capital expenditures damage (other than pursuant to commitments prior to the date hereof disputes with customers or other planned capital expenditures suppliers in the ordinary course of business consistent with past practices disclosed in Section 5.01(jpractice and not exceeding $50,000 per claimant);
(q) take any action or omit to take any action that will waive, modify, compromise or extinguish any of the Company Disclosure Schedule by category) Company’s or make any commitments of its Subsidiaries’ rights with respect to capital expenditures any agreements, understandings or arrangements relating to any insurance coverage;
(r) take any action or omit to take any action that is reasonably likely to result in any of the conditions to Closing set forth in Article VII not being satisfied (other than the taking of any action required to be taken under applicable Law or the omission of any action prohibited under applicable Law);
(s) enter into, terminate, amend or modify any Contract or transaction with any Affiliate, Shareholder or other planned capital expenditures Related Party;
(t) enter into any purchase order (other than purchase orders entered into in the ordinary course of business consistent with past practices practice and in excess of an amount less than $500,000 in the aggregate;10 million); or
(ku) the Company shallagree, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
Appears in 1 contract
Sources: Stock Purchase Agreement (McJunkin Red Man Holding Corp)
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, such approval not to be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 6.1 of the Company Disclosure Schedule or Letter) and except as consented to in writing required by Parentapplicable Law, the Company covenants business of it and agrees that during its Subsidiaries shall be conducted in the period ordinary and usual course consistent with past practice 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, customers, suppliers, employees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement to until the Effective Time Time, except (i) as otherwise contemplated by this Agreement, (ii) as Parent may approve in writing (such approval not to be unreasonably withheld or until termination of this Agreement delayed), (iii) as is required by applicable Law or any Governmental Entity or (iv) as set forth in accordance with Article 7 hereof):
(a) the business and operations Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries shall be conductedto:
(A) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(B) merge or consolidate the Company or any of its Subsidiaries with any other Person, and the books and records except for any such transactions among wholly owned Subsidiaries of the Company and its Subsidiaries shall be maintainedCompany, only in or restructure, reorganize or completely or partially liquidate;
(C) acquire assets outside of the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, from any other securities Person with a value or purchase price in the aggregate in excess of $15 million in any securities convertible transaction or exercisable intoseries of related transactions, or any rights, warrants or options other than acquisitions pursuant to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding Contracts in effect as of the date hereof; of this Agreement;
(iiD) repurchaseissue, redeem sell, pledge, dispose of, grant, transfer, encumber, or otherwise acquire authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable forother than (1) the issuance of Shares upon the exercise of Company Options or (2) 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, calls, commitments warrants or other rights of any kind to acquire, 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 equity interests of than the Company or any direct or indirect wholly owned Subsidiary of the Company) in excess of $15 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 any of its Subsidiariescapital stock (except for (1) the Company’s regular annual dividend for calendar year 2007, payable in an amount not in excess of $0.35 per Share (the “2007 Regular Dividend”); provided that the record date for the 2007 Regular Dividend shall be no earlier than July 14, 2007, and that the 2007 Regular Dividend shall not be paid if the Effective Time occurs on or prior to such record date, and (iiiii) amenddividends 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;
(G) reclassify, modify split, combine, subdivide or waive redeem, purchase or otherwise acquire, directly or indirectly, any term of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than the acquisition of any outstanding Shares tendered by current or former employees or directors in connection with the exercise of Company Options);
(H) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (other than a wholly owned Subsidiary of the Company), 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 indebtedness for borrowed money incurred in the ordinary course of business;
(AI) as required by this Agreement, (B) except as set forth in the capital budgets set forth in Section 5.01(b6.1(a)(I) of the Company Disclosure ScheduleLetter, make or authorize any capital expenditure in connection with accelerating excess of $15 million in the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansaggregate;
(cJ) 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 or as required to address Option Accounting Issues;
(K) settle any litigation or other proceedings before a Governmental Entity or otherwise for an amount in excess of $10 million or any obligation or liability of the Company shall not in excess of such amount;
(iL) make or change any material Tax election or tax accounting method, or settle or compromise any material Tax liability other than in the ordinary course of business consistent with past practice;
(M) transfer, sell, transfer or lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or agree to sellotherwise dispose of any assets, transfer product lines or pledgebusinesses of the Company or its Subsidiaries, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership including capital stock of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of in each case which are material to the Company and its Subsidiaries taken as a whole, other than inventory, supplies and other assets in the ordinary course of business and other than pursuant to amend its articles Contracts in effect prior to the date of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockthis Agreement;
(dN) other than quarterly dividends not except as expressly contemplated by this Agreement, required pursuant to Benefit Plans in excess effect prior to the date of $0.075 per Common Share declared this Agreement and paid consistent with past practices, listed on the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property)Company’s Disclosure Letter, or make any other distributions in respect ofas otherwise required by applicable Law, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i1) grant or agree to provide any increase in any manner the compensation severance or termination payments or benefits of to any current or former director, officer Elected Officer or employeeemployee of the Company or any of its Subsidiaries, except increases except, in the case of employees who are not Elected Officers, in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements(2) increase the compensation, bonus plans and other agreements and arrangements listed perquisites or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with benefits payable to any current or former director, officer, Elected Officer or employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth except, in Section 5.01(e) the case of employees who are not Elected Officers of the Company Disclosure ScheduleCompany, as increases in base salary in the ordinary course of business consistent with past practice, (3) grant any equity or equity-based awards that may be required to comply with applicable Law and as provided or otherwise contemplated settled in this Agreement (includingShares, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan preferred shares 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its SubsidiariesSubsidiaries or the value of which is linked directly or indirectly, guarantee in whole or in part, to the price or value of any debt securities of othersShares, enter into any “keep well” preferred shares or other agreement to maintain any financial statement condition of another person Company securities or enter into any arrangement having Subsidiary securities, (4) accelerate the economic effect vesting or payment of any of compensation payable or benefits provided or to become payable or provided to any current or former director, Elected Officer or employee; provided that notwithstanding the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall notbe permitted, at any time prior to the Effective Time, to pay any annual or quarterly bonus earned and shall not permit determined in the ordinary course earlier than it would otherwise have been paid in order to pay such amount in the calendar year prior to the calendar year in which it would otherwise have been paid, regardless of when such bonus payments have historically been paid or (5) terminate or materially amend any of its Subsidiaries to, (i) enter intoexisting, or materially amendadopt any new, modify or supplement any Contract outside Benefit Plan (other than changes made in the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)applicable Laws, or (ii) waive, release, grant, assign, modify or transfer in either case that do not materially increase the costs of any of its material rights or claims (whether such rights or claims arise under a Contract or otherwiseBenefit Plans);
(jO) the Company shall notenter into, and shall not permit amend or extend any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof material collective bargaining agreement or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregatelabor agreement;
(kP) except to the extent necessary to take any actions that the Company shall, and shall cause its Subsidiaries to, is otherwise permitted to take pursuant to Section 6.2 (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases case only in accordance with their termsthe terms of Section 6.2), and (iv) paytake any action to render inapplicable, prior or to exempt any third party from, any standstill arrangements or the imposition provisions of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faithTakeover Statutes;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (iiQ) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not tointo, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations agreement of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements type described in the aggregateSection 5.1(r); andor
(qR) the Company shall notexcept as provided in Section 6.2 and Section 8.3(a), and shall not permit any of its Subsidiaries toagree, agree authorize or commit to do any of the foregoing.
(b) Notwithstanding anything to the contrary in the foregoing, the parties shall work together in good faith to agree upon actions intended to ameliorate, to the extent reasonably practicable, any adverse tax impact imposed under Section 409A of the Code to employees arising out of or related to Option Accounting Issues.
(c) The Company shall consult with Parent reasonably in 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 three-year operating plan, as previously provided to Parent; and in each case shall consider in good faith the reasonable recommendations of Parent in connection therewith.
(d) The Company will use its reasonable best efforts to conclude its internal investigation regarding the Company’s practices with respect to the issuance of stock options and to complete, if required, any restatement of the Company’s financial statements, in each case as promptly as reasonably practicable after the date hereof, and shall keep Parent informed, on a current basis, of the status with respect thereto and with respect to any other investigation or litigation relating directly to Option Accounting Issues.
(e) 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 respect to any criminal or regulatory investigation or action involving the Company or any of its Subsidiaries.
Appears in 1 contract
Sources: Merger Agreement (Biomet Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the (a) The Company covenants and agrees as to itself and its Subsidiaries that during the period from and after the date of this Agreement and prior to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business and and, to the extent consistent therewith, the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve their respective business organizations intact and to maintain their current existing relations and goodwill with customers, suppliers, regulators, distributors, creditors, lessors, employees and business organizationsassociates (unless Parent shall otherwise approve in writing (which approval will not be unreasonably withheld or delayed)), keep available except as otherwise expressly contemplated by this Agreement or disclosed in Section 6.1(a) of the services Company Disclosure Letter, except as required by applicable Law and except that this sentence shall not prohibit actions or omissions that would be prohibited by clauses (i) through (xv) of their current the following sentence but are not so prohibited because they are within the applicable exceptions and permissions of such clauses or are approved by Parent in writing as provided therein. In addition, the Company covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing (which approval will not be unreasonably withheld or delayed)), except as otherwise expressly contemplated by this Agreement or disclosed in Section 6.1(a) of the Company Disclosure Letter, and except as required by applicable Law:
(i) the Company shall not (A) amend its articles of incorporation or bylaws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend or distribution payable in cash, stock or property in respect of any capital stock other than regular quarterly cash dividends on the Company Shares approved by the Company’s board of directors and in an amount which is consistent with past practice; or (D) purchase, repurchase, redeem or otherwise acquire or permit any of the Company’s Subsidiaries to purchase or otherwise acquire any shares of the Company’s or any of its Subsidiaries’ capital stock or securities convertible into or exchangeable or exercisable for any shares of such capital stock;
(ii) neither the Company nor any of its Subsidiaries shall merge or consolidate with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company (or the Company and its wholly-owned Subsidiaries), or adopt a plan of liquidation, dissolution, restructuring, recapitalization or other reorganization;
(iii) neither the Company nor any of its Subsidiaries shall take any action that would prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;
(iv) neither the Company nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards of stock-based compensation or other benefits under, amend or otherwise modify, any Company Compensation and Benefit Plans or increase the salary, wage, bonus or other compensation of any directors, officers or key employees except (A) in the normal and usual course of business (which shall include normal periodic performance reviews and related Company Compensation and Benefit Plan increases and the provision of individual Company Compensation and Benefit Plans consistent with past practice for directors, officers and employees and preserve their relationships the adoption of Company Compensation and Benefit Plans for employees of new Subsidiaries in amounts and on terms consistent with their material customerspast practice); provided that in no event shall the Company (w) institute a broad based change in compensation, suppliers(x) increase or institute any new employment agreement, licensorsseverance, licenseesretention, advertisersor similar benefits, distributors (y) increase or institute any transaction or deal bonus with respect to the Merger which could result in payments upon the Merger, or (z) make grants or awards of Company Options, Company Restricted Stock or Company Awards, unless such grants or awards are consistent with past practice, approved in advance by Parent (such approval not to be unreasonably withheld or delayed), made subject to the condition, in the case of grants or awards of Company Restricted Stock, that the proposed recipient provide the Company with an irrevocable Election and other material third parties having business dealings agreement to receive only Stock Consideration (and the right, if any, to receive cash in lieu of fractional shares pursuant to Section 4.3(h)) in the Merger, and contain a 5-year vesting schedule that will not accelerate as a result of the Merger, (B) for actions necessary to satisfy existing contractual obligations under Company Compensation and Benefit Plans existing as of the date of this Agreement, or (C) to comply with them and to preserve Section 409A of the goodwill of their respective businessesCode;
(bv) neither the Company shall not, and shall not permit nor any of its Subsidiaries toshall 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 otherwise incur any Indebtedness, except for (A) Indebtedness incurred pursuant to any agreement described in Section 5.1(j)(i)(D) of the Company Disclosure Letter in the ordinary course; (B) Indebtedness for borrowed money in replacement of existing Indebtedness for borrowed money which has matured or is being refunded, so long as such replacement Indebtedness is on customary commercial terms and does not increase the principal amount of the existing Indebtedness which it replaces, (iC) authorize for issuanceIndebtedness between the Company and its wholly-owned Subsidiaries made in the ordinary course of business consistent with past practices; or (D) guarantees by the Company of Indebtedness of its wholly-owned Subsidiaries existing on the date of this Agreement or incurred in accordance with the preceding clauses (A) and (B), issueprovided that the Company shall not permit the aggregate Indebtedness of the Company and its Subsidiaries, deliverdetermined on a consolidated basis, sell at any time prior to the Effective Time to exceed $200,000,000 in the aggregate.
(vi) neither the Company nor any of its Subsidiaries shall acquire any material assets or agree a license therefor other than in the ordinary course of business consistent with past practices, or incur, make or commit to issueany capital expenditures (or any obligations or liabilities in connection therewith) other than (A) pursuant to existing Contracts or (B) in the ordinary course of business in an amount not to exceed $7,500,000 in the aggregate for the Company and its Subsidiaries in any period of 90 consecutive days beginning with the date of this Agreement;
(vii) neither the Company nor any of its Subsidiaries shall transfer, sell or deliver (whether through the issuance or granting of optionslease, commitmentslicense, subscriptionssell, rights to purchase or otherwise)mortgage, pledge pledge, place a Lien upon or otherwise encumber dispose of any shares of its capital stock property or the assets (including capital stock of any of its Subsidiaries) with a fair market value in excess of $250,000 individually, or $1,000,000 in the aggregate, except (A) for transfers, leases, licenses, sales, mortgages, pledges, Liens, or other dispositions in the ordinary course of business consistent with past practice or (B) pursuant to existing contracts or commitments;
(viii) neither the Company nor any other securities of its Subsidiaries shall issue, deliver, pledge, sell, or otherwise encumber shares of its capital stock or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such sharesshares except, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Company Shares upon the exercise of issued pursuant to Company Options and Company Awards outstanding as of on the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of this Agreement under the Company Stock Plans, awards of Company Options, Company Restricted Stock or Company Awards granted hereafter under the Company Stock Plans in accordance with and subject to the limits of Section 6.1(a)(iv) and Company Shares issuable pursuant to such Company Options and Company Awards;
(ix) neither the Company nor any of its Subsidiaries (includingshall acquire any business, without limitationcorporation, securities exchangeable forpartnership, or optionslimited liability company, warrantsjoint venture, calls, commitments or rights of any kind to acquire, capital stock association or other equity interests entity or division thereof, whether by merger, consolidation, purchase of shares, property or assets or otherwise;
(x) neither the Company nor any of its Subsidiaries shall make any material change with respect to accounting policies or procedures, except as required by changes in GAAP or by Law;
(xi) except as required by Law, neither the Company nor any of its Subsidiaries shall (A) make any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement 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 or (B) settle or resolve any material Tax controversy;
(xii) neither the Company nor any of its Subsidiaries shall enter into any line of business other than the current lines of business of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(exiii) neither the Company nor any of its Subsidiaries shall (iA) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices practice with respect to clauses (x) and (z) hereof, enter into any non-competition Contract or other Contract that (x) purports to limit in excess any material respect either the type of $500,000 business in the aggregate;
(k) which the Company shall, and shall cause or its Subsidiaries to(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, (iy) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with would reasonably be likely to require the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition disposition of any Lien material assets or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) line of business of the Company Disclosure Scheduleor its Subsidiaries or, after the Effective Time, Parent or its Affiliates, or (z) would require the Company shall notor its Subsidiaries to deal exclusively with a Person or related group of Persons, and shall not permit (B) enter into any Contract that would be considered a Company Material Contract hereunder if in effect on the date of this Agreement except in the ordinary course consistent with past practices or (C) terminate, amend, or modify in any material respect any such Contract or any Company Material Contract or waive any material right thereunder; provided, however, that neither the Company nor any of its Subsidiaries to, (ishall be deemed in breach of this Section 6.1(a) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement in the event that the Company or any other such Subsidiary shall amend or cause to be amended any employment or similar agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries is a party as of the date hereof, except as may hereof solely for the purpose of causing such agreement to be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty compliance with Section 409A of the Company contained Code (in this Agreement inaccurate in any material respect at, a manner which is designed to avoid adverse tax consequences to the employee or as of any time prior to, service provider who is party to such agreement without increasing the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating cost to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries);
(pxiv) without limiting Section 6.17(a) hereof, neither the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or nor any of its Subsidiaries than, the shall settle or offer to settle any Action on terms of such Contract prior which would be reasonably likely to the making of such amendment or modification, and have a Company Material Adverse Effect; and
(iiixv) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of neither the Company or nor any of its Subsidiaries resulting from such amendment, modification shall authorize or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit enter into any of its Subsidiaries to, agree or commit agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that from and after the date of this Agreement and prior to the Effective Time the business of Parent and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, Parent and its Subsidiaries shall use their commercially reasonable efforts to preserve their respective business organizations intact and to maintain their existing relations and goodwill with customers, suppliers, regulators, distributors, creditors, lessors, employees and business associates (unless the Company shall otherwise approve in writing (which approval will not be unreasonably withheld or delayed)), except as otherwise expressly contemplated by this Agreement or disclosed in Section 6.1(b) of the Parent Disclosure Letter, except as required by applicable Law and except that this sentence shall not prohibit actions or omissions that would be prohibited by clauses (i) through (vii) of the following sentence but are not so prohibited because they are within the applicable exceptions and permissions of such clauses or are approved by the Company in writing as provided therein. In addition, Parent covenants and agrees as to itself and its Subsidiaries that, from and after the date of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing (which approval will not be unreasonably withheld or delayed)), except as otherwise expressly contemplated by this Agreement or disclosed in Section 6.1(b) of the Parent Disclosure Letter and except as required by applicable Law:
(i) Parent shall not (A) amend its articles of incorporation or bylaws in any manner adverse to the Company or its shareholders; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock, or pay any dividend or distribution thereon in Parent stock, unless appropriate adjustment is made to the Merger Consideration pursuant to Section 4.5; or (C) declare, set aside or pay any dividend or distribution payable in cash or property in respect of any capital stock other than regular quarterly cash dividends on the Parent Common Stock or in connection with any stock repurchase program or plan approved by Parent’s board of directors (provided that repurchases prior to the Effective Time under such programs and plans on a daily basis shall not exceed in the aggregate 25% of the average daily trading volume of Parent’s shares (such daily limitation on repurchases to be calculated in accordance with and in the manner of calculation of the daily volume limits applicable under Rule 10b-18 under the Exchange Act));
(ii) neither Parent nor any of its Subsidiaries shall merge or consolidate with any other Person except for any such transactions among wholly-owned Subsidiaries of Parent (or Parent and its wholly-owned Subsidiaries) and except for acquisition transactions consummated via subsidiary merger, and except that Parent may merge or consolidate with another Person subject to (A) compliance with Section 6.1(b)(iii) and (B) the condition that if consummation of such merger or consolidation would require the approval of the shareholders of Parent and if the record date for such approval is prior to the Effective Time, Parent shall, prior to the completion of such merger or consolidation and in addition to any other approval requirements of applicable Law, have obtained the approval of any such merger or consolidation by a vote of the majority of the votes cast for or against such merger or consolidation by shares of Parent Common Stock and Company Shares, with each Company Share having a number of votes equal to the Exchange Ratio for purposes of this vote, nor shall Parent adopt a plan of liquidation or dissolution;
(iii) neither Parent nor any of its Subsidiaries shall merge, consolidate or acquire any stock or assets or a license therefor if consummation of such merger, consolidation or acquisition would reasonably be likely to prevent, impair or materially delay the ability of Parent to consummate the Merger by the Termination Date;
(iv) neither Parent nor any of its Subsidiaries shall take any action that would prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;
(v) neither Parent nor any of its Subsidiaries shall incur any Indebtedness, or issue or sell any debt securities or warrants or other rights to acquire any debt security of Parent or any of its Subsidiaries, except for (A) Indebtedness not in excess of $1,500,000,000 in the aggregate for Parent and its Subsidiaries; (B) Indebtedness for borrowed money in replacement of existing Indebtedness for borrowed money which has matured or is being refunded, so long as such replacement Indebtedness is on customary commercial terms and does not increase the principal amount of the existing Indebtedness which it replaces, (C) Indebtedness between the Company and its wholly owned Subsidiaries made in the ordinary course of business consistent with past practices; or (D) Indebtedness incurred to fund performance of Contracts identified in Section 5.2(j)(i) of the Parent Disclosure Letter; or (E) guarantees by Paren
Appears in 1 contract
Sources: Merger Agreement (Talx Corp)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company West shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws knowingly take or permit any of its Subsidiaries to amend take any action or refrain from taking any action the result of which would be reasonably expected to result in any of the closing conditions set forth in Sections 5.1 and 5.3 hereof not to be satisfied. West covenants and agrees as to itself and its articles of incorporationSubsidiaries that, after the date hereof and prior to the Effective Time, unless East shall otherwise approve in writing (such approval not to be unreasonably withheld or bylaws delayed), and except as otherwise expressly contemplated by this Agreement or (iii) splitas required by applicable Laws, combine or reclassify any shares its business and that of its capital stockSubsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries to, use their respective reasonable best efforts to preserve their business organizations intact and maintain 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 West 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 (A) as otherwise expressly required by this Agreement or applicable Laws, (B) as East may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 4.1(i) of the West Disclosure Letter, West will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments or amend any term of the Shares;
(b) merge or consolidate West or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of West that are not obligors or guarantors of third-party indebtedness, or adopt a plan of liquidation;
(c) acquire assets outside of the ordinary course of business with a value or purchase price in excess of $10,000,000 in the aggregate, other than acquisitions pursuant to Contracts to the extent in effect immediately prior to the execution of this Agreement and as otherwise set forth in Section 4.1(i)(c) of the West Disclosure Letter, and other than capital expenditures within West's capital expenditure budget as set forth in Section 4.1(i)(j) of the West Disclosure Letter;
(d) other than as set forth in Section 4.1(i)(d) of the West Disclosure Letter and other than the issuance of shares or options pursuant to West Stock Plans, West Awards, West Warrants or West Convertible Debt, 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 West or any its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of West to West 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 other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(e) other than (A) specified encumbrances described in Section 4.1(i)(e) of the West Disclosure Letter; (B) encumbrances for current Taxes or other governmental charges not yet due and payable; (C) mechanics', carriers', workmen's, repairmen's or other like encumbrances arising or incurred in the ordinary course of business consistent with past practice relating to obligations as to which there is no default on the part of West, or the validity or amount of which is being contested in good faith by appropriate proceedings; and (D) other encumbrances that do not, individually or in the aggregate, materially impair the continued use, operation, value or marketability of any West Aircraft, West Slots, West Gates or West Real Property or the conduct of the business of West and its Subsidiaries as presently conducted; create or incur any Lien material to West or any of its Subsidiaries on any assets of West or any of its Subsidiaries having a value in excess of $10,000,000;
(f) other than as set forth in Section 4.1(i)(f) of the West Disclosure Letter, make any loans, advances or capital contributions to or investments in any Person (other than West or any direct or indirect wholly-owned Subsidiary of West) in excess of $10,000,000 in the aggregate;
(g) declare, set aside or pay any dividend or distribution (whether in cash, stock or property or any combination thereof) on (i) any Shares or West Preferred Shares, or (ii) any shares of capital stock of any Subsidiary (other than wholly-owned Subsidiaries and pro rata dividends payable to holders of interests in non wholly-owned Subsidiaries);
(h) reclassify, split, combine combine, subdivide or reclassify repurchase, redeem 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;
(di) other than quarterly dividends as set forth on Section 4.1(i)(i) of the West Disclosure Letter, 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 West or any of its Subsidiaries, except for (i) indebtedness for borrowed money incurred in the ordinary course of business not to exceed $10,000,000 in the aggregate, (ii) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money on customary commercial terms, (iii) guarantees by West of indebtedness of wholly-owned Subsidiaries of West or guarantees by Subsidiaries of indebtedness of West, or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $10,000,000 of notional debt in the aggregate in addition to notional debt currently under swap or similar arrangements;
(j) except as set forth in Section 4.1(i)(j) of the West Disclosure Letter, make or authorize any capital expenditure;
(k) other than in the ordinary course of business, enter into any Contract that would have been a West Material Contract had it been entered into prior to the date of this Agreement (other than as permitted by Section 4.1(i)(d), (e), (i) or (j));
(l) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP or by applicable Law or except as West, after consultation with East and each party's independent auditors, determines in good faith is preferable;
(m) settle any litigation or other proceedings before or threatened to be brought before a Governmental Entity for an amount to be paid by West or any of its Subsidiaries in excess of $10,000,000 or which would be reasonably likely to have a material adverse impact on the operations of West or any of its Subsidiaries;
(n) other than in the ordinary course of business, (i) amend or modify in any material respect, or terminate or waive any material right or benefit under, any West Material Contract, or (ii) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $10,000,000;
(o) except as required by Law or by any currently effective tax sharing agreement listed in Section 4.1(i)(o) of the West Disclosure Letter, 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.
(p) sell, lease, license, leaseback, abandon, or otherwise dispose of any assets of West or its Subsidiaries except (i) in the ordinary course of business or obsolete assets or (ii) sales, leases, licenses, leasebacks, abandonments or other dispositions of assets with a fair market value not in excess of $0.075 per Common Share declared 10,000,000 in respect of any one asset and paid not in excess of $15,000,000 in the aggregate other than (x) as set forth in Section 4.1(i)(p) of the West Disclosure Letter and (y) any dispositions of assets to the extent used as consideration for acquisitions that are permitted pursuant to Section 4.1(i)(c);
(q) except in connection with the replacement of any existing employee, including any officer, on compensation terms that are not materially different from those of the replaced employee or officer, or except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement that have been provided to East, or except as West, based upon advice of its counsel, determines in good faith is preferable for purposes of compliance with Section 409A of the Code, or as otherwise required by applicable Law, (i) except with respect to any newly-hired employees (excluding officers), enter into any commitment to provide any severance or termination benefits to (or amend any existing arrangement with) any director, officer or employee of West or any of its Subsidiaries, (ii) increase the benefits payable under any existing severance or termination benefit policy or employment agreement, (iii) except with respect to any newly-hired employees (excluding officers), enter into any employment severance, change in control, termination, deferred compensation or other similar agreement (or amend any such existing agreement) with any director, officer or employee of West or any of its Subsidiaries, (iv) establish, adopt, amend or terminate any West Compensation and Benefit Plan, (v) increase the compensation, bonus or other benefits of, make any new awards under any West Compensation and Benefit Plan to, or pay any bonus to any director, officer, employee, consultant or independent contractor of West or any of its Subsidiaries, except for increases, new awards or payments in the ordinary course of business consistent with past practicespractice for employees who are not among West's Section 16 Officers, (vi) take any action to fund or in any other way secure the Company shall notpayment of compensation or benefits under any West Compensation and Benefit Plan, except as required pursuant to the terms thereof, (vii) take any action to accelerate the vesting or payment of any compensation or benefits under any West Compensation and shall Benefit Plans, to the extent not permit already required in any such West Compensation and Benefit Plan, (viii) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any West 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, (ix) amend the terms of any outstanding equity-based award, (x) provide for accelerated vesting, removal of restrictions or exercisability of any stock based or stock related awards (including stock options, stock appreciation rights, performance units and restricted stock units) upon a change in control occurring on or prior to the Effective Time, or (xi) enter into any new collective bargaining agreements (or material amendments to existing collective bargaining agreements);
(r) decrease or defer in any material respect the level of training provided to the employees of West or any of its Subsidiaries to, declare, set aside or pay any dividends on (whether the level of costs expended in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices)connection therewith;
(es) neither fail to keep in effect any governmental route authority in effect and used by any Subsidiary of West as of the Company nor any date of its Subsidiaries this Agreement, provided that the restrictions set forth in this Section 4.1(i)(s) shall (i) grant or agree not apply to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases such failure if such failure occurs in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(ft) the Company shall notmake any material West Route changes, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures changes in the ordinary course of business consistent with past practices disclosed practice;
(u) fail to maintain insurance at levels at least comparable to current levels or otherwise in Section 5.01(ja manner inconsistent with past practice;
(v) of the Company Disclosure Schedule by category) take any action, or make any commitments with respect fail to capital expenditures take action, which action or other planned capital expenditures other than failure could result in the ordinary course loss of business consistent West Slots with past practices an aggregate value in excess of $500,000 in the aggregate10,000,000;
(kw) fail to notify East in writing of any incidents or accidents occurring on or after the Company shalldate hereof involving any property owned or operated by West that resulted or could reasonably be expected to result in damages or losses in excess of $10,000,000;
(x) fail to continue, and shall cause its Subsidiaries toin respect of all West Aircraft, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are all material maintenance programs consistent with the Company’s and its Subsidiaries’ past practicespractice (except as required or permitted by applicable Law), (ii) use including using reasonable best efforts not to permit any insurance policy naming it keep all such West Aircraft in such condition as beneficiary or loss payable payee may be necessary to enable to airworthiness certification of such West Aircraft under the Federal Aviation Act to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them maintained in good faithstanding at all times;
(ly) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
(ii) East shall not knowingly take or permit any of its Subsidiaries to take any action or refrain from taking any action the result of which would be reasonably expected to result in any of the closing conditions set forth in Sections 5.1 and 5.2 not to be satisfied. East covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time, unless West shall otherwise approve in writing (such approval not to be unreasonably withheld or delayed), and except as otherwise expressly contemplated by this Agreement or as required by applicable Laws, its business and that of its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries to, use their respective reasonable best efforts to preserve their business organizations intact and maintain 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 East 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 (A) as otherwise expressly required by this Agreement or applicable Laws, (B) as West may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 4.1(ii) of the East Disclosure Letter, East will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments or amend any term of the East Common Stock;
(b) merge or consolidate East or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of East that are not obligors or guarantors of third-party indebtedness, or adopt a plan of liquidation;
(c) acquire assets outside of the ordinary course of business with a value or purchase price in excess of $10,000,000 in the aggregate, other than acquisitions pursuant to Contracts to the extent in effect immediately prior to the execution of this Agreement and as otherwise set forth in Section 4.1(ii)(c) of the East Disclosure Letter, and other than capital expenditures within East's capital expenditure budget as set forth in Section 4.1(ii)(j) of the East Disclosure Letter;
(d) other than as set forth in Section 4.1(ii)(d) of the East Disclosure Letter and other than the issuance of shares or options pursuant to stock-based benefit plans and under individual employment agreements to which East is a party, 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 East or any its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of East to East 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, redemptio
Appears in 1 contract
Interim Operations. Except as otherwise (x) required by applicable Law, (y) expressly contemplated or required by this Agreement or (z) set forth in Section 6.1 of the Company Disclosure Letter, the Company Parties covenant and agree that, from and after the execution and delivery of this Agreement and prior to the Company Merger Effective Time, except with the prior written consent of Parent (which consent is not to be unreasonably withheld, conditioned or delayed), each of the Company Parties shall, and shall cause their Subsidiaries to, conduct their business in the ordinary course and shall, and shall cause their Subsidiaries to, use their respective commercially reasonable efforts to (1) preserve their business organizations intact and (2) maintain existing relations and goodwill with Governmental Entities and customers, suppliers, employees and business associates.
(a) Without limiting the generality of the foregoing and in furtherance thereof, from and after the execution and delivery of this Agreement until the Company Merger Effective Time, except as (x) required by applicable Law, (y) expressly contemplated or required by this Agreement, or (z) as set forth in the relevant subsection of Section 5.01 6.1 of the Company Disclosure Schedule Letter (it being understood and hereby agreed that if any action is expressly permitted by any of the following subsections such action shall be expressly permitted under the first sentence of Section 6.1), except with the prior written consent of Parent (which consent not to be unreasonably withheld, conditioned or as consented to in writing by Parentdelayed), the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations none of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business Parties will and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall Parties will not permit any of its their Subsidiaries to, :
(i) adopt any change in the Company's certificate of incorporation or bylaws or DPA's limited liability company agreement, or adopt any material change in the applicable governing instruments of any of their Subsidiaries;
(ii) merge or consolidate with any other Person or restructure, reorganize or completely or partially liquidate, except for (A) the Mergers or (B) any such transaction between wholly owned Subsidiaries of the Company Parties, or between any wholly owned Subsidiary of the Company Parties and the Company Parties, unless reasonably objected to by Parent following consultation;
(iii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) (x) any corporation, partnership or other business organization or (y) any assets from any other Person (excluding ordinary course purchases of goods, products and off-the-shelf Intellectual Property), except, following reasonable advanced consultation with Parent, where the consideration in such transaction is not in excess of $2,000,000 individually or $5,000,000 in the aggregate;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize for the issuance, issuesale, deliverpledge, sell disposition, grant, transfer, or agree or commit to issueencumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or equity interests or the capital stock or equity interests of any of its Subsidiaries, any Subsidiaries (other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents than (including, without limitation, stock appreciation rights or phantom interests), except for issuances A) the issuance of Common Class A Shares upon the exercise of Company Options and settlement of Company RSAs and Director RSAs in accordance with the Stock Plan, in each case that are outstanding as of the date hereof; (ii) repurchase, redeem hereof or otherwise acquire any shares of that are issued after the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by date hereof in compliance with this Agreement, (B) the issuance of Class A Shares pursuant to that certain Exchange Agreement dated as set forth in Section 5.01(bof October 3, 2007, as amended through the date hereof, by and among the Company Parties and certain unitholders of DPA (the “Exchange Agreement”), (C) between wholly owned Subsidiaries of the Company Disclosure Schedule, in connection with accelerating the vesting schedules Parties or between a wholly owned Subsidiary of the Options Company Parties and a Company Party), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, stock units, stock awards, warrants or other rights of any kind to acquire any shares of such capital stock, equity interests, convertible or exchangeable securities;
(v) make any loans, advances or capital contributions to or investments in any Person (other than the extent required by Company Parties or any direct or indirect wholly owned Subsidiary of the Stock Plans Company Parties) other than in the ordinary course of business consistent with past practice (including business expense advances to employees) in amounts not in excess of $750,000;
(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 capital stock or equity interests (except for (A) regular quarterly cash dividends at a rate not in excess of $0.09 per Class A Share and $0.09 per New Class A Unit, with record dates and payment dates consistent with the agreements prior year, (B) tax distributions not in excess of those provided for pursuant to which such Options were granted Section 4.4 of the limited liability company agreement of DPA or (C) in connection with terminating the Options and the Stock Plans;
(c) dividends paid by any direct or indirect wholly owned Subsidiary to the Company shall not (i) sell, transfer Parties or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion direct or indirect wholly owned Subsidiary) or enter into any agreement with respect to the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares voting of its capital stock;
(dvii) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practicesreclassify, the Company shall notsplit, and shall not permit any of its Subsidiaries tocombine, declaresubdivide or redeem, set aside purchase or pay any dividends on (whether in cashotherwise acquire, stock directly or other property), or make any other distributions in respect ofindirectly, any of its capital stock or equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or equity interests (except for dividends paid by direct or indirect wholly owned Subsidiaries to other than the Company or to other wholly owned Subsidiaries acquisition in the ordinary course of the Company business consistent with past practicespractice of any Class A Shares tendered by current or former Service Providers in connection with the cashless exercise of Company Options or in order to pay Taxes in connection with the exercise of Company Options or the vesting of Company RSAs and Director RSAs or in connection with any obligation under the Exchange Agreement);
(eviii) neither incur any Indebtedness for borrowed money or guarantee such Indebtedness of another Person (other than a wholly owned Subsidiary of the Company nor Parties), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company Parties or any of its their Subsidiaries, in each case other than (A) in the ordinary course of business consistent with past practice with a face value or principal amount not in excess of $2,500,000 in the aggregate, or (B) in the ordinary course under letters of credit, lines of credit or other credit facilities or arrangements in effect on the date hereof so long as the total Indebtedness incurred under all such letters of credit, lines of credit or credit facilities does not exceed $50,000,000 in the aggregate;
(ix) make or authorize any capital expenditures in excess of $500,000 individually or $1,500,000 in the aggregate, other than any capital expenditure (or series of related capital expenditures) consistent in all material respects with the 2013 capital expenditure budget of the Company Parties and their Subsidiaries shall in effect on the date of this Agreement (ia copy of which has been previously provided to Parent);
(x) grant 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 by a Governmental Entity;
(xi) compromise, settle or agree to settle any claims (A) involving amounts in excess of $250,000 individually or $1,000,000 in the aggregate, except to the extent reflected or reserved against in the Company's consolidated balance sheet as of September 30, 2012 included in the Company Reports in respect of the claim being settled or (B) that would impose any material non-monetary obligations on the Company Parties or their Subsidiaries or Affiliates that would continue after the Company Merger Effective Time;
(xii) make any material Tax election, file any material amended Tax Return, settle or compromise any material Tax liability, enter into any closing agreement with respect to any material Tax or surrender any right to claim a material Tax refund;
(xiii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire, ▇▇▇▇▇ ▇ ▇▇▇▇ (other than a Permitted Lien) on or otherwise dispose of any assets, properties or rights of the Company Parties or their Subsidiaries, including capital stock of any of their Subsidiaries that are material to the Company Parties and their Subsidiaries, taken as a whole, except (A) in the ordinary course of business consistent with past practice or (B) Liens granted in connection with any indebtedness permitted under this Section 6.1;
(xiv) except as required under applicable Law or the terms of any Benefit Plan in effect as of the date hereof (A) grant, provide or increase (or commit to grant, provide or increase) any severance or termination payments or benefits to any current or former Service Provider who is or was an executive officer, a director or other Service Provider earning annual compensation (base salary and incentive opportunities) in excess of $750,000 (any such Service Provider, a “Material Service Provider”), grant or provide for (or commit to grant or provide for) any severance or termination payments or benefits to any other current or former Service Provider other than in the ordinary course of business consistent with past practice or increase (or commit to increase) any severance or termination payments or benefits; (B) increase in any manner the compensation or benefits of any current or former director, officer or employeeService Provider, except (x) for increases in base salary in the ordinary course where the aggregate increase does not exceed 4.5% percent of the aggregate annualized salaries in 2012 and (y) the payment of bonuses for the 2012 performance year in the ordinary course of business and, with respect to Material Service Providers consistent with past practice, and otherwise in the aggregate consistent with past practice, and not in excess of the amounts set forth in Section 6.1(a)(xiv) of the Company Disclosure Letter; (D) become a party to, establish, adopt, terminate, materially amend (or commit to become a party to, establish, adopt, terminate, or materially amend) any Benefit Plan or arrangement that would have been a Benefit Plan if in effect on the date hereof (other than routine changes to welfare plans) or accelerate the vesting of, or lapse of restrictions on, any compensation for the benefit of any current or former Material Service Provider; (E) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan; or (F) terminate the employment or services of any Material Service Provider other than for cause, or hire any Person that would reasonably be expected to be a Material Service Provider;
(xv) abandon, convey title (in whole or in part), exclusively license or grant any right or other licenses to material Intellectual Property owned or exclusively licensed to the Company Parties or any of their Subsidiaries, or enter into licenses or agreements that impose material restrictions upon the Company Parties or any of their Subsidiaries with respect to its or their use of material Intellectual Property owned by any third party, in each case other than in the ordinary course of business consistent with past practice;
(A) except in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements(1) modify or amend, bonus plans and or voluntarily or prematurely terminate, any Material Contract (other agreements and arrangements listed than extensions at the end of term that do not materially modify or described in Section 5.01(e) amend the terms of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Planssuch Contract or modifications or amendments to reflect actual services performed), (ii2) enter into any successor agreement to an expiring Material Contract that materially modifies or amends the terms of such expiring Material Contract or (3) enter into any new agreement that would have been considered a Material Contract if it were entered into at or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required prior to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof other than any such Contracts that may be cancelled, terminated or amend withdrawn without material liability to the Company Parties or modify their Subsidiaries upon notice of 90 days or terminateless or (B) enter into any new agreement that would have been considered a Material Contract pursuant to clause (B), (I), (O) or pay any benefit that is not required by, any Benefit Plan (Q) of Section 5.1(q) if it were entered into at or other 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 prior to the date hereof;
(fxvii) fail to maintain in full force and effect material insurance policies covering the Company shall notParties and their Subsidiaries and their respective properties, assets and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) businesses in a form and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business amount consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);practice; or
(jxviii) the Company shall not, and shall not permit any of its Subsidiaries toagree, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
(b) Each of the Buyer Parties agrees that, from and after the execution and delivery of this Agreement and until the Company Merger Effective Time, it shall not consummate or agree to consummate any purchase or other acquisition of any assets, licenses, operations, rights or businesses (other than as expressly contemplated by this Agreement) that, individually or in the aggregate with any other such purchase or acquisition, is reasonably likely to (i) prevent or materially delay from obtaining any consents, registrations, approvals, permits or authorizations required to be obtained from any Governmental Entity in connection with the consummation of the Mergers and the other transactions contemplated hereby, (ii) result in the imposition of a condition or conditions on any such consents, registrations, approvals, permits or authorizations, or (iii) otherwise prevent or materially delay any party hereto from performing its obligations hereunder or consummating the Mergers and the other transactions contemplated hereby.
(c) Nothing contained in this Agreement is intended to give any Buyer Party, directly or indirectly, the right to control or direct the Company Parties' or their Subsidiaries' operations prior to the Company Merger Effective Time, and nothing contained in this Agreement is intended to give the Company Parties or their Subsidiaries, directly or indirectly, the right to control or direct the Buyer Parties' operations. Prior to the Company Merger Effective Time, each of the Buyer Parties and the Company Parties shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries' respective operations.
(d) Unless otherwise agreed by the parties hereto, following the date hereof and prior to the Closing Date, the Company shall use commercially reasonable efforts to make available to Parent:
(i) an estimate of the amounts potentially payable to each Service Provider under any Benefit Plan in connection with the execution and delivery of this Agreement, the adoption of this Agreement by holders of shares constituting the Company Requisite Vote or the consummation of the transactions contemplated hereby (either alone or in conjunction with any other event, including as a result of a termination of employment or service), including the amount of any “excess parachute payments” within the meaning of Section 280G of the Code and any excise tax gross-up that could become payable under any Benefit Plans;
(ii) complete and correct copies of each Lease; and
(iii) true and complete current copies of all material Benefit Plans and, where applicable, (A) the most recently prepared actuarial report or financial statement with respect thereto, (B) the most recent summary plan description, and all material modifications thereto with respect thereto, (C) the most recent annual report (Form 5500 Series) and accompanying schedule with respect thereto, (D) the most recent determination letter with respect thereto, (E) copies of any material written correspondence with a Governmental Entity with respect thereto and (F) any related funding arrangements with respect thereto.
Appears in 1 contract
Interim Operations. Except (a) The Company covenants and agrees that, after the date hereof until the Effective Time (unless Parent shall otherwise approve in writing), and except as otherwise contemplated expressly permitted by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to required in writing by Parenta Governmental Entity (including Gaming Authorities) of competent jurisdiction or required by applicable Laws (including Gaming Laws), the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company it shall and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conduct their businesses in all material respects in the ordinary course of business and and, to the extent consistent with the foregoing, the Company and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve intact their current business organizationsorganizations substantially intact, maintain satisfactory relationships with customers and suppliers having business dealings with them, maintain the effectiveness of the Company’s Licenses and keep available the services of their current officers key employees. Without limiting the generality 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 delayed, withheld or conditioned) (C) as required in writing by a Governmental Entity (including Gaming Authorities) of competent jurisdiction or required by applicable Laws (including Gaming Laws) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve will cause its Subsidiaries not to:
(i) adopt any change in the goodwill certificate of their respective businessesincorporation or bylaws of the Company;
(bii) merge or consolidate the Company shall not, and shall not permit or any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, with any other securities Person;
(iii) make any acquisition of all or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares substantially all of the capital stock or assets of any other equity interests Person, whether by way of stock purchase, asset purchase, merger or otherwise (other than formation of new wholly-owned Subsidiaries), or of any other assets of any other Person for which the fair market value of the total consideration paid by the Company and its Subsidiaries exceeds $250,000 individually or $500,000 in the aggregate;
(iv) issue, sell, deliver, pledge, dispose of, grant, transfer, lease, license, guarantee or encumber, or authorize the issuance, sale, delivery, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock or voting debt of the Company or any of its Subsidiaries (including, without limitation, other than (A) upon conversion of Preferred Stock outstanding as of the date hereof in accordance with the terms thereof and (B) the issuance of shares or other equity securities exchangeable forby a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company), or securities convertible or exchangeable into or exercisable for any shares of such capital stock or voting debt, or any options, warrants, calls, commitments warrants or other rights of any kind to acquire any shares of such capital stock voting debt or such convertible or exchangeable securities, or stock appreciation rights;
(v) except for dividends in respect of the Preferred Stock required to be paid or accrued in accordance with the Company’s certificate of incorporation and the certificates of designations thereof, declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except dividends paid by any direct or indirect wholly-owned Subsidiary of the Company);
(vi) except for transactions among the Company and its direct or indirect wholly-owned Subsidiaries or among the Company’s direct or indirect wholly-owned Subsidiaries, reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other equity interests of the Company securities convertible or any of its Subsidiaries); exchangeable into or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify exercisable for any shares of its capital stock;
(dvii) subject to Section 6.20, change in any material respect its financial or Tax accounting policies or procedures, except as required by applicable Law or by changes in GAAP;
(viii) other than quarterly dividends not Transaction Litigation (which is addressed in excess Section 6.13), settle, release, waive or compromise any litigation or other pending or threatened proceedings or claims by or before a Governmental Entity or arbitrator if such settlement, release, waiver or compromise (A) with respect to the payment of $0.075 per Common Share declared and paid consistent with past practicesmonetary damages, involves the payment by the Company shall not, and shall not permit or any of its Subsidiaries toof monetary damages exceeding $250,000 in any individual matter, declare, set aside net of any amount covered by insurance or pay any dividends on (whether in cash, stock or other property), or make any other distributions third-party indemnification in respect ofof such matter or (B) with respect to any non-monetary terms and conditions therein, any imposes or requires actions that would or would, individually or in the aggregate, reasonably be expected to materially restrict or limit the operations of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries business of the Company consistent with past practices)and its Subsidiaries as conducted on the date hereof;
(eix) neither except as required by a Benefit Plan in effect prior to the date of this Agreement that is set forth on Section 6.1(a)(ix) of the Company nor any of its Subsidiaries shall Disclosure Schedule, (iA) grant or agree provide any severance or termination payments or benefits to any current or former Company Employee or any other current or former service provider, (B) increase in any manner the compensation or benefits of any current or former directorCompany Employee or any other current or former service provider, officer or employee, except other than customary annual increases for non-executive Company Employees in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements(C) establish, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plansenter into, (ii) enter into any new or materially amend any existing Contractadopt, transactionjoin, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof terminate or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreementplan, program, arrangement, plan policy or policy for the benefit of any current or former director, officer or employee agreement that would be a Benefit Plan if it were in existence on the date hereof, (D) hire or otherwise retain the services of any new member of the Company Board, officer or other senior executive, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Contract or Benefit Plan, or (F) except as specifically required by this Agreement, exercise any discretion to accelerate the vesting or payment of any compensation or benefit under any Benefit Plan;
(fx) the Company shall not, and shall not permit any adopt a plan or agreement of its Subsidiaries to, complete or partial liquidation or dissolution;
(xxi) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(gxii) the Company shall notother than (A) any sale, and shall not permit any of its Subsidiaries tolease, (x) incurassignment, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” encumbrances or other agreement to maintain any financial statement condition disposition of another person or enter into any arrangement having inventory in the economic effect ordinary course of any business consistent with past practice and (B) dispositions of assets if the foregoing; or (y) book value thereof does not exceed in the aggregate $500,000, sell, lease, license or subject to any Lien assign, encumber or otherwise dispose of, or agree to sell, lease or subject to any Lien lease, assign, encumber or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(pxiii) fail to maintain its existing insurance coverage of all types;
(xiv) except in the ordinary course of business consistent with past practice, enter into any Material Contract, or amend in any material respect or terminate any Material Contract or waive or grant any release or relinquishment of any material rights under, or renew, any Material Contract; provided, that, except as set forth in Section 6.1(a)(xiv) of the Company shall Disclosure Schedule, entry into, amendment in any material respect, termination of, waiver or granting of any release or relinquishment of any material rights under, or renewal of, any Contract either (i1) use its commercially reasonable efforts todescribed by any of clauses (B), and shall cause (C), (D), (F), (G), (H), (I), (K) or (L) of the definition of “Material Contracts,” or (2) (x) with a term of 18 months or more, (y) that is not terminable by the Company or its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, without fee or penalty upon 90 days’ or less prior notice and (iiz) not, and shall cause that by its Subsidiaries not to, amend terms calls for aggregate payments by or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries thanin excess of $1,500,000, shall require Parent approval in accordance with this Section 6.1(a) even if entered in the terms ordinary course of such business consistent with past practice;
(xv) enter into any Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations with an Affiliate of the Company (other than a wholly-owned Subsidiary of the Company) (an “Affiliate Contract”), or amend in any material respect or, except as contemplated by this Agreement, terminate any Affiliate Contract or waive or grant any release or relinquishment of its Subsidiaries resulting from such amendmentany material rights under, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendmentsrenew, modifications and supplements any Affiliate Contract;
(xvi) spend the amounts in the aggregateSpecified Reserve Account for any purpose other than resolution of the Specified Matter; andor
(qxvii) the Company shall notagree, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
(b) Nothing contained in this Agreement gives, or 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. Prior to the Effective Time, the Company shall exercise, consistent with the terms and subject to the conditions of this Agreement, including this Section 6.1, complete control and supervision over the Company’s and its Subsidiaries’ operations.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Penn National Gaming Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of From the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of hereof until the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its SubsidiariesAcceptance Time, except (A) as may be required by applicable Law, (B) with the prior written consent of Parent (which consent shall not unreasonably be withheld, conditioned or delayed), (C) as expressly contemplated by this Agreement, or (BD) as set forth in Section 5.01(b5.1(a) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(cx) the Company shall not cause the business of the Company and its Subsidiary to be conducted in the ordinary course consistent with past practice and, to the extent consistent therewith, the Company shall use reasonable best efforts to (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of preserve intact its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any and its Subsidiary’s present business organization and maintain the current relationships with Governmental Entities and other fashion Persons having business dealings with the corporate structure or ownership of any of Company and its SubsidiariesSubsidiary, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit prepare and file any of its Subsidiaries to amend its articles of incorporation, or bylaws or requisite regulatory filings with any Regulatory Authority on a timely basis and consistent with their respective past practices and (iii) splitobtain and maintain quantities of each finished Company Pharmaceutical Product and related raw materials and components that the Company reasonably expects to be required for use in the ongoing and anticipated phase 2 and phase 3 clinical trials of each Company Pharmaceutical Product and (y) without limiting the generality of clause (x) above and in furtherance thereof, combine or reclassify any shares of its capital stock, the Company shall not and shall not permit any its Subsidiary to:
(i) amend its certificate of its Subsidiaries to splitincorporation, combine bylaws or reclassify any shares of its capital stockcomparable governing documents;
(dii) merge or consolidate the Company or its Subsidiary with any other Person, except for such transactions between the Company and its Subsidiary, or dissolve or completely or partially liquidate;
(iii) form any Subsidiary or acquire assets from any other Person with a value or purchase price in the aggregate in excess of $300,000 in any transaction or series of related transactions, other than quarterly dividends acquisitions in the ordinary course of business consistent with past practice with a value or purchase price in the aggregate not in excess of $0.075 per Common Share declared and paid 300,000 or pursuant to Material Contracts in effect as of the date hereof;
(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 or its 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 (A) issuance or sales of Shares upon exercise of the Company Options or the vesting of Company Restricted Stock or (B) as permitted under Section 5.1(a)(xviii);
(v) other than in the ordinary course of business consistent with past practicespractice, create or incur any Lien on (i) any assets (other than Company Intellectual Property) of the Company shall notor its Subsidiary having a value in excess of $300,000, and shall not permit (ii) any material Intellectual Property of the Company or its Subsidiaries toSubsidiary, or (iii) material Intellectual Property licensed to the Company or its Subsidiary;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or its Subsidiary) in excess of $300,000 in the aggregate;
(vii) (A) declare, accrue, set aside aside, make or pay any dividends on (whether dividend or other distribution payable in cash, stock stock, property or other property)otherwise, or make any other distributions in with respect of, to any of its capital stock (except for dividends paid by direct the Company’s Subsidiary to the Company), (B) repurchase, redeem or indirect otherwise reacquire 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 any split, combination or reclassification of capital stock of a wholly owned Subsidiaries Subsidiary of the Company, or any issuance or authorization or proposal to issue or authorize any securities of a wholly owned Subsidiary of the Company to the Company or to other another wholly owned Subsidiaries Subsidiary of the Company, or (C) enter into any agreement with respect to the voting of its capital stock;
(viii) incur any indebtedness for borrowed money or assume, guarantee, endorse or otherwise become liable or responsible for (whether directly, contingently or otherwise) any other Person’s indebtedness for borrowed money, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or its Subsidiary, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices)practice not to exceed $300,000 in the aggregate;
(eix) neither except as contemplated in capital budgets furnished to Parent prior to the date of this Agreement, make any capital expenditures in excess of $300,000 in the aggregate;
(x) make any changes with respect to accounting policies or procedures other than as required by changes in GAAP;
(xi) settle any litigation for an amount in excess of $300,000;
(xii) other than as reasonably necessary to facilitate the research and/or clinical operations of the Company nor in a manner consistent with the Company’s operating budgets furnished to Parent prior to the date of this Agreement, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xiii) other than as reasonably necessary to facilitate the research and/or clinical operations of the Company in a manner consistent with the Company’s operating budgets furnished to Parent prior to the date of this Agreement, amend, modify or terminate any Material Contract;
(xiv) other than pursuant to Contracts in effect prior to the date hereof, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights or businesses of the Company or its Subsidiaries shall Subsidiary, except for (iA) sales, transfers or dispositions of obsolete or worthless assets or (B) sales, transfers, leases, licenses or other dispositions of assets with a fair market value not in excess of $300,000 in the aggregate;
(xv) assign or grant an exclusive license of any material right in any Company Intellectual Property necessary or agree useful for the manufacture, use, sale, offer for sale or importation of any Company Pharmaceutical Products or that otherwise enables a third party to compete with the Company with respect to the manufacture or sale of any product that competes with any Company Pharmaceutical Product;
(xvi) waive any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any increase in any manner the compensation or benefits of any current or former directorCompany Pharmaceutical Product and, officer or employee, except increases other than in the ordinary course of business consistent with past practice, increases and bonuses expressly required (A) amend any inbound license in any IP Contract under existing employment agreements, bonus plans and any Patent or other agreements and arrangements listed Company Intellectual Property material to any Company Pharmaceutical Product or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (iiB) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate Contract that would constitute an IP Contract if entered into prior to the date of the Company or any of its Subsidiaries, or this Agreement;
(iiixvii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on operating budgets furnished to Parent prior to the date hereof or amend or modify or terminateof this Agreement, or pay any benefit that is not required by, any Benefit Plan or other 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;
commence (f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions planning) or purchases alter, in a manner that would materially increase the expenditures to be made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and connection therewith, any new Phase I, Phase II, Phase III or Phase IV human clinical trial (vincluding initiation of a new institutional review board) other than non-taxable transfers by or among the involving any Company and the Company’s SubsidiariesPharmaceutical Product;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(ixviii) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, required by applicable Law or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than otherwise required pursuant to commitments prior to existing Contracts or Benefit Plans in effect as of the date hereof and made available to Parent, (A) increase the salaries or other planned capital expenditures wages of any Employee, except in the ordinary course of business consistent with past practices disclosed practice, (B) promote any Employee except in order to fill a position vacated after the date of this Agreement, (C) pay any bonus to any Employee other than a bonus pursuant to Section 5.01(j5.8(f), (D) of the Company Disclosure Schedule by categoryenter into or establish any new employment agreement or change in control severance agreement with any Employee, other than with any new Employee hired to replace an Employee who is party to any such agreement, (E) or make any commitments with respect severance payments to capital expenditures any Employee in excess of what they are contractually entitled to, (F) make any new equity awards to any Employee or other planned capital expenditures accelerate the vesting under any equity compensation plan (except for vesting accelerated pursuant to Section 3.3 of this Agreement), (G) other than in accordance with Section 5.1(a)(xviii)(D), establish, adopt, terminate or materially amend any Benefit Plan, (H) hire any employee at the ordinary course level of business consistent Vice President or above, (I) hire any employee in a sales, general or administrative capacity with past practices an annual base salary in excess of $500,000 150,000, or (J) hire any employee (other than an employee described in the aggregateclause “(I)” above) with an annual base salary in excess of $250,000;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(lxix) except as set forth in Section 5.01(l) of the Company Disclosure Schedulerequired by applicable Law, the Company shall notmake, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor change or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in rescind any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to TaxesTax election, file any amended material Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to material Taxes, enter into any closing agreementagreement with respect to a material Tax, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund material Tax refund, or change any material method of TaxesTax accounting;
(xx) enter into or consummate any tax planning or restructuring transaction which involves any transfer, assignment or other disposition of any Company Intellectual Property;
(xxi) (A) waive or amend (except as set forth in Section 5.01(o) the course of diligently prosecuting the Company Disclosure Schedule, consent Intellectual Property) the Company’s rights in or to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to Company Intellectual Property owned by the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return Subsidiary that is registered or the payment subject of an application for registration, (B) fail to diligently prosecute or maintain any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of material Company Intellectual Property owned by the Company or its Subsidiary that is registered or the subject of an application for registration, in each case in the name of Company or its Subsidiary or (C) fail to make any required payments in accordance with the terms of its Subsidiariesany IP Contract pursuant to which the Company licenses any material Intellectual Property;
(pxxii) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination qualify any new site for manufacturing of any Contract with any Significant Customer, Company Pharmaceutical Product; or
(iixxiii) not, and shall cause its Subsidiaries not to, amend or modify enter into any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
(b) Each of Parent and Merger Sub, subject to the limitations set forth in Section 5.4(e)(ii), on the one hand, and the Company, on the other hand, agrees that, except as otherwise provided in this Agreement, it shall not knowingly take any action that would reasonably be expected to prevent or delay the consummation of the Offer, the Merger and the other Transactions in accordance with the terms of this Agreement. Without limiting the generality of the foregoing, each of Parent and Merger Sub agrees that, after the date hereof and prior to the Effective Time, it shall not consummate or agree to consummate any purchase or other acquisition of any assets, licenses, operations, rights or businesses that, individually or in the aggregate with any other such purchase or acquisition, would reasonably be expected to (i) prevent or delay the parties hereto from obtaining any consents, registrations, approvals, permits or authorizations required to be obtained from any Governmental Entity in connection with the consummation of the Offer, the Merger and the other Transactions, (ii) result in the imposition of a condition or conditions on any such consents, registrations, approvals, permits or authorizations, or (iii) otherwise prevent or delay any party hereto from performing its obligations hereunder or consummating the Offer, the Merger and the other Transactions.
(c) The Company shall promptly notify Parent and Merger Sub of any significant data relating to the Key Product, including information related to any significant adverse events with respect to the Key Product.
(d) Each party hereto shall promptly advise the other parties hereto of any Proceeding or material claim threatened, commenced or asserted against or with respect to any such party relating to the Transactions and promptly provide the parties hereto with copies of all material complaints, pleadings and filings related thereto.
(e) From the date hereof until the Acceptance Time, the Company shall (i) consult with Parent in connection with any proposed meeting with the FDA or any other Governmental Entity relating to any Company Pharmaceutical Product, (ii) promptly inform Parent of, and provide Parent with a reasonable opportunity to review, any material filing proposed to be made by or on behalf of any of the Company or its Subsidiary, and any material correspondence or other material communication proposed to be submitted or otherwise transmitted to the FDA or any other Governmental Entity by or on behalf of any of the Company or its Subsidiary, in each case relating to any Company Pharmaceutical Product, (iii) keep Parent promptly informed of (A) any communication (written or oral) with or from the FDA and any other Governmental Entity and (B) any material communications (written or oral) received from any Person relating to the Company Intellectual Property and (iv) promptly inform Parent and provide Parent or Merger Sub with a reasonable opportunity (but no more than three (3) Business Days) to comment, in each case, prior to making any material change to any study protocol, adding any new trial, making any material change to a manufacturing plan or process, making any material change to a development timeline or initiating, or making any material change to, promotional or marketing materials or activities relating to any Company Pharmaceutical Product.
(f) Notwithstanding the above, the delivery of any notice pursuant to Section 5.1(b), 5.1(c), 5.1(d) or 5.1(e) shall not limit or otherwise affect the representations, warranties, covenants or agreements of the parties hereto, the remedies available hereunder to the party hereto receiving such notice or the conditions to such party's obligation to consummate the Offer, the Merger or any of the other Transactions.
(g) Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control the Company or its Subsidiary or direct the business or operations of the Company or its Subsidiary prior to the 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 operations and the operations of its Subsidiary. Nothing in this Agreement, including any of the actions, rights or restrictions set forth herein, shall be interpreted in such a way as to place the Company, Parent or Merger Sub in violation of any rule, regulation or policy of any Governmental Entity, including any applicable Law.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of From the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of hereof until the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its SubsidiariesAcceptance Time, except (A) as may be required by applicable Law, (B) with the prior written consent of Parent (which consent shall not unreasonably be withheld, conditioned or delayed), (C) as expressly contemplated by this Agreement, or (BD) as set forth in Section 5.01(b5.1(a) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(cx) the Company shall not cause the business of the Company and its Subsidiary to be conducted in the ordinary course consistent with past practice and, to the extent consistent therewith, the Company shall use reasonable best efforts to (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of preserve intact its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any and its Subsidiary’s present business organization and maintain the current relationships with Governmental Entities and other fashion Persons having business dealings with the corporate structure or ownership of any of Company and its SubsidiariesSubsidiary, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit prepare and file any of its Subsidiaries to amend its articles of incorporation, or bylaws or requisite regulatory filings with any Regulatory Authority on a timely basis and consistent with their respective past practices and (iii) splitobtain and maintain quantities of each finished Company Pharmaceutical Product and related raw materials and components that the Company reasonably expects to be required for use in the ongoing and anticipated phase 2 and phase 3 clinical trials of each Company Pharmaceutical Product and (y) without limiting the generality of clause (x) above and in furtherance thereof, combine or reclassify any shares of its capital stock, the Company shall not and shall not permit any its Subsidiary to:
(i) amend its certificate of its Subsidiaries to splitincorporation, combine bylaws or reclassify any shares of its capital stockcomparable governing documents;
(dii) merge or consolidate the Company or its Subsidiary with any other Person, except for such transactions between the Company and its Subsidiary, or dissolve or completely or partially liquidate;
(iii) form any Subsidiary or acquire assets from any other Person with a value or purchase price in the aggregate in excess of $300,000 in any transaction or series of related transactions, other than quarterly dividends acquisitions in the ordinary course of business consistent with past practice with a value or purchase price in the aggregate not in excess of $0.075 per Common Share declared and paid 300,000 or pursuant to Material Contracts in effect as of the date hereof;
(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 or its 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 (A) issuance or sales of Shares upon exercise of the Company Options or the vesting of Company Restricted Stock or (B) as permitted under Section 5.1(a)(xviii);
(v) other than in the ordinary course of business consistent with past practicespractice, create or incur any Lien on (i) any assets (other than Company Intellectual Property) of the Company shall notor its Subsidiary having a value in excess of $300,000, and shall not permit (ii) any material Intellectual Property of the Company or its Subsidiaries toSubsidiary, or (iii) material Intellectual Property licensed to the Company or its Subsidiary;
(vi) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or its Subsidiary) in excess of $300,000 in the aggregate;
(vii) (A) declare, accrue, set aside aside, make or pay any dividends on (whether dividend or other distribution payable in cash, stock stock, property or other property)otherwise, or make any other distributions in with respect of, to any of its capital stock (except for dividends paid by direct the Company’s Subsidiary to the Company), (B) repurchase, redeem or indirect otherwise reacquire 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 any split, combination or reclassification of capital stock of a wholly owned Subsidiaries Subsidiary of the Company, or any issuance or authorization or proposal to issue or authorize any securities of a wholly owned Subsidiary of the Company to the Company or to other another wholly owned Subsidiaries Subsidiary of the Company, or (C) enter into any agreement with respect to the voting of its capital stock;
(viii) incur any indebtedness for borrowed money or assume, guarantee, endorse or otherwise become liable or responsible for (whether directly, contingently or otherwise) any other Person’s indebtedness for borrowed money, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or its Subsidiary, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices)practice not to exceed $300,000 in the aggregate;
(eix) neither except as contemplated in capital budgets furnished to Parent prior to the date of this Agreement, make any capital expenditures in excess of $300,000 in the aggregate;
(x) make any changes with respect to accounting policies or procedures other than as required by changes in GAAP;
(xi) settle any litigation for an amount in excess of $300,000;
(xii) other than as reasonably necessary to facilitate the research and/or clinical operations of the Company nor in a manner consistent with the Company’s operating budgets furnished to Parent prior to the date of this Agreement, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xiii) other than as reasonably necessary to facilitate the research and/or clinical operations of the Company in a manner consistent with the Company’s operating budgets furnished to Parent prior to the date of this Agreement, amend, modify or terminate any Material Contract;
(xiv) other than pursuant to Contracts in effect prior to the date hereof, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights or businesses of the Company or its Subsidiaries shall Subsidiary, except for (iA) sales, transfers or dispositions of obsolete or worthless assets or (B) sales, transfers, leases, licenses or other dispositions of assets with a fair market value not in excess of $300,000 in the aggregate;
(xv) assign or grant an exclusive license of any material right in any Company Intellectual Property necessary or agree useful for the manufacture, use, sale, offer for sale or importation of any Company Pharmaceutical Products or that otherwise enables a third party to compete with the Company with respect to the manufacture or sale of any product that competes with any Company Pharmaceutical Product;
(xvi) waive any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any increase in any manner the compensation or benefits of any current or former directorCompany Pharmaceutical Product and, officer or employee, except increases other than in the ordinary course of business consistent with past practice, increases and bonuses expressly required (A) amend any inbound license in any IP Contract under existing employment agreements, bonus plans and any Patent or other agreements and arrangements listed Company Intellectual Property material to any Company Pharmaceutical Product or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (iiB) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate Contract that would constitute an IP Contract if entered into prior to the date of the Company or any of its Subsidiaries, or this Agreement;
(iiixvii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on operating budgets furnished to Parent prior to the date hereof or amend or modify or terminateof this Agreement, or pay any benefit that is not required by, any Benefit Plan or other 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;
commence (f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions planning) or purchases alter, in a manner that would materially increase the expenditures to be made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and connection therewith, any new Phase I, Phase II, Phase III or Phase IV human clinical trial (vincluding initiation of a new institutional review board) other than non-taxable transfers by or among the involving any Company and the Company’s SubsidiariesPharmaceutical Product;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(ixviii) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, required by applicable Law or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than otherwise required pursuant to commitments prior to existing Contracts or Benefit Plans in effect as of the date hereof and made available to Parent, (A) increase the salaries or other planned capital expenditures wages of any Employee, except in the ordinary course of business consistent with past practices disclosed practice, (B) promote any Employee except in order to fill a position vacated after the date of this Agreement, (C) pay any bonus to any Employee other than a bonus pursuant to Section 5.01(j5.8(f), (D) of the Company Disclosure Schedule by categoryenter into or establish any new employment agreement or change in control severance agreement with any Employee, other than with any new Employee hired to replace an Employee who is party to any such agreement, (E) or make any commitments with respect severance payments to capital expenditures any Employee in excess of what they are contractually entitled to, (F) make any new equity awards to any Employee or other planned capital expenditures accelerate the vesting under any equity compensation plan (except for vesting accelerated pursuant to Section 3.3 of this Agreement), (G) other than in accordance with Section 5.1(a)(xviii)(D), establish, adopt, terminate or materially amend any Benefit Plan, (H) hire any employee at the ordinary course level of business consistent Vice President or above, (I) hire any employee in a sales, general or administrative capacity with past practices an annual base salary in excess of $500,000 150,000, or (J) hire any employee (other than an employee described in the aggregateclause “(I)” above) with an annual base salary in excess of $250,000;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(lxix) except as set forth in Section 5.01(l) of the Company Disclosure Schedulerequired by applicable Law, the Company shall notmake, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor change or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in rescind any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to TaxesTax election, file any amended material Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to material Taxes, enter into any closing agreementagreement with respect to a material Tax, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund material Tax refund, or change any material method of TaxesTax accounting;
(xx) enter into or consummate any tax planning or restructuring transaction which involves any transfer, assignment or other disposition of any Company Intellectual Property;
(xxi) (A) waive or amend (except as set forth in Section 5.01(o) the course of diligently prosecuting the Company Disclosure Schedule, consent Intellectual Property) the Company’s rights in or to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to Company Intellectual Property owned by the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return Subsidiary that is registered or the payment subject of an application for registration, (B) fail to diligently prosecute or maintain any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of material Company Intellectual Property owned by the Company or its Subsidiary that is registered or the subject of an application for registration, in each case in the name of Company or its Subsidiary or (C) fail to make any required payments in accordance with the terms of its Subsidiariesany IP Contract pursuant to which the Company licenses any material Intellectual Property;
(pxxii) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination qualify any new site for manufacturing of any Contract with any Significant Customer, Company Pharmaceutical Product; or
(iixxiii) not, and shall cause its Subsidiaries not to, amend or modify enter into any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
(b) Each of Parent and Merger Sub, subject to the limitations set forth in Section 5.4(e)(ii), on the one hand, and the Company, on the other hand, agrees that, except as otherwise provided in this Agreement, it shall not knowingly take any action that would reasonably be expected to prevent or delay the consummation of the Offer, the Merger and the other Transactions in accordance with the terms of this Agreement. Without limiting the generality of the foregoing, each of Parent and Merger Sub agrees that, after the date hereof and prior to the Effective Time, it shall not consummate or agree to consummate any purchase or other acquisition of any assets, licenses, operations, rights or businesses that, individually or in the aggregate with any other such purchase or acquisition, would reasonably be expected to (i) prevent or delay the parties hereto from obtaining any consents, registrations, approvals, permits or authorizations required to be obtained from any Governmental Entity in connection with the consummation of the Offer, the Merger and the other Transactions, (ii) result in the imposition of a condition or conditions on any such consents, registrations, approvals, permits or authorizations, or (iii) otherwise prevent or delay any party hereto from performing its obligations hereunder or consummating the Offer, the Merger and the other Transactions.
(c) The Company shall promptly notify Parent and Merger Sub of any significant data relating to the Key Product, including information related to any significant adverse events with respect to the Key Product.
(d) Each party hereto shall promptly advise the other parties hereto of any Proceeding or material claim threatened, commenced or asserted against or with respect to any such party relating to the Transactions and promptly provide the parties hereto with copies of all material complaints, pleadings and filings related thereto.
(e) From the date hereof until the Acceptance Time, the Company shall (i) consult with Parent in connection with any proposed meeting with the FDA or any other Governmental Entity relating to any Company Pharmaceutical Product, (ii) promptly inform Parent of, and provide Parent with a reasonable opportunity to review, any material filing proposed to be made by or on behalf of any of the Company or its Subsidiary, and any material correspondence or other material communication proposed to be submitted or otherwise transmitted to the FDA or any other Governmental Entity by or on behalf of any of the Company or its Subsidiary, in each case relating to any Company Pharmaceutical Product, (iii) keep Parent promptly informed of (A) any communication (written or oral) with or from the FDA and any other Governmental Entity and (B) any material communications (written or oral) received from any Person relating to the Company Intellectual Property and (iv) promptly inform Parent and provide Parent or Merger Sub with a reasonable opportunity (but no more than three (3) Business Days) to comment, in each case, prior to making any material change to any study protocol, adding any new trial, making any material change to a manufacturing plan or process, making any material change to a development timeline or initiating, or making any material change to, promotional or marketing materials or activities relating to any Company Pharmaceutical Product.
(f) Notwithstanding the above, the delivery of any notice pursuant to Section 5.1(b), 5.1(c), 5.1(d) or 5.1(e) shall not limit or otherwise affect the representations, warranties, covenants or agreements of the parties hereto, the remedies available hereunder to the party hereto receiving such notice or the conditions to such party’s obligation to consummate the Offer, the Merger or any of the other Transactions.
(g) Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control the Company or its Subsidiary or direct the business or operations of the Company or its Subsidiary prior to the 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 operations and the operations of its Subsidiary. Nothing in this Agreement, including any of the actions, rights or restrictions set forth herein, shall be interpreted in such a way as to place the Company, Parent or Merger Sub in violation of any rule, regulation or policy of any Governmental Entity, including any applicable Law.
Appears in 1 contract
Sources: Merger Agreement (Pharmasset Inc)
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, delayed or conditioned)), and except as otherwise expressly contemplated or expressly permitted by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing required by Parentapplicable Law, the Company covenants and agrees that during the period from the date business of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in all material respects in the ordinary course of business and and, to the extent consistent with the foregoing, the Company and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve intact their current business organizationsorganizations substantially intact, maintain satisfactory relationships with Governmental Entities, customers and suppliers having significant business dealings with them and keep available the services of their current officers key employees; provided that any action specifically permitted by clauses (i)-(xix) of this Section 6.1(a) shall be deemed in compliance with this sentence. In furtherance of the foregoing, from the date of this Agreement until the Effective Time, except (w) as otherwise contemplated or permitted by this Agreement, (x) as Parent may approve in writing (such approval not to be unreasonably withheld, delayed or conditioned), (y) as is required by applicable Law or any Governmental Entity or (z) as set forth in Section 6.1(a) of the Company Disclosure Letter, the Company will not and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and will not permit its Subsidiaries to:
(i) adopt any change in its certificate of incorporation or bylaws or other material third parties having business dealings with them and to preserve the goodwill of their respective businessesapplicable governing documents;
(bii) merge or consolidate the Company shall not, and shall not permit or any of its Subsidiaries towith any other Person, except for any such transactions among wholly owned Subsidiaries of the Company;
(iiii) make any acquisition of any business or any assets, other than acquisitions of assets acquired from the Company’s vendors in the ordinary course of business of the Company and its Subsidiaries;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber or authorize for the issuance, issuesale, deliverpledge, sell disposition, grant, transfer, lease, license, guarantee or agree or commit to issueencumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, or securities convertible or exchangeable forinto or exercisable for any shares of such capital stock, or any options, warrants, calls, commitments warrants or other rights of any kind to acquire, acquire any shares of such capital stock or such convertible or exchangeable securities (other equity interests than (A) in respect of Company Options, RSUs and PSUs outstanding as of the date of this Agreement in accordance with their terms or (B) the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company);
(v) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned United States Subsidiary of the Company;
(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 capital stock (except for (A) dividends paid 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 and (B) regular quarterly dividends declared and paid at such time and in such amounts as is reasonably consistent with the Company’s historical practice; provided that in no event shall such regular quarterly dividend exceed $0.225 per Share) 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 redeem, purchase or otherwise acquire any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (iii) amend, modify other than the retention or waive any term acquisition of any outstanding Shares tendered by current or former employees or directors in order to pay the exercise price of any Company Options or Taxes in connection with the exercise or vesting of Company Options, RSUs or PSUs);
(viii) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (other than a wholly owned Subsidiary of the Company), 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, other than indebtedness incurred in the ordinary course of business in an aggregate principal amount not to exceed $5,000,000 outstanding at any time that may be repaid at any time without penalty;
(ix) make any material changes with respect to financial accounting policies or procedures, except as required by GAAP;
(x) except as with respect to Transaction Litigation, which shall be governed by Section 6.15, and appraisal litigation which shall be governed by Section 4.2(f), settle any litigation or other proceedings before a Governmental Entity if such settlement (A) as required with respect to the payment of monetary damages, involves the payment of monetary damages that exceed $2,000,000 individually or $10,000,000 in the aggregate during any calendar year, net of any amount covered by this Agreement, insurance or indemnification or (B) as set forth in Section 5.01(b) with respect to any non-monetary terms and conditions therein, imposes or requires actions that would have a material effect on the continuing operations of the Company Disclosure Scheduleor its Subsidiaries;
(xi) (A) make or change any material Tax election; (B) settle, in connection with accelerating the vesting schedules of the Options consent to the extent required by the Stock Plans or the agreements pursuant compromise any material Tax claim or assessment or surrender a right to which such Options were granted or a material Tax refund; (C) in connection consent to any extension or waiver of any limitation period with terminating the Options and the Stock Plansrespect to any material Tax claim or assessment; (D) file an amended Tax Return; (E) enter into a closing agreement with any Governmental Entity regarding any material Tax; or (F) change any method of tax accounting;
(cxii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, rights, operations, product lines or businesses of the Company shall not (i) sellor its Subsidiaries, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership including capital stock of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws other than Permitted Liens or (iiiA) splittransactions solely among the Company and/or its wholly owned Subsidiaries that would not result in a material increase in the Tax liability of the Company and its Subsidiaries, combine (B) licenses to customers and resellers in the ordinary course of business with respect to any Intellectual Property, (C) transactions involving the sales, leases, licenses or reclassify any shares other dispositions of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
assets (d) other than quarterly dividends pursuant to clause (B)) with a fair market value not in excess of $0.075 per Common Share declared and paid 1,000,000 individually or $5,000,000 in the aggregate or (D) pursuant to Contracts in effect as of the date of this Agreement;
(xiii) (A) other than as required pursuant to the terms of any Benefit Plan in effect on the date hereof, as required by applicable Law or in the ordinary course of business consistent with past practices, the Company shall not, and shall not permit any practice for employees of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 its Subsidiaries who hold a position of vice president or below and have an annual base salary below $200,000 (“Non-Management Employees”): (1) enter into or amend any agreement providing compensation or benefits to any Service Provider, except for amendments that do not materially increase compensation or benefits, (2) enter into, adopt, amend, modify or terminate any compensation or benefit plans (other wholly owned Subsidiaries than routine amendments or renewals to health and welfare plans (other than severance plans) that do not materially increase benefits or result in materially increased costs), (3) increase the benefits or compensation provided to any current or former Service Provider except for salary and/or target bonus opportunity increases granted in connection with and corresponding to any promotion or job change (to the extent that such increases are in the ordinary course of the Company business and consistent with past practicespractice) and (B) other than as required by applicable Law or as required pursuant to the terms of any Benefit Plan in effect on the date hereof: (1) discretionarily accelerate the vesting or payment of any cash or equity award held by any former or current Service Provider; (2) hire or engage the services of any individual who is expected to hold a position of vice president or above and have an annual base salary equal to or above $200,000 (each, a “Management Employee”) other than any individual replacing a former employee who was a Management Employee (but who is not an executive officer); (3) take any action to fund or secure the payment of any amounts under any Benefit Plan; (4) 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, other than as required by GAAP; (5) loan or advance any money or other property to any Service Provider, other than routine advances for business expenses in the ordinary course of business or (6) pay any severance in excess of what is legally required (it being understood that any exceptions under this Section 6.1(a)(xiii) will not apply to any actions otherwise prohibited by Section 6.1(a)(iv);
(exiv) neither adopt or implement any stockholder rights plan or similar arrangement, in each case, applicable to the Merger or any other transaction consummated with Parent after giving effect to Parent’s rights under Section 6.2(g);
(xv) enter into any Contract which would limit (i) the incurrence of indebtedness or (ii) the declaration and payment of the dividends in respect of the Shares, RSUs and PSUs pursuant to Section 6.1(a)(vi) by the Company nor or its Subsidiaries;
(xvi) except as required by applicable Law or GAAP, (A) revalue in any material respect any of its Subsidiaries shall properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business; or (iB) grant or agree to make any increase material change in any manner of its accounting principles or practices;
(xvii) (A) incur or commit to incur any capital expenditures other than (1) capital expenditures not to exceed $35,000,000 in the compensation aggregate during any six month period from July 1, 2015 to Closing; or benefits (2) pursuant to obligations imposed by Material Contracts, in the case of any current or former directorthis clause (2), officer or employee, except increases to the extent that such capital expenditures do not exceed $5,000,000 individually; (B) other than in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreementsenter into, bonus plans and other agreements and arrangements listed modify, amend or described terminate any Material Contract; (C) maintain insurance at less than current levels or otherwise in Section 5.01(ea manner inconsistent with past practice; (D) of the Company Disclosure Schedule and except engage in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plansany transaction with, (ii) or enter into any new agreement, arrangement or materially amend understanding with, any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate Affiliate of the Company or any other Person covered by Item 404 of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of Regulation S-K promulgated by the Company Disclosure Schedule, as may SEC that would be required to comply with applicable Law and be disclosed pursuant to Item 404; (E) effectuate a “plant closing,” “mass layoff” (each as provided or otherwise contemplated defined in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan WARN) or other employee benefit plan layoff event affecting in whole or in part any agreementsite of employment, arrangementfacility, plan operating unit or policy for employee; (F) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor, in each case other than in the benefit ordinary course of business; or (G) waive or release any current or former director, officer or employee material claim other than in existence on the date hereofordinary course of business;
(fxviii) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, propose or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);reorganization; or
(ixix) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries toagree, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
(b) Nothing contained in 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 the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 1 contract
Interim Operations. (a) Except as otherwise contemplated required by applicable Law or as expressly provided by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by ParentAgreement, the Company covenants and agrees that during the period from as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) Acceptance Time, the business of it and operations its Subsidiaries shall be conducted in all material respects in the ordinary and usual course and it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the material components of their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, clients, suppliers, licensees, licensors, partners, creditors and lessors, key employees and independent contractors, material service providers, agents and business associates and other Persons with which it or any of its Subsidiaries has significant business relations and keep available the services of its and its Subsidiaries’ present officers and key employees and independent contractors; provided, however, that the Company and its Subsidiaries shall be conductedunder no obligation to and shall not, without Parent’s prior written consent, put in place any new retention programs or include additional personnel in any existing retention programs. Without limiting the generality of the immediately preceding sentence, from the date of this Agreement until the Acceptance Time, except (A) as otherwise expressly required by this Agreement, (B) with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed) or (C) as set forth on Section 6.1(a) of the Company Disclosure Schedule, the Company will not and the books and records will not permit its Subsidiaries to:
(i) adopt or propose any change or amendment (whether by merger, consolidation or otherwise) to its certificate of incorporation or bylaws or other similar governing documents of the Company and its Subsidiaries;
(ii) merge or consolidate the Company or any of its Subsidiaries shall with any other Person, except for any such transactions solely among wholly owned Subsidiaries of the Company not in violation of any instrument binding on the Company or any of its Subsidiaries and that would not reasonably be maintained, only expected to result in a material increase in the ordinary course net Tax liability of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizationsSubsidiaries, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businessestaken as a whole;
(biii) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issuesale, deliverpledge, sell disposition, grant, transfer, lease, license, guarantee or agree or commit to issueencumbrance of, sell or deliver any (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any A) shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (includingother than (1) the issuance, without limitationsale, 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 (2) the issuance or transfer of Shares pursuant to awards outstanding as of the date of this Agreement under, and as required by the terms of the Stock Plans as in effect as of the date of this Agreement), (B) securities convertible into or exercisable, exchangeable foror redeemable for any shares of such capital stock, or any options, warrants, calls, commitments warrants or other rights of any kind to acquire, acquire any shares of such capital stock or such convertible, exercisable, exchangeable or redeemable securities, or (C) any Voting Debt;
(iv) declare, authorize, set aside, make or pay any dividend or other equity interests distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for dividends paid by any Subsidiary of the Company to the Company or to a wholly owned Subsidiary of the Company) or enter into any Contract with respect to the voting of its capital stock;
(v) adjust, reclassify, split, combine or subdivide, 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) acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, any assets, securities, properties, interests, or businesses or make any investment (whether by purchase of stock or securities, contributions to capital, loans to, or property transfers), except for the capital expenditures contemplated by (ix) below, in each case, other than (A) acquisitions of supplies, equipment, inventory, third party Software and capital in the ordinary course of business consistent with past practice (it being understood and agreed that the acquisition of all or substantially all of the assets of any Person is not in the ordinary course of business consistent with past practice), or (B) acquisitions with a value or purchase price (including the value of assumed liabilities) not in excess of $100,000 in any transaction or related series of transactions or $400,000 in the aggregate;
(vii) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly owned Subsidiary of its Subsidiaries); the Company) except for such advances incurred in the ordinary course of business consistent with past practice not to exceed $500,000 in the aggregate;
(viii) incur, alter, amend or (iii) amendmodify any indebtedness or guarantee indebtedness of another Person, modify or waive issue or sell any term of debt securities or warrants or other rights to acquire any outstanding debt security of the Company or any of its Subsidiaries, except for the incurrence of indebtedness for borrowed money incurred in the ordinary course of business consistent with past practice not to exceed $25,000 in the aggregate;
(ix) make or authorize any capital expenditures;
(x) make any material changes with respect to accounting policies or procedures, except as required by changes in applicable GAAP;
(xi) subject to Section 6.10, release, assign, compromise, discharge, waive, settle or satisfy any Action (including any Action relating to this Agreement, the Offer or the Merger) or other rights, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) other than releases, assignments, compromises, discharges, waivers, settlements or satisfactions where the payments not covered by insurance do not exceed $850,000 in the aggregate or providing for any relief other than monetary relief (except for confidentiality, non-disparagement, releases, agreements not to s▇▇ and other similar provisions in a settlement agreement);
(A) as required by this Agreementamend or modify, in any material respect, or terminate any Material Contract, material lease for Leased Real Property or material Company Permit, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedulewaive, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans release or the agreements pursuant to which such Options were granted assign any material rights or material claims under any Material Contract or (C) except in connection the ordinary course of business consistent with terminating past practice enter into any Contract that would have been a Material Contract had it been entered into prior to the Options and the Stock Plansexecution of this Agreement;
(cxiii) the Company shall not (i) sellmake any Tax election, transfer materially amend any Tax Return, settle or pledge, finally resolve any controversy or agree to sell, transfer or pledge, change any equity interest owned by it in any method of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockTax accounting;
(dxiv) (A) grant to any third Person any license, sublicense, covenant not to s▇▇, immunity, authorization, release or other than quarterly dividends not right with respect to any material Intellectual Property; (B) assign or transfer to any third Person any material Intellectual Property; or (C) abandon any material Company Registered Intellectual Property Rights, in excess each case except as in the ordinary course of $0.075 per Common Share declared and paid business consistent with past practices, practice;
(xv) terminate any executive officers or hire any new employees unless such hiring is in the Company shall not, and shall not permit any ordinary course of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company business consistent with past practices)practice;
(exvi) neither adopt, enter into, amend, terminate or extend any Collective Bargaining Agreement;
(xvii) except as required pursuant to existing written, binding agreements in effect prior to the Company nor any date of its Subsidiaries shall this Agreement, or as otherwise required by applicable Law, (iA) grant or agree provide any severance or termination payments or benefits to any increase in any manner the compensation or benefits of any current or former director, officer or employeeor, except increases other than in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(eemployees (who are not officers) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, (B) increase the compensation, bonus or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedulepension, as may be required to comply with applicable Law and as provided welfare, severance, change-in-control or otherwise contemplated in this Agreement (includingother benefits of, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required bybonus to, any Benefit Plan or other 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;
(f) the Company shall notor, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess practice, non-officer employee of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as other than, in the case of non-officer employees, base salary increases or bonuses awarded in the date hereof, except as may be required as a result ordinary course of a change in applicable Law or in GAAP;
business consistent with past practice (n) the Company shall not, and which bonuses shall not permit any of its Subsidiaries toexceed $10,000 in the aggregate), take, or agree or commit to take, any action that would, or is reasonably likely to, (C) make any representation new equity-based awards to any director, officer or warranty non-officer employee of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, (D) establish, adopt, enter into amend or surrender terminate any right Company Benefit Plan or amend the terms of any outstanding equity-based awards, (E) take any action to claim a refund accelerate the vesting or payment, or fund or in any other way secure the payment, of Taxescompensation or benefits under any Company Benefit Plan, to the extent not already provided in any such Company Benefit Plan, (F) materially 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, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiariesmay be required by GAAP, or take (G) forgive any other similar actionloans to directors, officers or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit key employees of the Company or any of its Subsidiaries;
(pxviii) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of reclassify any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations independent contractor as an employee of the Company or any of its Subsidiaries resulting from unless the Company reasonably believes that such amendmenta change is advisable in order to comply with applicable law;
(xix) fail to use commercially reasonable efforts to renew or maintain the Insurance Policies or comparable replacement policies, modification other than in the ordinary course of business consistent with past practice;
(xx) enter into any new line of business;
(xxi) adopt, enter into or supplement effect any plan of complete or partial liquidation, dissolution, reorganization or restructuring;
(xxii) take any action that would, or would exceed $25,000 per annum be reasonably likely to, individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate, prevent, materially delay or materially impede the consummation of the Offer, the Merger or the other transactions contemplated by this Agreement; andor
(qxxiii) the Company shall notagree, and shall not permit any of its Subsidiaries toauthorize, agree propose, commit or commit announce an intention to do any of the foregoing.
(b) Nothing contained in Section 6.1(a) shall give to Parent or Acquisition Sub, directly or indirectly, rights to control or direct the Company’s operations prior to the Acceptance Time in violation of applicable Law. Prior to the Acceptance Time, the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its operations and shall not be required to obtain consent of Parent if it reasonably believes that doing so would violate applicable Law.
Appears in 1 contract
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as otherwise expressly contemplated by this Agreement or as set forth required by a Governmental Entity or applicable Law, its business and the business of its Subsidiaries shall be conducted in all material respects in the Ordinary Course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations substantially intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of 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 5.01 7.1(b) below shall be deemed a breach of the Company Disclosure Schedule or as consented to obligations under this sentence unless such action would constitute a breach of such other provision.
(b) Without limiting the generality of, and in writing by Parentfurtherance of, the Company covenants and agrees that during the period foregoing, from the date of this Agreement to until the Effective Time Time, except as otherwise expressly (A) contemplated by this Agreement, (B) required by a Governmental Entity or until termination of this Agreement applicable Law, (C) approved in accordance with Article 7 hereof):
writing (awhich approval shall not be unreasonably withheld, conditioned or delayed) the business and operations by Parent or (D) set forth in Section 7.1(b) of the Company Disclosure Letter, the Company shall not and shall not permit its Subsidiaries shall be conducted, and to:
(i) adopt or propose any change in (x) the books and records Company’s Organizational Documents or (y) any Subsidiary’s Organizational Documents;
(ii) merge or consolidate itself or any of the Company and its Subsidiaries shall be maintainedwith any other Person, only in the ordinary course of business and the Company and except for any such transactions among its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizationswholly owned Subsidiaries, keep available the services of their current officers and employees and preserve their relationships with their or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material customerschanges or restrictions on its assets, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective operations or businesses;
(biii) acquire assets from any other Person with a fair market value or purchase price in excess of $12.5 million in the Company shall notaggregate, and shall not permit any other than acquisitions pursuant to Material Contracts in effect as of its Subsidiaries tothe date of this Agreement;
(iv) issue, (i) sell, pledge, dispose of, grant, transfer, encumber, or authorize for the issuance, issuesale, deliverpledge, sell disposition, grant, transfer, lease, license, guarantee or agree or commit to issueEncumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (includingother the issuance of shares (A) by its wholly owned Subsidiary to it or another of its wholly owned Subsidiaries or (B) in respect of outstanding Company Equity Awards in accordance with their terms and, without limitationas applicable, securities exchangeable forthe Stock Plans), any Company Equity Award, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, calls, commitments warrants or other rights of any kind to acquire, acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance (other equity interests of than a Permitted Encumbrance) that is material to the Company or on any of its or its Subsidiaries); ’ assets, rights or properties;
(iiivi) amendmake any loans, modify advances, guarantees or waive capital contributions to or investments in any term of any outstanding security of Person (other than to or from the Company or and any of its wholly owned Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, 5 million in the Company shall not, and shall not permit aggregate;
(vii) make any of its Subsidiaries 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 dividends on (whether dividend or other distribution, payable in cash, stock stock, property or other property)otherwise, or make any other distributions in with respect of, 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 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 offer to redeem, repurchase 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, other than the withholding of shares of Company Common Stock to satisfy withholding Tax obligations upon the exercise, vesting or settlement of outstanding Company Equity Awards in accordance with 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 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 to 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 or to other wholly owned any of its Subsidiaries as in effect as of the Company consistent with past practicesdate of this Agreement to the extent incurred to fund any other action expressly permitted under the other paragraphs of this Section 7.1(b);
(exi) neither except as set forth in the Company’s capital budget set forth in Section 7.1(b)(xi) of the Company nor 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 such Contract, or (B) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other rights under Intellectual Property Rights owned by the Company or any of its Subsidiaries, in each case, granted in the Ordinary Course;
(xiii) settle or compromise any Proceedings for an amount in excess of $3 million individually or $6 million 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 with respect to accounting policies or procedures, except as required by GAAP;
(xv) except in the 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 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 a Fair Value not in excess of $15 million in the aggregate other than pursuant to Material Contracts in effect prior to the date of this Agreement and (C) non-exclusive licenses entered into in the Ordinary Course;
(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, except, in 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 actual performance, (C) establish, adopt, amend or terminate any Company Benefit Plan except for amendments to Company Benefit Plans made in the Ordinary Course that do not materially increase the expense of maintaining such plan, (D) 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 Benefit Plan, other than to the extent not required by such Company Benefit Plan, (E) grant any 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, 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 shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases for loans made in the ordinary course of business consistent with past practicepractice and not in excess of $100,000 individually or $500,000 in the aggregate), increases and bonuses expressly required under (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 employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) as of the Company Disclosure Schedule and except 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 connection with accelerating employee headcount from the vesting schedules date hereof does not exceed 50, no consent of Parent shall be required to hire employees to fill open positions existing as of the Options and terminating date of this Agreement or to replace employees whose employment has terminated following the Options and date of this Agreement) or (I) terminate the Stock Plansemployment of any Executive Officer other than for cause or permanent disability;
(xviii) recognize any union, (ii) enter into works council or other labor organization as the representative of any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the employees of the Company or any of its the Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Labor Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, except as required by applicable Law;
(mxix) implement or announce any employee layoffs or location closings, in each case other than in the Company shall not, and shall not permit Ordinary Course;
(xx) enter into any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of Contract which contains a change in applicable Law control or similar provision that would be triggered in GAAPconnection with the Merger;
(nxxi) other than in the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not toOrdinary Course, amend or modify in any Contract with any Significant Customer, other than on terms substantially equivalent tomaterial respect, or more beneficial on balance to extent, renew or terminate any lease, sublease, license or other agreement for the Company use or occupancy of any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter intoreal property, or materially amendenter into any new lease, modify or supplementsublease, any Lease license or other Material Contract under which agreement for the costs use or obligations occupancy of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregatereal property; andor
(qxxii) the Company shall notagree, and shall not permit any of its Subsidiaries to, 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 the other terms and conditions of this Agreement, complete control and supervision over their respective businesses.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company West shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws knowingly take or permit any of its Subsidiaries to amend take any action or refrain from taking any action the result of which would be reasonably expected to result in any of the closing conditions set forth in Sections 5.1 and 5.3 hereof not to be satisfied. West covenants and agrees as to itself and its articles of incorporationSubsidiaries that, after the date hereof and prior to the Effective Time, unless East shall otherwise approve in writing (such approval not to be unreasonably withheld or bylaws delayed), and except as otherwise expressly contemplated by this Agreement or (iii) splitas required by applicable Laws, combine or reclassify any shares its business and that of its capital stockSubsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries to, use their respective reasonable best efforts to preserve their business organizations intact and maintain 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 West 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 (A) as otherwise expressly required by this Agreement or applicable Laws, (B) as East may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 4.1(i) of the West Disclosure Letter, West will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments or amend any term of the Shares;
(b) merge or consolidate West or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of West that are not obligors or guarantors of third-party indebtedness, or adopt a plan of liquidation;
(c) acquire assets outside of the ordinary course of business with a value or purchase price in excess of $10,000,000 in the aggregate, other than acquisitions pursuant to Contracts to the extent in effect immediately prior to the execution of this Agreement and as otherwise set forth in Section 4.1(i)(c) of the West Disclosure Letter, and other than capital expenditures within West’s capital expenditure budget as set forth in Section 4.1(i)(j) of the West Disclosure Letter;
(d) other than as set forth in Section 4.1(i)(d) of the West Disclosure Letter and other than the issuance of shares or options pursuant to West Stock Plans, West Awards, West Warrants or West Convertible Debt, 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 West or any its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of West to West 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 other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(e) other than (A) specified encumbrances described in Section 4.1(i)(e) of the West Disclosure Letter; (B) encumbrances for current Taxes or other governmental charges not yet due and payable; (C) mechanics’, carriers’, workmen’s, repairmen’s or other like encumbrances arising or incurred in the ordinary course of business consistent with past practice relating to obligations as to which there is no default on the part of West, or the validity or amount of which is being contested in good faith by appropriate proceedings; and (D) other encumbrances that do not, individually or in the aggregate, materially impair the continued use, operation, value or marketability of any West Aircraft, West Slots, West Gates or West Real Property or the conduct of the business of West and its Subsidiaries as presently conducted; create or incur any Lien material to West or any of its Subsidiaries on any assets of West or any of its Subsidiaries having a value in excess of $10,000,000;
(f) other than as set forth in Section 4.1(i)(f) of the West Disclosure Letter, make any loans, advances or capital contributions to or investments in any Person (other than West or any direct or indirect wholly-owned Subsidiary of West) in excess of $10,000,000 in the aggregate;
(g) declare, set aside or pay any dividend or distribution (whether in cash, stock or property or any combination thereof) on (i) any Shares or West Preferred Shares, or (ii) any shares of capital stock of any Subsidiary (other than wholly-owned Subsidiaries and pro rata dividends payable to holders of interests in non wholly-owned Subsidiaries);
(h) reclassify, split, combine combine, subdivide or reclassify repurchase, redeem 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;
(di) other than quarterly dividends as set forth on Section 4.1(i)(i) of the West Disclosure Letter, 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 West or any of its Subsidiaries, except for (i) indebtedness for borrowed money incurred in the ordinary course of business not to exceed $10,000,000 in the aggregate, (ii) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money on customary commercial terms, (iii) guarantees by West of indebtedness of wholly-owned Subsidiaries of West or guarantees by Subsidiaries of indebtedness of West, or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $10,000,000 of notional debt in the aggregate in addition to notional debt currently under swap or similar arrangements;
(j) except as set forth in Section 4.1(i)(j) of the West Disclosure Letter, make or authorize any capital expenditure;
(k) other than in the ordinary course of business, enter into any Contract that would have been a West Material Contract had it been entered into prior to the date of this Agreement (other than as permitted by Section 4.1(i)(d), (e), (i) or (j));
(l) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP or by applicable Law or except as West, after consultation with East and each party’s independent auditors, determines in good faith is preferable;
(m) settle any litigation or other proceedings before or threatened to be brought before a Governmental Entity for an amount to be paid by West or any of its Subsidiaries in excess of $10,000,000 or which would be reasonably likely to have a material adverse impact on the operations of West or any of its Subsidiaries;
(n) other than in the ordinary course of business, (i) amend or modify in any material respect, or terminate or waive any material right or benefit under, any West Material Contract, or (ii) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $10,000,000;
(o) except as required by Law or by any currently effective tax sharing agreement listed in Section 4.1(i)(o) of the West Disclosure Letter, 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.
(p) sell, lease, license, leaseback, abandon, or otherwise dispose of any assets of West or its Subsidiaries except (i) in the ordinary course of business or obsolete assets or (ii) sales, leases, licenses, leasebacks, abandonments or other dispositions of assets with a fair market value not in excess of $0.075 per Common Share declared 10,000,000 in respect of any one asset and paid not in excess of $15,000,000 in the aggregate other than (x) as set forth in
Section 4.1 (i)(p) of the West Disclosure Letter and (y) any dispositions of assets to the extent used as consideration for acquisitions that are permitted pursuant to Section 4.1(i)(c);
(q) except in connection with the replacement of any existing employee, including any officer, on compensation terms that are not materially different from those of the replaced employee or officer, or except as required pursuant to existing written, binding agreements in effect prior to the date of this Agreement that have been provided to East, or except as West, based upon advice of its counsel, determines in good faith is preferable for purposes of compliance with Section 409A of the Code, or as otherwise required by applicable Law, (i) except with respect to any newly-hired employees (excluding officers), enter into any commitment to provide any severance or termination benefits to (or amend any existing arrangement with) any director, officer or employee of West or any of its Subsidiaries, (ii) increase the benefits payable under any existing severance or termination benefit policy or employment agreement, (iii) except with respect to any newly-hired employees (excluding officers), enter into any employment severance, change in control, termination, deferred compensation or other similar agreement (or amend any such existing agreement) with any director, officer or employee of West or any of its Subsidiaries, (iv) establish, adopt, amend or terminate any West Compensation and Benefit Plan, (v) increase the compensation, bonus or other benefits of, make any new awards under any West Compensation and Benefit Plan to, or pay any bonus to any director, officer, employee, consultant or independent contractor of West or any of its Subsidiaries, except for increases, new awards or payments in the ordinary course of business consistent with past practicespractice for employees who are not among West’s Section 16 Officers, (vi) take any action to fund or in any other way secure the Company shall notpayment of compensation or benefits under any West Compensation and Benefit Plan, except as required pursuant to the terms thereof, (vii) take any action to accelerate the vesting or payment of any compensation or benefits under any West Compensation and shall Benefit Plans, to the extent not permit already required in any such West Compensation and Benefit Plan, (viii) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any West 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, (ix) amend the terms of any outstanding equity-based award, (x) provide for accelerated vesting, removal of restrictions or exercisability of any stock based or stock related awards (including stock options, stock appreciation rights, performance units and restricted stock units) upon a change in control occurring on or prior to the Effective Time, or (xi) enter into any new collective bargaining agreements (or material amendments to existing collective bargaining agreements);
(r) decrease or defer in any material respect the level of training provided to the employees of West or any of its Subsidiaries to, declare, set aside or pay any dividends on (whether the level of costs expended in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices)connection therewith;
(es) neither fail to keep in effect any governmental route authority in effect and used by any Subsidiary of West as of the Company nor any date of its Subsidiaries this Agreement, provided that the restrictions set forth in this Section 4.1(i)(s) shall (i) grant or agree not apply to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases such failure if such failure occurs in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(ft) the Company shall notmake any material West Route changes, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures changes in the ordinary course of business consistent with past practices disclosed practice;
(u) fail to maintain insurance at levels at least comparable to current levels or otherwise in Section 5.01(ja manner inconsistent with past practice;
(v) of the Company Disclosure Schedule by category) take any action, or make any commitments with respect fail to capital expenditures take action, which action or other planned capital expenditures other than failure could result in the ordinary course loss of business consistent West Slots with past practices an aggregate value in excess of $500,000 in the aggregate10,000,000;
(kw) fail to notify East in writing of any incidents or accidents occurring on or after the Company shalldate hereof involving any property owned or operated by West that resulted or could reasonably be expected to result in damages or losses in excess of $10,000,000;
(x) fail to continue, and shall cause its Subsidiaries toin respect of all West Aircraft, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are all material maintenance programs consistent with the Company’s and its Subsidiaries’ past practicespractice (except as required or permitted by applicable Law), (ii) use including using reasonable best efforts not to permit any insurance policy naming it keep all such West Aircraft in such condition as beneficiary or loss payable payee may be necessary to enable to airworthiness certification of such West Aircraft under the Federal Aviation Act to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them maintained in good faithstanding at all times;
(ly) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
(ii) East shall not knowingly take or permit any of its Subsidiaries to take any action or refrain from taking any action the result of which would be reasonably expected to result in any of the closing conditions set forth in Sections 5.1 and 5.2 not to be satisfied. East covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time, unless West shall otherwise approve in writing (such approval not to be unreasonably withheld or delayed), and except as otherwise expressly contemplated by this Agreement or as required by applicable Laws, its business and that of its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries to, use their respective reasonable best efforts to preserve their business organizations intact and maintain 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 East 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 (A) as otherwise expressly required by this Agreement or applicable Laws, (B) as West may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 4.1(ii) of the East Disclosure Letter, East will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments or amend any term of the East Common Stock;
(b) merge or consolidate East or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of East that are not obligors or guarantors of third-party indebtedness, or adopt a plan of liquidation;
(c) acquire assets outside of the ordinary course of business with a value or purchase price in excess of $10,000,000 in the aggregate, other than acquisitions pursuant to Contracts to the extent in effect immediately prior to the execution of this Agreement and as otherwise set forth in Section 4.1(ii)(c) of the East Disclosure Letter, and other than capital expenditures within East’s capital expenditure budget as set forth in Section 4.1(ii)(j) of the East Disclosure Letter;
(d) other than as set forth in Section 4.1(ii)(d) of the East Disclosure Letter and other than the issuance of shares or options pursuant to stock-based benefit plans and under individual employment agreements to which East is a party, 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 East or any its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of East to East 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, redempti
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 (a) During the period commencing on the date hereof and running until the earlier of the Company Disclosure Schedule or as consented to in writing by Parent, Closing Date and the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
VIII (athe “Pre-Closing Period”), except (i) as expressly contemplated, required or permitted by this Agreement (including, for the business avoidance of doubt, the Vested Units Exchanges), (ii) as required by applicable Law, (iii) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned), (iv) for any action taken or omitted to be taken, in order to comply with any COVID-19 Measures or which is otherwise taken or omitted to be taken reasonably and operations in good faith in response to COVID-19 (provided, that, with respect to actions taken or omitted to be taken in reliance on this clause (iv), 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), or (v) as set forth on Section 6.1 of the Company Disclosure Schedule, the Company will, and will cause its Subsidiaries shall be conductedto, use its and the books and records of the Company and its Subsidiaries shall be maintained, only their commercially reasonable efforts to (A) conduct their businesses in the ordinary course of business consistent with past practice and the Company and its Subsidiaries shall use their commercially reasonable best efforts to (B) preserve intact in all material respects their current respective assets, properties, business organizations, keep available the services of their current officers organizations and employees and preserve their relationships with their material customerspartners, clients, suppliers, licensors, licensees, advertisers, distributors and other Persons with which it has material third parties having business dealings dealings; provided that no action by the Company or its Subsidiaries with them and respect to preserve the goodwill matters specifically permitted by any provision of their respective businesses;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) During the Pre-Closing Period, except (1) as expressly contemplated, required or permitted by this Agreement, (2) as required by applicable Law, (3) as approved in writing by Parent (such approval not to be unreasonably withheld, delayed or conditioned) or (4) as set forth on Section 6.1 of the Company shall Disclosure Schedule, the Company will not, and shall not permit any of will cause its Subsidiaries not to, :
(i) authorize for issuance, issue, deliver, sell (x) adopt any change in the certificate of incorporation or agree bylaws of the Company or commit to issue, sell or deliver (whether through y) adopt any change in the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock comparable organizational document of any of its Subsidiaries, the Company’s Subsidiaries (including any other securities or any securities convertible or exercisable into, or any rights, warrants or options amendment to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom intereststhe Focus LLC Agreement), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; ;
(ii) repurchase, redeem merge or otherwise acquire any shares of the capital stock or other equity interests of consolidate the Company or any of its Subsidiaries (including, without limitation, securities exchangeable forwith any other Person, or optionsrestructure, warrantsreorganize, callsrecapitalize or completely or partially liquidate or dissolve or otherwise enter into any agreement or arrangement imposing restrictions on the assets, commitments operations or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security business of the Company or any of its Subsidiaries, except (A) as required by this Agreementother than restructuring, (B) as set forth in Section 5.01(b) reorganization, recapitalization, liquidation or dissolution of any wholly owned Subsidiary of the Company Disclosure Schedulethat are immaterial to the Company and its Subsidiaries, in connection with accelerating the vesting schedules of the Options taken as a whole, and to the extent required 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 the Stock Plans or the agreements pursuant to which such Options were granted or (CSection 6.1(b)(xiii) in connection the form of a merger or consolidation (provided, further, that (x) the use of such structure is consistent with terminating past practice and (y) neither the Options and the Stock PlansCompany nor Focus LLC is merging or consolidating with any other Person);
(ciii) issue, sell, pledge, encumber, dispose of or grant, or authorize the issuance, sale, pledge, encumbrance, disposition or grant of, any shares of capital stock of the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of 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 (iiA) amend any such transaction among the Company and its wholly-owned Subsidiaries or otherwise change its certificate among the Company’s wholly-owned Subsidiaries, or (B) any grant or issuance of incorporation shares of Company Stock (1) in exchange for Focus LLC Units in accordance with the terms of the Focus LLC Agreement, (2) in respect of any exercise of Company Options or bylaws (3) in settlement of any Company RSUs;
(iv) make any loans, advances or permit capital contributions to or investments in any Person (other than to the Company or any of its Subsidiaries wholly-owned Subsidiaries);
(v) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, except for (A) 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 and shall not permit any (B) distributions in accordance with Section 5.2 of the Focus LLC Agreement in amounts reasonably determined by Focus LLC to be no greater than necessary to satisfy its Subsidiaries obligations under Section 5.2 of the Focus LLC Agreement to splitall of the members of Focus LLC consistent with past practice, combine or reclassify any shares including, to the extent consistent with past practice, making quarterly tax distributions and utilizing the numerically stated tax rate set forth in the definition of its capital stock“Assumed Tax Rate” in the Focus LLC Agreement;
(dvi) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practicesreclassify, the Company shall notsplit, and shall not permit any of its Subsidiaries tocombine, declaresubdivide or redeem, set aside purchase or pay any dividends on (whether in cashotherwise acquire, stock directly or other property), or make any other distributions in respect ofindirectly, any of its capital stock (or securities convertible or exchangeable into or exercisable for any shares of its capital stock except for dividends paid (A) any such transaction solely among any of the Company’s wholly-owned Subsidiaries, (B) acquisitions of shares of Company Stock or Focus LLC Units in satisfaction of withholding obligations in respect of Company Equity Awards, or (C) acquisitions of Focus LLC Units in connection with an exchange of such Focus LLC Units for shares of Company Stock or cash in accordance with the terms of the Focus LLC Agreement;
(vii) create, incur, assume or guarantee any Indebtedness for borrowed money or issue any debt securities or guarantees of the same or any other Indebtedness, except for (A) borrowings in the ordinary course of business under the Company’s Existing Credit Document (other than Indebtedness incurred in reliance on the Maximum Incremental Facilities Amount; (B) guarantees or credit support provided by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall of the obligations of the Company or any of its Subsidiaries in the ordinary course of business consistent with past practice to the extent such Indebtedness is in existence on the date of this Agreement or incurred in compliance with clause (iA) grant of this Section 6.1(b)(vii) and (C) any Indebtedness solely among the Company and its wholly-owned Subsidiaries or agree to any increase in any manner among the compensation or benefits of any current or former director, officer or employee, except increases Company’s wholly-owned Subsidiaries;
(A) other than in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreementsenter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement; provided, bonus plans and other agreements and arrangements listed or that no Contract of the type described in Section 5.01(e5.1(k)(i)(B) shall be entered into without the prior written consent of Parent, (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 expirations of any such Contract in accordance with its terms), (C) amend, modify or waive in any material respect or terminate any management agreement; provided that this clause (C) shall not restrict any amendment, modification or waiver reasonably necessary to (x) add or remove principals as parties to such management agreement in the ordinary course of business or (y) adjust for economics consistent with acquired earnings and past practice in connection with acquisitions completed following the date hereof in accordance with the terms hereof, or (D) amend, modify or waive in any material respect any Contract containing a minimum purchase, “earnout” or other contingent or deferred payment obligation of the Company Disclosure Schedule and its Subsidiaries;
(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 or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization);
(x) settle any Action for an amount in connection with accelerating excess of $500,000 individually or $1 million in the vesting schedules aggregate other than (A) any settlement 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 Options and terminating the Options and the Stock Plans, (iiapplicable insurance policy) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of by insurance coverage amounts maintained by the Company or any of its Subsidiaries, (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 (iii) except as set forth in Section 5.01(eor the notes thereto) of the Company Disclosure Scheduleincluded in the Company Reports (with materiality measured relative to the amount so reflected or reserved, as may be required if any) filed prior to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
, and (fC) settlements or compromises of any Action where the Company shall not, and shall not permit or any of its Subsidiaries tois the plaintiff and is receiving payment in connection with such settlement or compromise; provided that, in the case of each of the foregoing clause (A), (B) and (C), the settlement or compromise of such Action does not (x) enter into impose any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing non-de minimis restriction on the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities operations of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” Subsidiaries (or other agreement to maintain any financial statement condition of another person Parent or enter into any arrangement having the economic effect of any of its Subsidiaries after the foregoing; or Closing) and (y) include any non-de minimis non-monetary or injunctive relief, or the admission of wrongdoing, by the Company or any of its Subsidiaries or any of their respective officers or directors;
(xi) assign, transfer, sell, lease, license or subject license, encumber (other than Permitted Liens), abandon, permit to any Lien lapse, or otherwise dispose of, of any material assets or agree property (including any material Intellectual Property Rights) except (A) as may be required by a Governmental Authority to sell, lease permit or subject to any Lien facilitate the consummation of the Mergers or otherwise dispose of, any of its properties or assets the other transactions contemplated in excess of $25,000 individually or $50,000 in this Agreement solely to the aggregate other than (i) extent required pursuant to existing contracts and commitments described in Section 5.01(g6.5 or (B) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or transactions among the Company and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries; provided, that, for the avoidance of doubt, the loss of a customer or client in the ordinary course of business shall not be covered by this Section 6.1(b)(xi);
(hxii) neither except for such actions required by Benefit Plans in existence as of the date hereof: (A) increase or decrease the compensation or other benefits payable or provided to any of the current or former employees or other Service Providers of the Company nor or any of its Subsidiaries shall adopt or put into any of the Employer Entities (other than, solely with respect to the Company’s Subsidiaries other than the Employer Entities, in the ordinary course of business consistent with past practice and as permitted by the relevant Subsidiary’s management agreement with the Company, as in effect a plan on the date hereof and substantially in the form made available to Parent); (B) increase or accelerate or commit to increase or accelerate the funding, payment or vesting of complete compensation or partial liquidationbenefits provided under any Benefit Plan (other than under any Benefit Plan maintained by one of the Company’s Subsidiaries other than the Employer Entities in the ordinary course of business consistent with past practice and as permitted by the relevant Subsidiary’s management agreement with the Company in effect on the date hereof and substantially in the form made available to Parent); (C) grant or promise to grant any cash or equity or equity-based incentive awards, dissolutionbonus, mergerchange of control, consolidation, restructuring, recapitalization severance or retention award to any of its current or former employees or other reorganization Service Providers of the Company or any of its Subsidiaries (other than, solely with respect to the Company’s Subsidiaries other than any transaction specifically contemplated by this Agreement);
(i) except as set forth the Employer Entities, in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which and as permitted by the relevant Subsidiary’s management agreement with the Company as in effect on the date hereof and substantially in the form made available to Parent); (D) hire, engage, furlough or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures terminate (other than pursuant for cause) the employment of any employee, officer, director, or other Service Provider of the Employer Entities, in each case with respect to commitments prior this clause (D), whose annualized compensation exceeds $400,000 (other than, solely with respect to the date hereof or Company’s Subsidiaries other planned capital expenditures than the Employer Entities, in the ordinary course of business consistent with past practices disclosed practice and as permitted by the relevant Subsidiary’s management agreement with the Company, as in Section 5.01(jeffect on the date hereof and substantially in the form made available to Parent); or (E) (i) establish, adopt, enter into, terminate or materially amend any material Benefit Plan of the Company Disclosure Schedule by categoryor the Employer Entities (or any plan, program, agreement or arrangement that would be a Benefit Plan of the Company or the Employer Entities if in effect on the date hereof) or make (ii) establish, adopt, enter into, terminate or materially amend any commitments with respect to capital expenditures material Benefit Plan of any Subsidiaries of the Company other than the Employer Entities (or other planned capital expenditures any plan, program, agreement or arrangement that would be a Benefit Plan of any such Subsidiaries if in effect on the date hereof), in each case under this clause (ii), other than in the ordinary course of business consistent with past practices in excess of $500,000 in practice and as permitted by the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent relevant Subsidiary’s management agreement with the Company’s , as in effect on the date hereof and its Subsidiaries’ past practicessubstantially in the form made available to Parent; provided, however, that nothing in this clause (iiE) use reasonable best efforts not to shall permit any insurance policy naming it as beneficiary or loss payable payee actions to be canceled or terminatedestablish, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not toadopt, enter into, terminate or materially amendamend the types of benefit plans and arrangements described in Section 5.1(i)(iv);
(xiii) acquire any business, modify assets or supplementcapital stock of any Person or division thereof, any Lease whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation or otherwise), other Material Contract under which than (A) the costs acquisition of assets from vendors or obligations suppliers of the Company or any of its Subsidiaries resulting from in the ordinary course of business, (B) (x) the acquisition of wealth management businesses or assets of such amendmentbusinesses (other than any Person registered or required to be registered as a “broker” or “dealer” with the SEC under the Exchange Act) and (y) joint ventures with or other minority investments in wealth management businesses (other than any Person registered or required to be registered as a “broker” or “dealer” with the SEC under the Exchange Act), modification in the case of this clause (B), so long as such acquisitions, joint ventures or supplement would other minority investments (x) do not exceed $25,000 per annum 10 million (including “earnouts” or other contingent payments) individually and $50 million (including “earnouts” or $100,000 per annum for all such amendments, modifications and supplements other contingent payments) in the aggregate; and
, in each case, based on the Company’s best estimate (qmade in good faith) of such consideration and payments (including “earnouts” and other contingent payments) as set forth in the final investment committee memorandum (and used in the Company’s underwriting assumptions) at the time of the entry into the definitive agreement providing for such acquisition, joint venture or minority investment, (y) would not prevent, materially delay or materially impede the transactions contemplated hereby and (z) would not require Parent, Stone Point or their respective Affiliates to make any additional filing or notice with or disclosure to any Governmental Authority, other than those filings or notices expressly required by this Agreement or the disclosure of information that is consistent with previous press releases, public disclosures or public statements made jointly by Parent and the Company shall notor to the extent that they have been reviewed and previously approved by both Parent and the Company, and shall not permit or (C) (x) any pending acquisition of its Subsidiaries toany Person, agree business or commit to do any assets (whether by merger, sale of stock, sale of assets or otherwise) with an executed letter of intent or purchase agreement that is set forth on Section 6.1(b)(xiii) of the foregoing.Company Disclosure Schedule or (y) any other acquisition of an
Appears in 1 contract
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the Original Date and prior to the Acceptance Date (unless Parent shall otherwise approve in writing, such approval not to be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 6.1 of the Company Disclosure Schedule or Letter) and except as consented to in writing required by Parentapplicable Law, the Company covenants and agrees that during the period from the date business of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in the ordinary and usual course of business consistent with past practice and to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially respective reasonable best efforts to preserve their business organizations intact their current business organizationsand maintain existing relations and goodwill with Governmental Entities, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensorsemployees and business associates. Without limiting the generality of the foregoing and in furtherance thereof, licenseesfrom the Original Date until the Acceptance Date, advertisersexcept (i) as otherwise contemplated by this Agreement, distributors (ii) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed), (iii) as is required by applicable Law or any Governmental Entity or (iv) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(A) adopt or propose any change in its articles of incorporation or bylaws or other material third parties having business dealings with them and to preserve the goodwill of their respective businessesapplicable governing instruments;
(bB) merge or consolidate the Company shall not, and shall not permit or any of its Subsidiaries towith any other Person, except for any such transactions among wholly owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate;
(iC) 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 $15 million in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in effect as of June 7, 2007;
(D) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize for the issuance, issuesale, deliverpledge, sell disposition, grant, transfer, lease, license, guarantee or agree or commit to issueencumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable forother than (1) the issuance of Shares upon the exercise of Company Options or (2) 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, calls, commitments warrants or other rights of any kind to acquire, 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 equity interests of than the Company or any direct or indirect wholly owned Subsidiary of the Company) in excess of $15 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 any of its Subsidiaries); 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;
(iiiG) amendreclassify, modify split, combine, subdivide or waive redeem, purchase or otherwise acquire, directly or indirectly, any term of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than the acquisition of any outstanding Shares tendered by current or former employees or directors in connection with the exercise of Company Options);
(H) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person (other than a wholly owned Subsidiary of the Company), 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 indebtedness for borrowed money incurred in the ordinary course of business;
(AI) as required by this Agreement, (B) except as set forth in the capital budgets set forth in Section 5.01(b6.1(a)(I) of the Company Disclosure ScheduleLetter, make or authorize any capital expenditure in connection with accelerating excess of $15 million in the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansaggregate;
(cJ) 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 or as required to address Option Accounting Issues;
(K) settle any litigation or other proceedings before a Governmental Entity or otherwise for an amount in excess of $10 million or any obligation or liability of the Company shall not in excess of such amount;
(iL) make or change any material Tax election or tax accounting method, or settle or compromise any material Tax liability other than in the ordinary course of business consistent with past practice;
(M) transfer, sell, transfer or lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or agree to sellotherwise dispose of any assets, transfer product lines or pledgebusinesses of the Company or its Subsidiaries, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership including capital stock of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of in each case which are material to the Company and its Subsidiaries taken as a whole, other than inventory, supplies and other assets in the ordinary course of business and other than pursuant to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries Contracts in effect prior to split, combine or reclassify any shares of its capital stockthe Original Date;
(dN) other than quarterly dividends not except as expressly contemplated by this Agreement, required pursuant to Benefit Plans in excess of $0.075 per Common Share declared effect prior to the Original Date and paid consistent with past practices, listed on the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property)Company’s Disclosure Letter, or make any other distributions in respect ofas otherwise required by applicable Law, any of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i1) grant or agree to provide any increase in any manner the compensation severance or termination payments or benefits of to any current or former director, officer Elected Officer or employeeemployee of the Company or any of its Subsidiaries, except increases except, in the case of employees who are not Elected Officers, in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements(2) increase the compensation, bonus plans and other agreements and arrangements listed perquisites or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with benefits payable to any current or former director, officer, Elected Officer or employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth except, in Section 5.01(e) the case of employees who are not Elected Officers of the Company Disclosure ScheduleCompany, as increases in base salary in the ordinary course of business consistent with past practice, (3) grant any equity or equity-based awards that may be required to comply with applicable Law and as provided or otherwise contemplated settled in this Agreement (includingShares, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan preferred shares 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its SubsidiariesSubsidiaries or the value of which is linked directly or indirectly, guarantee in whole or in part, to the price or value of any debt securities of othersShares, enter into any “keep well” preferred shares or other agreement to maintain any financial statement condition of another person Company securities or enter into any arrangement having Subsidiary securities, (4) accelerate the economic effect vesting or payment of any of compensation payable or benefits provided or to become payable or provided to any current or former director, Elected Officer or employee; provided that notwithstanding the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall notbe permitted, at any time prior to the Effective Time, to pay any annual or quarterly bonus earned and shall not permit determined in the ordinary course earlier than it would otherwise have been paid in order to pay such amount in the calendar year prior to the calendar year in which it would otherwise have been paid, regardless of when such bonus payments have historically been paid or (5) terminate or materially amend any of its Subsidiaries to, (i) enter intoexisting, or materially amendadopt any new, modify or supplement any Contract outside Benefit Plan (other than changes made in the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)applicable Laws, or (ii) waive, release, grant, assign, modify or transfer in either case that do not materially increase the costs of any of its material rights or claims (whether such rights or claims arise under a Contract or otherwiseBenefit Plans);
(jO) the Company shall notenter into, and shall not permit amend or extend any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof material collective bargaining agreement or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregatelabor agreement;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (iiP) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not tointo, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations agreement of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements type described in the aggregateSection 5.1(r); andor
(qQ) the Company shall notexcept as provided in Section 6.2 and Section 8.3(a), and shall not permit any of its Subsidiaries toagree, agree authorize or commit to do any of the foregoing.
(b) Notwithstanding anything to the contrary in the foregoing, the parties shall work together in good faith to agree upon actions intended to ameliorate, to the extent reasonably practicable, any adverse tax impact imposed under Section 409A of the Code to employees arising out of or related to Option Accounting Issues.
(c) The Company shall consult with Parent reasonably in 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 three-year operating plan, as previously provided to Parent; and in each case shall consider in good faith the reasonable recommendations of Parent in connection therewith.
(d) The Company will use its reasonable best efforts to conclude its internal investigation regarding the Company’s practices with respect to the issuance of stock options and to complete, if required, any restatement of the Company’s financial statements, in each case as promptly as reasonably practicable after the Original Date, and shall keep Parent informed, on a current basis, of the status with respect thereto and with respect to any other investigation or litigation relating directly to Option Accounting Issues.
(e) The Company shall, except as prohibited by applicable Laws 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 respect to any criminal or regulatory investigation or action involving the Company or any of its Subsidiaries.
Appears in 1 contract
Sources: Merger Agreement (Biomet Inc)
Interim Operations. (a) Except as otherwise contemplated (i) required by this Agreement Agreement, (ii) required by applicable Law, (iii) approved in writing by Parent (such approval not to be unreasonably withheld, delayed or as conditioned) or (iv) set forth in on Section 5.01 6.1(a) of the Company Disclosure Schedule or as consented to in writing by ParentSchedule, the Company covenants and agrees that during the period from the date of this Agreement to until the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of Time, the Company will, and will cause its Subsidiaries shall be conductedto, use its and the books and records of the Company and its Subsidiaries shall be maintained, only their reasonable best efforts to conduct their businesses in the ordinary course of business and consistent with past practice and, to the extent consistent therewith, the Company shall, and shall cause its Subsidiaries shall to, use its and their commercially reasonable best efforts to preserve their business organizations intact their current and to maintain existing significant business organizationsrelationships (including customers and suppliers, keep available the services of their current officers but excluding Parent and employees its Affiliates) and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings Governmental Authorities; provided that no action by the Company or its Subsidiaries with them and respect to preserve the goodwill matters specifically addressed by any provision of their respective businesses;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 shall Disclosure Schedule, from the date of this Agreement until the Effective Time, the Company will not, and shall not permit any of will cause its Subsidiaries not to, :
(i) authorize for issuance(A) adopt, issue, deliver, sell propose or agree submit to shareholder approval any change in the articles of incorporation or commit to issue, sell bylaws of the Company or deliver (whether through B) adopt or propose any change in the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock comparable organizational document of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as Subsidiary of the date hereof; Company;
(ii) repurchase, redeem (A) merge or otherwise acquire any shares of the capital stock or other equity interests of consolidate the Company or any of its Subsidiaries (including, without limitation, securities exchangeable forwith any other Person, or options(B) restructure, warrantsreorganize or completely or partially liquidate or otherwise enter into any agreement or arrangement imposing, callsindividually or in the aggregate, commitments any changes or rights of any kind to acquirerestrictions on the assets, capital stock operations or other equity interests business of the Company or any of its Subsidiaries); or ;
(iii) amend(A) acquire (including by merger, modify consolidation or waive acquisition of equity interests or assets or any term other business combination) (x) any corporation, partnership or other business organization or (y) any assets outside of the ordinary course of business consistent with past practice from any other Person in any transaction or series of related transactions or (B) make any loans, advances or capital contributions to any Person, other than, in the case of clause (A) and (B), for consideration in excess of $1 million in the aggregate, and, in the case of clause (B), other than (1) to the Company or any of its wholly owned Subsidiaries, (2) extensions of credit terms to customers outside the United States in the ordinary course of business consistent with past practice and (3) loans or advances made by the Company or any of its Subsidiaries to employees in the ordinary course of business consistent with the terms set forth in Section 6.1(b)(iii) of the Company Disclosure Schedule;
(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, 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 wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, (B) 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 or granted after the date of this Agreement not in violation with this Agreement, in each case, in accordance with their terms or (C) the grant of Company Equity Awards required to be granted by any Company Benefit Plan as in effect on the date hereof;
(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 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 of its capital stock or 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 satisfaction of withholding obligations 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, guarantee, endorse, suffer to exist or otherwise be liable with respect to any Indebtedness for borrowed money or guarantees of the same or any other Indebtedness incurred outside the ordinary course of business not consistent with past practice, 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) borrowings in the ordinary course of business under the Company’s credit facilities as required by this Agreementin effect on the date hereof or under facilities that replace or refinance such existing credit facilities (provided that such facilities (x) can be repaid on the Closing Date in connection with the Closing without premium or penalty, (y) do not increase the aggregate amount of the commitments thereunder relative to the facilities so replaced or refinanced, and (z) are on terms substantially consistent with or more favorable to the Company than the facilities so replaced or refinanced), (B) as set forth in Section 5.01(b) guarantees by the Company of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any obligations of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases incurred in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans (C) Indebtedness for borrowed money incurred for expenditures permitted by any other provision of this Section 6.1(b) and associated schedules of the Company Disclosure Schedule;
(viii) other agreements and arrangements listed or described than in accordance with the Company’s capital expenditure budget set forth on Section 5.01(e6.1(b)(viii) of the Company Disclosure Schedule and or as required to comply with Section 6.1(b)(xvi), incur or commit to any capital expenditure or expenditures, except capital expenditures of less than $500,000 in the aggregate;
(ix) other than in the ordinary course of business or in connection with accelerating any matter to the vesting schedules extent such matter is permitted by any other clause of the Options and terminating the Options and the Stock Plansthis Section 6.1(b), (iiA) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate Contract that would have been a Material Contract had it been entered into prior to the date of the Company or any of its Subsidiaries, this Agreement or (iiiB) except as set forth amend, modify in Section 5.01(e) of the Company Disclosure Scheduleany material respect, as may be required to comply with applicable Law and as provided assign or otherwise contemplated in this Agreement terminate any Material Contract (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit than expirations of any current or former director, officer or employee in existence on the date hereof;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 Contract in accordance with GAAP and (vits terms) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor otherwise waive, release or assign any of its Subsidiaries shall adopt material rights, claims or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization benefits of the Company or any of its Subsidiaries thereunder;
(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 statutory or regulatory accounting rules or 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, suit, claim, hearing, arbitration, investigation or other than proceedings for an amount in excess of $100,000 in the aggregate per annum (after taking into account insurance coverage maintained by the Company or its Subsidiaries) or which would reasonably be expected to (A) prevent, materially delay or materially impair the consummation of the Merger or any transaction specifically other transactions contemplated by this Agreement);
, (iB) except as set forth result in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit or any of its Subsidiaries tobeing subject to any criminal liability, equitable relief or admission of wrongdoing;
(xii) (A) make, change or revoke any material Tax election, (iB) file any material amended Tax Return, (C) adopt or change any accounting method or accounting period for Taxes, (D) settle or compromise any material Tax liability or any material assessment, claim, dispute, audit, examination or other proceeding in respect of Taxes, (E) surrender any claim for a material refund of Taxes, (F) request or consent to a waiver of the statute of limitations or extension of time with respect to any material Tax or Tax Return, or (G) enter intointo any closing agreement relating to Taxes;
(xiii) sell, lease, license, encumber (including by the grant of any option thereon), lapse, abandon or materially amendotherwise dispose of any material assets or property or Intellectual Property Rights except (A) pursuant to existing contracts or commitments, modify or supplement any Contract outside (B) other than with respect to Intellectual Property Rights, in the ordinary course of business consistent with past practice under which and in no event in an amount exceeding $100,000 individually or $500,000 in the Company or any aggregate, (C) with respect to Intellectual Property Rights, the grant of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures non-exclusive licenses in the ordinary course of business consistent with past practices disclosed in Section 5.01(jpractice or (D) dispositions of surplus, obsolete or worthless assets no longer useful to the operation of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregateits Subsidiaries;
(kxiv) except as required by Benefit Plans as in effect on the Company shall, and shall cause its Subsidiaries todate hereof, (iA) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with increase the compensation or benefits (including severance) payable or provided to the Company’s and its Subsidiaries’ past practicesdirectors or employees, (iiB) use reasonable best efforts not to permit enter into any insurance policy naming it as beneficiary employment, change of control, severance or loss payable payee to be canceled retention agreement with, or terminatedgrant any incentive award to, any employee of the Company, (iiiC) maintain all Leased Real Property (includingestablish, without limitationadopt, the furnitureenter into, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to amend or terminate any casualty Benefit Plan or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, any arrangement that would have been a Benefit Plan had it been entered into prior to this Agreement, (D) take any action to accelerate the imposition vesting or lapsing of restrictions or payment, or fund or in any Lien other way secure the payment, of compensation or material penalty all taxesbenefits under any Benefit Plan, water and sewage rents(E) hire any employee or engage any independent contractor (who is a natural person), assessments and insurance premiums affecting such real property or contest them in good faith(F) enter into or amend or terminate any collective bargaining, labor union, works council or similar agreement;
(lxv) except as make any material changes to the operation of the Specific Business other than (A) changes effected by the construction of the planned new brewing facilities at Lot 16 in Kailua-Kona (the “Kona Brewery”) or (B) actions contemplated by the capital expenditure budget set forth in on Section 5.01(l6.1(b)(viii) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(mxvi) fail to use commercially reasonable efforts to complete the Company shall not, and shall not permit any of its Subsidiaries to, change any construction of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used Kona Brewery on the schedule set by the Company or and made available to Parent prior to the date of this Agreement; provided, for the avoidance of doubt, that this Section 6.1(b)(xvi) shall not require the Company to make expenditures that would cause any of its Subsidiaries as overall cost of the date hereof, except as may be required as Kona Brewery to exceed by a result of a change in applicable Law or in GAAPmaterial amount the aggregate anticipated costs for the Kona Brewery;
(nxvii) fail to comply with any obligations under the Company shall notclass action settlement agreement between ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ et al. and the Company, and shall not permit any of its Subsidiaries todated May 23, take2019, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries fail to use their respective commercially reasonable best efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of complete all actions required by such Contract settlement agreement prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregateClosing; andor
(qxviii) the Company shall notagree, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
(c) Parent agrees that neither it, and shall cause its Affiliates not to, acquire (including by merger, consolidation or acquisition of equity interests or assets or any other business combination) or make any investment in or enter into any joint venture with any corporation, partnership or other business organization engaged in the brewing and sale of alcohol malt beverages in the United States or any interest therein if such acquisition, investment or joint venture requires a filing under the HSR Act and would be reasonably expected to prevent, materially impair or materially delay satisfaction of the condition described in Section 7.1(b).
(d) 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 and its Subsidiaries prior to the 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.
Appears in 1 contract
Interim Operations. Except (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 this Agreement the Final Step Plan) or as set forth (3) otherwise expressly disclosed in Section 5.01 5.01(a) of the Company Disclosure Schedule or as consented to in writing by ParentLetter), the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall notshall, and shall not permit any cause each of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit use its reasonable best efforts to issue, sell or deliver (whether through conduct the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases Retained Business in the ordinary course of business consistent with past practice, increases and bonuses 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 under existing employment agreements, bonus plans by the Transaction Documents (including in connection with the Separation and other agreements and arrangements listed the Distribution) or described (3) otherwise expressly disclosed in Section 5.01(e5.01(b) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereofLetter), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, not and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire :
(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 other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and Company that would not prevent, delay or impair the Initial Merger or the other Transactions), (B) split, combine, subdivide or reclassify its territorial possessions;
outstanding shares of capital stock (g) except for any such transaction by a wholly owned subsidiary of the Company shall notwhich remains a wholly owned Subsidiary after consummation of such transaction), and shall not permit (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 to, capital stock (xexcept for (1) incur, assume, be responsible for any dividends or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for distributions paid by a direct or pre-pay any Indebtedness, guarantee, indirect wholly owned Subsidiary of the Company to another direct or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities indirect wholly owned Subsidiary of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; Company or (y2) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in normal semiannual cash dividends on the aggregate other than (i) pursuant to existing contracts and commitments Common Stock as described in Section 5.01(g5.01(b)(i) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure ScheduleLetter), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (iiD) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any voting of its Subsidiariescapital stock, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.or
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. 6.1.1 PSI shall, and PSI shall cause Phoenix to: (a) carry on its business only in the Ordinary Course of Business substantially the same manner as heretofore conducted; (b) except as they may expire or be terminated by any other party thereto, keep in full force and effect, and not cause a default of any of its obligations under, any PSI Commitments; (c) keep in full force and effect the insurance coverage in effect on the date hereof to the extent that such insurance continues to be reasonably available; (d) maintain, renew, keep in full force and effect and preserve its business organization and material rights and Licenses and use commercially reasonable efforts to (i) retain its present employee force and (ii) maintain its existing, or substantially equivalent, relationships with others having business relations with it and to use commercially reasonable efforts to maintain the continuance of its general customer and supplier relationships; and (e) duly comply with all Laws applicable to it and to the conduct of its business, except where the failure to so comply would not, individually or in the aggregate, have a PSI Material Adverse Effect.
6.1.2 Except with the prior written consent of IVAX or as otherwise contemplated required or permitted by this Agreement or as set forth in Section 5.01 of the Company Disclosure contemplated by Schedule or as consented to in writing by Parent6.1, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company PSI shall not, and PSI shall not permit cause Phoenix to not, directly or indirectly, do any of the following: (a) voluntarily or involuntarily sell, transfer, surrender, abandon or dispose of any of its Subsidiaries toproperties, assets or rights (tangible or intangible) other than in the Ordinary Course of Business or disclose any material proprietary or confidential information to any third party not a party to a written confidentiality agreement with or otherwise under an obligation of confidentiality to PSI or Phoenix; (b) make any mortgage or pledge or subject itself or its properties or assets to any Lien, except for the Lien of current Taxes or assessments not yet delinquent, Liens and deposits (including mechanics’, materialmen’s and other similar Liens) arising in the Ordinary Course of Business securing amounts not yet due and payable; (c) enter into or materially amend any Contract except in the Ordinary Course of Business; (d) grant any increase in the compensation payable or to become payable to officers or employees (including, without limitation, any such increase pursuant to any bonus, pension, profit-sharing plan or other PSI Plan or commitment), except in the Ordinary Course of Business or pursuant to the provisions of existing obligations; (e) incur, assume or take any property subject to any liability, except in the Ordinary Course of Business; (f) alter the manner of keeping its books, accounts or records, or change in any manner the accounting practices therein reflected, other than alterations or changes required by GAAP or applicable Law; (g) dispose of or permit a lapse (to the extent that such lapse is reasonably preventable) of any rights to any material intangible personal property, including, without limitation, Intellectual Property, other than in the Ordinary Course of Business; (h) amend its Certificate of Incorporation or Bylaws; (i) authorize for issuance, issue, deliver, sell or agree expend or commit to expend funds for capital additions in excess of fifty thousand dollars ($50,000) that is not reflected in either the 2004 or 2005 Capital Additions Budgets previously made available to IVAX or its representatives; (j) adopt or amend any PSI Plan; (k) cancel, waive or release any debts, rights or claims, except in the Ordinary Course of Business, but in no event in excess of two hundred fifty thousand dollars ($250,000); (l) write off the value of any inventory or any accounts receivable or increase the reserves for obsolete, damaged, spoiled or otherwise not useable inventory or uncollectible receivables, except in accordance with GAAP; (m) enter into any indemnification, severance, employment or consulting Contract with any Person who is not a current officer, employee or consultant of PSI or Phoenix other than in the Ordinary Course of Business, or enter into any indemnification, severance, employment or consulting Contract with any current officer, employee or consultant of PSI or Phoenix; (n) enter into any transaction with an Affiliate (other than transactions with customers and suppliers who are Affiliates entered into in the Ordinary Course of Business for goods or services on terms and at prices customary for arm’s-length transactions with third parties for such goods and services); (o) issue, sell or deliver (whether through the authorize for issuance or granting sale, shares of any class or series of its securities (including, without limitation, by way of stock split or dividend) or any subscriptions, options, commitments, subscriptionswarrants, rights or convertible securities or enter into any agreements or commitments of any character obligating it to issue or sell any such securities; (p) redeem, purchase or otherwise)otherwise acquire, pledge directly or otherwise encumber indirectly, any shares of its capital stock or the capital stock of any of its Subsidiariesoption, any warrant or other securities right to purchase or any securities convertible or exercisable into, or any rights, warrants or options to acquire, acquire any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (iiq) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside declare or pay any dividends on dividend or other distribution (whether in cash, stock or other property), or make any other distributions in ) with respect of, any of to its capital stock (except for dividends other than the quarterly dividend on the PSI S▇ ▇▇▇▇ A Preferred Stock and the PSI Series B Preferred Stock that shall continue to accrue in accordance with the terms of PSI’s Certificate of Incorporation but shall not be paid by direct or indirect wholly owned Subsidiaries to the Company or to in cash); (r) other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases than in the ordinary course Ordinary Course of business consistent with past practiceBusiness, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any a new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not which if in existence on the date hereof or amend or modify or terminateof this Agreement would have been at forth on Schedule 3.28.1 as a PSI Commitment, or pay amend, terminate or elect not to renew any benefit that is not required by, any Benefit Plan or other 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;
PSI Commitment; (f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(is) except as set forth in permitted by this Section 5.01(i) of the Company Disclosure Schedule6.1.2, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating which would render any of PSI’s or Phoenix’s representations or warranties materially untrue or misleading, which would be a material breach or violation of any of PSI’s or Phoenix’s covenants or which would render the satisfaction of any condition to the filing of Closing impossible; (t) take any Tax Return action which results or the payment of any Taxcould reasonably be expected to result in a PSI Material Adverse Effect; or (u) agree, if such electionwhether in writing or otherwise, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing. In addition, neither PSI nor Phoenix shall incur or pay expenses for professional services performed prior to the Closing in connection with the transactions contemplated by this Agreement in excess of an aggregate of $575,000.
Appears in 1 contract
Sources: Stock Purchase Agreement (Ivax Corp)
Interim Operations. Except (a) The Company covenants and agrees that, after the date hereof until the Effective Time (unless Parent shall otherwise approve in writing), and except as otherwise contemplated expressly permitted by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to required in writing by Parenta Governmental Entity (including Gaming Authorities) of competent jurisdiction or required by applicable Laws (including Gaming Laws), the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company it shall and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conduct their businesses in all material respects in the ordinary course of business and and, to the extent consistent with the foregoing, the Company and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve intact their current business organizationsorganizations substantially intact, maintain satisfactory relationships with customers and suppliers having business dealings with them, maintain the effectiveness of the Company’s Licenses and keep available the services of their current officers key employees. Without limiting the generality 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 delayed, withheld or conditioned) (C) as required in writing by a Governmental Entity (including Gaming Authorities) of competent jurisdiction or required by applicable Laws (including Gaming Laws) or (D) as set forth in Section 6.1(a) of the Company Disclosure Schedule, the Company will not and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve will cause its Subsidiaries not to:
(i) adopt any change in the goodwill certificate of their respective businessesincorporation or bylaws of the Company;
(bii) merge or consolidate the Company shall not, and shall not permit or any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, with any other securities Person;
(iii) make any acquisition of all or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares substantially all of the capital stock or assets of any other equity interests Person, whether by way of stock purchase, asset purchase, merger or otherwise (other than formation of new wholly-owned Subsidiaries), or of any other assets of any other Person for which the fair market value of the total consideration paid by the Company and its Subsidiaries exceeds $250,000 individually or $500,000 in the aggregate;
(iv) issue, sell, deliver, pledge, dispose of, grant, transfer, lease, license, guarantee or encumber, or authorize the issuance, sale, delivery, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock or voting debt of the Company or any of its Subsidiaries (including, without limitation, other than (A) upon conversion of Preferred Stock outstanding as of the date hereof in accordance with the terms thereof and (B) the issuance of shares or other equity securities exchangeable forby a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company), or securities convertible or exchangeable into or exercisable for any shares of such capital stock or voting debt, or any options, warrants, calls, commitments warrants or other rights of any kind to acquire any shares of such capital stock voting debt or such convertible or exchangeable securities, or stock appreciation rights;
(v) except for dividends in respect of the Preferred Stock required to be paid or accrued in accordance with the Company’s certificate of incorporation and the certificates of designations thereof, declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except dividends paid by any direct or indirect wholly-owned Subsidiary of the Company);
(vi) except for transactions among the Company and its direct or indirect wholly-owned Subsidiaries or among the Company’s direct or indirect wholly-owned Subsidiaries, reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other equity interests of the Company securities convertible or any of its Subsidiaries); exchangeable into or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify exercisable for any shares of its capital stock;
(dvii) subject to Section 6.20, change in any material respect its financial or Tax accounting policies or procedures, except as required by applicable Law or by changes in GAAP;
(viii) other than quarterly dividends not Transaction Litigation (which is addressed in excess Section 6.13), settle, release, waive or compromise any litigation or other pending or threatened proceedings or claims by or before a Governmental Entity or arbitrator if such settlement, release, waiver or compromise (A) with respect to the payment of $0.075 per Common Share declared and paid consistent with past practicesmonetary damages, involves the payment by the Company shall not, and shall not permit or any of its Subsidiaries toof monetary damages exceeding $250,000 in any individual matter, declare, set aside net of any amount covered by insurance or pay any dividends on (whether in cash, stock or other property), or make any other distributions third-party indemnification in respect ofof such matter or (B) with respect to any non-monetary terms and conditions therein, any imposes or requires actions that would or would, individually or in the aggregate, reasonably be expected to materially restrict or limit the operations of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries business of the Company consistent with past practices)and its Subsidiaries as conducted on the date hereof;
(eix) neither except as required by a Benefit Plan in effect prior to the date of this Agreement that is set forth on Section 6.1(a)(ix) of the Company nor any of its Subsidiaries shall Disclosure Schedule, (iA) grant or agree provide any severance or termination payments or benefits to any current or former Company Employee or any other current or former service provider, (B) increase in any manner the compensation or benefits of any current or former directorCompany Employee or any other current or former service provider, officer or employee, except other than customary annual increases for non-executive Company Employees in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements(C) establish, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plansenter into, (ii) enter into any new or materially amend any existing Contractadopt, transactionjoin, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof terminate or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other employee benefit plan or any agreementplan, program, arrangement, plan policy or policy for the benefit of any current or former director, officer or employee agreement that would be a Benefit Plan if it were in existence on the date hereof, (D) hire or otherwise retain the services of any new member of the Company Board, officer or other senior executive, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Contract or Benefit Plan, or (F) except as specifically required by this Agreement, exercise any discretion to accelerate the vesting or payment of any compensation or benefit under any Benefit Plan;
(fx) the Company shall not, and shall not permit any adopt a plan or agreement of its Subsidiaries to, complete or partial liquidation or dissolution;
(xxi) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(gxii) the Company shall notother than (A) any sale, and shall not permit any of its Subsidiaries tolease, (x) incurassignment, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” encumbrances or other agreement to maintain any financial statement condition disposition of another person or enter into any arrangement having inventory in the economic effect ordinary course of any business consistent with past practice and (B) dispositions of assets if the foregoing; or (y) book value thereof does not exceed in the aggregate $500,000, sell, lease, license or subject to any Lien assign, encumber or otherwise dispose of, or agree to sell, lease or subject to any Lien lease, assign, encumber or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(pxiii) fail to maintain its existing insurance coverage of all types;
(xiv) except in the ordinary course of business consistent with past practice, enter into any Material Contract, or amend in any material respect or terminate any Material Contract or waive or grant any release or relinquishment of any material rights under, or renew, any Material Contract; provided, that, except as set forth in Section 6.1(a)(xiv) of the Company shall Disclosure Schedule, entry into, amendment in any material respect, termination of, waiver or granting of any release or relinquishment of any material rights under, or renewal of, any Contract either (i1) use its commercially reasonable efforts todescribed by any of clauses (B), and shall cause (C), (D), (F), (G), (H), (I), (K) or (L) of the definition of “Material Contracts,” or (2) (x) with a term of 18 months or more, (y) that is not terminable by the Company or its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, without fee or penalty upon 90 days’ or less prior notice and (iiz) not, and shall cause that by its Subsidiaries not to, amend terms calls for aggregate payments by or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries thanin excess of $1,500,000, shall require Parent approval in accordance with this Section 6.1(a) even if entered in the terms ordinary course of such business consistent with past practice;
(xv) enter into any Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations with an Affiliate of the Company (other than a wholly-owned Subsidiary of the Company) (an “Affiliate Contract”), or amend in any material respect or, except as contemplated by this Agreement, terminate any Affiliate Contract or waive or grant any release or relinquishment of its Subsidiaries resulting from such amendmentany material rights under, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendmentsrenew, modifications and supplements any Affiliate Contract;
(xvi) spend the amounts in the aggregateSpecified Reserve Account for any purpose other than resolution of the Specified Matter; andor
(qxvii) the Company shall notagree, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
(b) Nothing contained in this Agreement gives, or 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. Prior to the Effective Time, the Company shall exercise, consistent with the terms and subject to the conditions of this Agreement, including this Section 6.1, complete control and supervision over the Company’s and its Subsidiaries’ operations.
Appears in 1 contract
Sources: Merger Agreement (Tropicana Las Vegas Hotel & Casino, Inc.)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the j) The Company covenants and agrees that during that, after the period date hereof and prior to the Closing (unless the Parent shall otherwise approve in writing, which determination by the Parent shall not be unreasonably delayed, or as otherwise provided for by this Agreement) and except as required by applicable Laws, the business of the Company and each of its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, the Company shall use commercially reasonable efforts to preserve the Company’s and each of its Subsidiaries’ respective business organizations intact and maintain their respective existing relations and goodwill with Governmental Entities, clients, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of their respective present employees and agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement to until the Effective Time (or until termination of this Agreement Closing, except as set out in accordance with Article 7 hereof):
(aSection 5.1(a) the business and operations of the Company and Disclosure Letter or as the Parent may approve in writing (any determination as to which by the Parent shall not be unreasonably delayed) or as otherwise provided for by this Agreement or as expressly required by applicable Laws, neither the Company nor any of its Subsidiaries shall be conductedwill:
(1) adopt or propose any change in its Organizational Documents;
(2) merge or consolidate with any other Person, and the books and records of 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; provided, however, that the Company and its Subsidiaries may amalgamate with 1619372 Ontario Inc., in which case references to the “Company” in this Agreement shall thereafter be maintained, only in references to the corporation resulting from such amalgamation;
(3) acquire assets outside of the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, from any other securities Person with a value or purchase price in the aggregate in excess of $250,000 in any securities convertible transaction or exercisable intoseries of related transactions, or any rights, warrants or options other than acquisitions pursuant to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding Contracts in effect as of the date hereof; of this Agreement;
(ii4) repurchaseissue, redeem sell, transfer, or otherwise acquire dispose of or encumber (including through any shares of the capital stock or other equity interests of the Company or pledge) any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests Equity Securities of the Company or any of its Subsidiaries;
(5) create or incur any material Lien on any of its assets, other than in the ordinary course of the business of the Company and its Subsidiaries;
(6) make any loans, advances or capital contributions to or investments in any Person (other than among the Company and its Subsidiaries or in the ordinary course of their business); ;
(7) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its Equity Securities;
(8) 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 other than indebtedness for borrowed money incurred in the ordinary course of the business of the Company and its Subsidiaries consistent with past practices (A) not to exceed $500,000 in the aggregate or (iiiB) guarantees incurred in compliance with this Section 5.1 by the Company of indebtedness of its wholly-owned Subsidiaries;
(9) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement, except for Contracts (including engagement letters) for the provision of investment banking services in the ordinary course of the business;
(10) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(11) amend, modify or terminate any Material Contract, or cancel, modify or waive any term debts or claims or waive any rights having in each case a value in excess of any outstanding security of the Company or any of its Subsidiaries, except $250,000;
(12) (A) as required by this Agreementmake, change or rescind any Tax election, (B) change any annual Tax accounting period, or change any method of Tax accounting or file for any change in Tax accounting method, (C) file any Tax Return, except as set forth is required to be filed by applicable Law, (D) waive or extend the statute of limitations in Section 5.01(brespect of material Taxes, (E) settle any material Tax claim or assessment or surrender any right to claim a material Tax refund or (F) settle or finally resolve any Tax contest with respect to any material amount of Tax;
(13) transfer, sell, lease, or otherwise dispose of any of its assets, or businesses, except for sales, transfers, leases, or other dispositions of assets (i) in the ordinary course of the business of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends with a fair market value not in excess of $0.075 per Common Share declared and paid consistent with past practices250,000 in the aggregate, (iii) pursuant to Contracts in effect prior to the date of this Agreement, or (iv) consisting of the cash distributions referred to in Section 5.1(a)(14) of the Company shall not, and shall not permit any Disclosure Letter;
(14) except as set forth in Section 5.1(a)(14) of its Subsidiaries tothe Company Disclosure Letter, declare, set aside aside, make or pay any dividends on (whether dividend or other distribution, payable in cash, stock stock, property or other property)otherwise, or make any other distributions in with respect of, to any of its capital stock Capital Stock (except for dividends paid by any direct or indirect wholly wholly-owned Subsidiaries Subsidiary to the Company or to any other wholly direct or indirect wholly-owned Subsidiaries Subsidiary of the Company) or enter into any agreement with respect to the voting of its Capital Stock;
(15) except as required pursuant to existing written, binding agreements in effect as of the date of this Agreement and set forth in Section 5.1(a)(15) of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall Disclosure Letter, or as otherwise required by applicable Law, (i) grant or agree provide any severance or termination payments or benefits to any increase of its directors, officers or employees other than pursuant to existing employment agreements in any manner effect as of the date of this Agreement and made available to the Parent or entered into following the date of this Agreement in the ordinary course consistent with the Company’s current form of employment agreement, provided that Parent be consulted prior to the entry into thereof, (ii) change the methodology for determining compensation and bonus payments to directors, officers or benefits of any current or former director, officer or employee, except increases employees other than in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of increase the Company Disclosure Schedulepension, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (includingwelfare, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan severance or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests benefits of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant new equity awards to commitments prior to the date hereof directors, officers or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures employees other than in the ordinary course of business consistent with past practices practice, (iv) establish, adopt, amend or terminate any of its benefit plans or amend the terms of any outstanding equity awards, (v) 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 of its benefit plans, to the extent not already provided in any such benefit plans, (vi) change any actuarial or other material assumptions used to calculate funding obligations with respect to 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, except as may be required by GAAP or (vii) forgive any loans to any of its directors, officers or employees;
(16) exercise any Broker Warrants other than in the ordinary course of business and following consultation with the Parent; provided, however, that with respect to all Broker Warrants granted by each issuer thereof to the Company or its Subsidiaries, (i) up to one-third of such Broker Warrants may be exercised at any time; (ii) up to one-third of such Broker Warrants may be exercised only after reasonable consultation with Parent; and (iii) up to one-third of such Broker Warrants may be exercised only with the Parent’s consent; provided further that (x) the portions of the Broker Warrants subject to clauses (ii) and (iii) may be freely exercised by the Company without consultation or the consent of the Parent to the extent that the Broker Warrant would expire on or before January 31, 2008 and (y) any portions of a Broker Warrant that are exercised prior to the date of this Agreement shall be taken into account when determining whether the limitation set forth in clause (i) has been met;
(17) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $250,000 individually or $500,000 in the aggregate;
(k18) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, take any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or would result in any of the conditions to the Arrangement set forth in Article 6 VII not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;; or
(o19) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 1 contract
Sources: Arrangement Agreement (Thomas Weisel Partners Group, Inc.)
Interim Operations. Except (a) L3 and ▇▇▇▇▇▇ each covenant and agree as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless L3 or ▇▇▇▇▇▇, as applicable, shall otherwise approve in writing (which approval shall not be unreasonably withheld, conditioned or delayed)), and except as otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Law or as set forth in Section 5.01 8.1(a) of the Company such Party’s Disclosure Schedule or as consented to in writing by ParentLetter, the Company covenants and agrees that during the period from the date business of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company it and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only conducted in all material respects in the ordinary course of business and Ordinary Course and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially respective reasonable best efforts to preserve their business organizations intact their current business organizationsand maintain existing relations and goodwill with Governmental Entities, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisersdistributors, distributors creditors, lessors, Employees and business associates and keep available the services of its and its Subsidiaries’ present officers, Employees and agents, except as otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Law. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the Effective Time, except as otherwise (i) expressly contemplated by this Agreement, (ii) required by a Governmental Entity or applicable Law or the terms of any Material Contract or Benefit Plan existing as of the date of this Agreement, (iii) as approved in writing by the other material third parties having business dealings with them Party (which approval shall not be unreasonably withheld, conditioned or delayed) or (iv) set forth in Section 8.1(a) of such Party’s Disclosure Letter, each Party, on its own account, shall not and shall cause its Subsidiaries not to:
(i) make or propose any change to preserve such Party’s Organizational Documents or, except for amendments that would not materially restrict the goodwill operations of their respective such Party’s businesses, the Organizational Documents of any of such Party’s Subsidiaries;
(bii) other than in the Company shall notOrdinary Course, and shall not permit except for any such transactions among its wholly owned Subsidiaries, (A) merge or consolidate itself or any of its Subsidiaries towith any other Person, or (iB) 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 $200 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 L3 or ▇▇▇▇▇▇, as applicable, to consummate the Transactions, in each case, other than acquisitions of inventory or other goods in the Ordinary Course;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize for the issuance, issuesale, deliverpledge, sell disposition, grant, transfer, lease, license, guarantee or agree or commit to issueEncumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or the capital stock of any of its Subsidiaries (other than the issuance of shares (A) by its wholly owned Subsidiary to it or another of its wholly owned Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances B) in respect of Common Shares upon the exercise of Options equity-based awards outstanding as of the date hereof; of this Agreement, or (iiC) repurchasegranted in accordance with Section 8.1(a)(xviii), redeem the ESPP or otherwise acquire each Party’s 401(k) Plans, 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 the such capital stock stock, or any options, warrants or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, acquire any shares of such capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance (other equity interests 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 Company Ordinary Course 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 (iii) amend, modify other than to or waive any term of any outstanding security of the Company or from L3 and any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options wholly owned Subsidiaries or to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options from ▇▇▇▇▇▇ and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through mergerwholly owned Subsidiaries, liquidationas applicable, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (iiaccordance with Section 8.1(a)(xviii)) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, 50 million in the Company shall not, and shall not permit any of its Subsidiaries to, aggregate;
(vii) declare, set aside aside, make or pay any dividends on (whether dividend or other distribution, payable in cash, stock stock, property or other property)otherwise, or make any other distributions in with respect of, to any of its capital stock (except for dividends paid by any direct or indirect wholly owned Subsidiaries Subsidiary to it or to any other direct or indirect wholly owned Subsidiary); provided, that (A)(1) ▇▇▇▇▇▇ may make, declare and pay one regular quarterly cash dividend in each quarter of the year ending June 28, 2019 in an amount per share of $0.685 per quarter with a record date consistent with the record date for each quarterly period of the year ended June 29, 2018 and (2) from and after July 1, 2019, ▇▇▇▇▇▇ may make, declare and pay one regular quarterly cash dividend in each quarter of the year ending June 30, 2020 in an amount per share up to $0.055 higher than the dividend paid for the same quarterly period of the year ended June 28, 2019 and with a record date consistent with the record date for each quarterly period of the year ended June 28, 2019, if, in the case of clauses (1) and (2), ▇▇▇▇▇▇ provides L3 with written notice of each record date it will select at least twenty (20) Business Days prior to the Company declaration date in respect of such applicable record date and (B)(1) L3 may make, declare and pay one regular quarterly cash dividend in each quarter of the year ending December 31, 2018 in an amount per share of $0.80 per quarter and with a record date consistent with the record date for each quarterly period of the year ended December 31, 2017 and (2) from and after January 1, 2019, L3 may make, declare and pay one regular quarterly cash dividend in each quarter of the year ending December 31, 2019 in an amount per share up to $0.05 higher than the dividend paid for the same quarterly period of the year ended December 31, 2018 and with a record date consistent with the record date for each quarterly period of the year ended December 31, 2018, if, in the case of clauses (1) and (2), L3 provides ▇▇▇▇▇▇ 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, in each case, solely to the extent such payment is coordinated pursuant to, and permitted by, Section 8.17;
(viii) reclassify, split, combine, subdivide or redeem, purchase (through such Party’s share repurchase program or otherwise) 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, other than with respect to (A) the capital stock or other equity interests of a wholly owned Subsidiaries Subsidiary of L3 or ▇▇▇▇▇▇, as applicable; (B) net withholding upon the exercise or settlement of equity-based awards outstanding as of the Company date of this Agreement or granted in accordance with Section 8.1(a)(xviii) in the Ordinary Course and in accordance with their terms and, as applicable, the plan documents as in effect on the date of this Agreement; or (C) such Party’s matching contributions to its 401(k) Plans in the form of capital stock in the Ordinary Course and in accordance with the terms of the plan documents as in effect on the date of this Agreement;
(ix) except to the extent expressly provided by, and consistent with, Section 8.1(a)(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) to the extent reasonably necessary to avoid a material business interruption as a result of any act of God, war, terrorism, earthquake, fire, hurricane, storm, flood, civil disturbance, explosion, partial or entire failure of utilities or IT Assets, or any other similar cause not reasonably within the control of such Party or its Subsidiaries, (B) not in excess of $50 million in the aggregate during any consecutive twelve (12) month period (other than capital expenditures within the thresholds set forth in Section 8.1(a)(ix) of such Party’s Disclosure Letter), or (C) expenditures that such Party reasonably determines are necessary to maintain the safety and integrity of any asset or property in response to any unanticipated and subsequently discovered events, occurrences or developments (provided that L3 or ▇▇▇▇▇▇, as applicable, will use its reasonable best efforts to consult with past practicesthe other Party prior to making or agreeing to any such capital expenditure);
(ex) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases other than in the ordinary course of business consistent with past practiceOrdinary Course, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new Contract that would have been a Material Contract had it been entered into prior to this Agreement or materially amend amend, modify, supplement, waive, terminate, assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any existing Material Contract other than (A) expirations of any such Contract in the Ordinary Course in accordance with the terms of such Contract, transactionor (B) non-exclusive licenses, commitment covenants not to ▇▇▇, releases, waivers or arrangement with any current other rights under Intellectual Property owned by L3 and its Subsidiaries or former director, officer, employee or affiliate of the Company ▇▇▇▇▇▇ or any of its Subsidiaries, or (iii) except as set forth applicable, in Section 5.01(e) of each case, granted in the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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 hereofOrdinary Course;
(fxi) other than in the Company shall notOrdinary Course or with respect to amounts that are not material to such Party and its Subsidiaries, and shall not permit taken as a whole, cancel, modify or waive any debts or claims held by it or any of its Subsidiaries to, (x) enter into or waive any new line of business, or acquire or agree to acquire, including, without limitation, rights held by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company it or any of its Subsidiaries;
(xii) settle or compromise, guarantee or offer or propose to settle or compromise any debt securities material Proceeding, including before a Governmental Entity, except in accordance with the parameters set forth in Section 8.1(a)(xii) of otherssuch Party’s 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 any material restrictions on the business operations of such Party and its Subsidiaries or Affiliates;
(xiii) make any changes with respect to its material accounting policies or procedures, except as required by changes to GAAP;
(xiv) other than in the Ordinary Course, make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, file any Tax Return other than on a basis consistent with past practice, enter into any “keep well” or other material closing agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file settle any amended Tax Return, enter into any closing agreement, settle or compromise any material Tax claim, audit, assessment or liability relating to the Company or any of its Subsidiariesdispute, or surrender any right to claim a refund of a material amount of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent or agree to any an extension or waiver of the limitation period applicable to any Tax claim or assessment relating statute of limitations with respect to the Company assessment or determination of any material Tax;
(xv) 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 material to it and its Subsidiaries, taken as a whole, including capital stock of any of its Subsidiaries, except in connection with (A) sales of goods or services provided in the Ordinary Course, (B) sales of obsolete assets, and (C) sales, leases, licenses or other dispositions of assets (not including services) with a fair market value not in excess of $100 million in the aggregate other than pursuant to Material Contracts or Party Government Contracts in effect prior to the date of this Agreement, or entered into after the date of this Agreement in accordance with this Agreement;
(xvi) cancel, abandon or otherwise allow to lapse or expire any Intellectual Property that is material to the businesses of L3 and its Subsidiaries or ▇▇▇▇▇▇ and its Subsidiaries, as applicable, taken as a whole, as each are currently conducted;
(xvii) amend or fail to comply with L3’s and its Subsidiaries’ or ▇▇▇▇▇▇’ and its Subsidiaries’ or, as applicable, privacy and security policies, or alter the operation or security of any IT Assets owned, used or held for use in the operation of L3’s and its Subsidiaries’ or ▇▇▇▇▇▇’ and its Subsidiaries’ businesses, as applicable, in each case, in a manner that would be materially less protective of any confidential or proprietary information that is owned by or in the possession or control of L3 or any of its Subsidiaries or ▇▇▇▇▇▇ or any of its Subsidiaries, as applicable, including any information stored on or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if processed by such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its SubsidiariesIT Assets;
(pxviii) increase or change the Company compensation or benefits payable to any Employee other than in the Ordinary Course, provided that, notwithstanding the foregoing, except as expressly disclosed in Section 8.1(a)(xviii) of such Party’s Disclosure Letter or pursuant to a L3 Benefit Plan or ▇▇▇▇▇▇ Benefit Plan, as applicable, in effect as of the date of this Agreement, the Parties shall not: (iA) use its commercially reasonable efforts togrant any new long-term incentive or equity-based awards, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, or amend or modify the terms of any Contract such outstanding awards under any L3 Benefit Plan or ▇▇▇▇▇▇ Benefit Plan, as applicable; (B) grant any transaction or retention bonuses; (C) increase or change the compensation or benefits payable to any executive officer (other than changes in benefits that are generally applicable to all salaried Employees in the particular geographic region and that are made in the Ordinary Course); (D) increase or change the severance terms applicable to any Employee, except that both Parties may pay severance benefits in amounts that would not exceed the levels that would be payable under ▇▇▇▇▇▇’ ▇▇▇▇▇▇▇▇▇ Pay Plan; or (E) 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);
(xix) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with any Significant Customera labor union, works council or similar organization, in each case, other than on terms substantially equivalent toin the Ordinary Course;
(xx) incur any Indebtedness (including the issuance of any debt securities, warrants or more beneficial on balance other rights to acquire any debt security) or guarantee any such Indebtedness, except for (A) Indebtedness for borrowed money incurred in the Company Ordinary Course under L3’s or ▇▇▇▇▇▇’, as applicable, revolving credit facilities and other lines of credit existing as of the date of this Agreement, (B) guarantees by L3 or any wholly owned Subsidiary of its Subsidiaries thanL3 of Indebtedness of L3 or any other wholly owned Subsidiary of L3, (C) guarantees by ▇▇▇▇▇▇ or any wholly owned Subsidiary of ▇▇▇▇▇▇ of Indebtedness of ▇▇▇▇▇▇ or any other wholly owned Subsidiary of ▇▇▇▇▇▇, (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 such Contract prior to credit, performance bonds or other similar arrangements in the making of such amendment Ordinary Course, (F) interest, exchange rate and commodity swaps, options, futures, forward contracts and similar derivatives or modification, other hedging Contracts (1) not entered for speculative purposes and (iii2) not, entered into in the Ordinary Course and shall cause in compliance with its Subsidiaries not to, enter into, risk management and hedging policies or materially amend, modify practices in effect on the date of this Agreement or supplement, any Lease or other Material Contract under which the costs or obligations (G) Indebtedness incurred by mutual agreement of the Company Parties in accordance with Section 8.8; or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(qxxi) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
(b) Nothing contained in this Agreement shall give L3 or ▇▇▇▇▇▇, 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 exerc
Appears in 1 contract
Sources: Agreement and Plan of Merger (L3 Technologies, Inc.)
Interim Operations. Except (a) The Company shall, and shall cause each of its Subsidiaries to, from and after the execution and delivery of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing (such approval not to be unreasonably conditioned, withheld or delayed)), and except as otherwise contemplated by this Agreement or as set forth is required by a Governmental Entity or applicable Law, comply in Section 5.01 all material respects with all applicable Laws and the requirements of all Material Contracts, conduct its business in all material respects in the Company Disclosure Schedule or as consented to Ordinary Course of Business and, in writing by Parentconnection therewith, the Company covenants shall use and agrees that during the period from the date cause each of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall to use their respective commercially reasonable best efforts to preserve intact their current its and its Subsidiaries’ business organizationsorganizations substantially intact, maintain its and its Subsidiaries’ existing relations and goodwill with Governmental Entities, customers, consultants, licensors, licensees, creditors, lessors, employees and business associates having significant business dealings with them, keep available the services of their current officers its and its Subsidiaries’ key present employees and agents, preserve their relationships and maintain the assets utilized in connection with their the business of the Company and its Subsidiaries, maintain in effect all Governmental Authorizations and keep in full force and effect all material customersInsurance Policies maintained by the Company and its Subsidiaries; provided, suppliershowever, licensorsthat no action taken or failed to be taken by the Company or any of its Subsidiaries with respect to the matters specifically addressed by clauses (i) through (xxix) of this Section 7.1(a) shall be deemed a breach of this Section 7.1(a) unless such action would constitute a breach of such clauses (i) through (xxix). Without limiting the generality of and in furtherance of the foregoing sentence, licenseesfrom the execution and delivery of this Agreement until the Effective Time, advertisersexcept as otherwise contemplated by this Agreement, distributors and other material third parties having business dealings with them and required by a Governmental Entity or applicable Law, approved in writing by Parent (such approval not to preserve be unreasonably conditioned, withheld or delayed) or set forth in Section 7.1(a) of the goodwill of their respective businesses;
(b) Company Disclosure Letter, the Company shall not, not and shall not permit any of its Subsidiaries to, :
(i) authorize adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for issuanceany 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 assets, operations or businesses or file a petition in bankruptcy under any provisions of federal or state bankruptcy Law on behalf of the Company or any of its Subsidiaries (or consent to any such filing);
(iii) acquire any Person or any assets constituting a business unit or division, whether directly or indirectly and by any manner, from any other Person, or otherwise make any capital expenditure or expenditures (other than capital expenditures contemplated by the most recent annual budget of the Company and its Subsidiaries, a copy of which has been made available as of the date hereof), in each case with a fair market value (reasonably determined by the Company) or purchase price in excess of $7.5 million in any individual transaction or series of related transactions or $15 million in the aggregate, and except as covered by the foregoing acquire any other assets outside the Ordinary Course of Business;
(iv) issue, deliversell, sell pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or agree otherwise enter into any Contract or commit understanding with respect to issuethe voting of, sell any shares of capital stock, Company RSUs or deliver other equity interests of the Company (whether through including, for the avoidance of doubt, Shares) or of any of its Subsidiaries (other than (A) the Voting Agreement or (B) the issuance of such shares of capital stock (1) by a Wholly Owned Subsidiary of the Company to the Company or granting another Wholly Owned Subsidiary of the Company, (2) in respect of Company RSUs outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the terms of the Stock Plans in effect on the date of this Agreement or (3) in respect of Company RSUs granted in August 2018 on terms and conditions as set forth on Section 7.1(a)(iv)) of the Company Disclosure Letter, securities convertible or exchangeable into or exercisable for any such shares of capital stock, or any options, commitmentswarrants or other rights of any kind to acquire any such shares of capital stock or such convertible or exchangeable securities;
(v) create or incur any Encumbrance (other than Permitted Encumbrances) material to the Company and its Subsidiaries (taken as a whole) on any of the assets of the Company or any of its Subsidiaries;
(vi) make any loans, subscriptionsadvances, rights guarantees or capital contributions to, or investments in, any Person, except (i) to or from the Company and any of its Wholly Owned Subsidiaries and (ii) for loans or advances made to directors, officers and other employees of the Company and its Subsidiaries for purposes other than business-related travel and other business-related expenses in excess of $2 million in the aggregate, in each case, in the Ordinary Course of Business; and provided that in no event shall the payment terms of any Contract involving a customer of the Company or its Subsidiaries constitute a loan or advance for purposes of this Section 7.1(a)(vi);
(vii) 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 (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;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwiseotherwise acquire (or offer to do any of the foregoing), pledge directly or otherwise encumber indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (including with respect to the Company, for the avoidance of doubt, Shares) or otherwise change the capital structure of the Company or any of its Subsidiaries, other than withholding Tax obligations upon the exercise, vesting or settlement of Company RSUs 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;
(ix) incur or assume any Indebtedness for borrowed money or otherwise, guarantee any Indebtedness or enter into a “keep well” or similar agreement (including the issuance of any debt securities, warrants or other rights to acquire any debt security), except for (A) Indebtedness for borrowed money incurred in the Ordinary Course of Business not to exceed $7.5 million individually or $15 million in the aggregate or expressly permitted by Section 7.1(a)(v) or to fund expenditures expressly permitted by Section 7.1(a)(iii), or (B) Indebtedness of up to $1 million incurred under the Company’s current revolving credit facility or (C) 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; provided, that any Indebtedness that is extinguished in full prior to the Closing (for the avoidance of doubt, not including the Credit Agreement Payoff Amount) shall not be deemed to be a breach of this provision;
(x) enter into any Contract that would have been a Company Material Contract had it been entered into prior to this Agreement, other than Contracts with customers or suppliers entered into in the 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 Section 7.1(a), including any amendment, modification or supplement to an existing Contract, which are governed by Section 7.1(a)(xi);
(xi) other than with respect to Company Material Contracts related to Indebtedness, which shall be governed by Section 7.1(a)(ix) and Section 7.12, terminate or materially amend, modify, supplement or waive in a manner that is materially adverse to the Company and its Subsidiaries (taken as a whole), any Company Material Contract, other than expirations of any such Contract in the Ordinary Course of Business or in accordance with the terms of such Contract, except for any ministerial actions, releases or waivers, in each case, granted in the Ordinary Course of Business;
(xii) other than with respect to Transaction Litigation, which shall be governed by Section 7.15, pay, discharge, satisfy, settle or compromise any Proceeding (or agree to do any of the foregoing) for an amount in excess of $5 million individually or $10 million in the aggregate other than any payments in accordance with the terms of any liabilities, claims or obligations reflected or reserved against in the most recent consolidated financial statements of the Company included in the Company Reports; provided, that any such payment, discharge, satisfaction, settlement or compromise of any such Proceeding does not include any material obligation (other than the payment of money or confidentiality obligations) to be performed by the Company or any of its Subsidiaries;
(xiii) make any material changes with respect to accounting policies or procedures, except as required by changes in Law or GAAP;
(xiv) make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, surrender any right to claim a refund of a material amount of Taxes, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material Taxes or settle any material Tax claim;
(xv) transfer, sell, lease, sublease, license, pledge, mortgage, assign, divest, cancel or otherwise dispose of, or permit or suffer to exist the creation of any Encumbrance (other than Permitted Encumbrances) upon, including pursuant to a sale-leaseback transaction or an asset securitization transaction, any tangible properties or tangible assets (not including any Intellectual Property Rights), including capital stock of any of its Subsidiaries, except in connection with services provided in the Ordinary Course of Business;
(xvi) sell, transfer, cancel, abandon, allow to lapse or otherwise dispose of any other securities Company Owned Intellectual Property Rights that are material to the respective businesses of the Company and its Subsidiaries as currently conducted, except (A) in the Ordinary Course of Business, (B) lapse of Intellectual Property Rights that have reached their natural expiration time and can no longer be extended or renewed, or (C) transfers of Intellectual Property Rights developed after the date of this Agreement by the Company or any securities convertible of its Subsidiaries (that are not material for the Company or exercisable intosuch Subsidiary to retain) as part of their respective businesses on behalf of any customer;
(xvii) except as required pursuant to a Company Benefit Plan or as otherwise required by applicable Law (A) grant, increase or provide any severance, retention, change in control or termination payments or benefits to any director, officer, employee or independent contractors of the Company or any rightsof its Subsidiaries, warrants (B) increase the compensation or options to acquirebenefits of, pay any bonus to, or, except as permitted under Section 7.1(a)(iv), make any new equity or equity-based awards to, any such sharesdirector, securities officer, employee or convertible securities independent contractor of the Company or any of its Subsidiaries, other securities than annual salary or equity equivalents base pay increases for employees below the level of Director in the Ordinary Course of Business, of not more than three percent (including, without limitation, stock appreciation rights 3%) of such salary or phantom interestsbase pay (and corresponding increases in bonus or incentive payments to the extent determined by reference to salary or base pay), except for issuances of Common Shares upon the exercise of Options outstanding (C) establish, adopt, amend or terminate any Company Benefit Plan or any arrangement that would be a Company Benefit Plan if in effect as of the date hereof; hereof or amend the terms of any outstanding equity or equity-based awards, except in the Ordinary Course of Business, consistent with past practice and as would not increase benefits or costs with respect to such Company Benefit Plans or arrangements by more than a de minimis amount, (iiD) repurchasetake any action to accelerate the vesting or payment, redeem or otherwise acquire fund or in any shares other way secure the payment, of compensation or benefits under any Company Benefit Plan, to the extent not already provided in any such Company Benefit Plan, (E) materially 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, except as may be required by GAAP, (F) forgive any loans to directors, officers or employees of the capital stock Company or any of its Subsidiaries or (G) pay or vest any performance based amount or award in excess of the level earned based on actual performance;
(xviii) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other equity interests agreement with a labor union, labor organization, works council or similar organization;
(xix) form any Subsidiary of the Company or any of its Subsidiaries;
(xx) take any action to exempt any Person from, or make any acquisition of securities of the Company by any Person not subject to, any state takeover statute or similar statute or regulation that applies to the company with respect to an Acquisition Proposal or otherwise, except for Parent, Merger Sub or any of their respective Subsidiaries or Affiliates, and except for the transactions contemplated by this Agreement;
(xxi) amend the term of any security of the Company or any of its Subsidiaries (including, without limitationfor the avoidance of doubt, securities exchangeable forthe Shares), in each case, whether by merger, consolidation or otherwise;
(xxii) enter into a new line of business or abandon or discontinue any existing line of business;
(xxiii) enter into any material transaction or Contract with any Person that would be required to be reported by the Company pursuant to Item 404 of Regulation S-K under the Securities Act;
(xxiv) except in the Ordinary Course of Business, enter into or extend the term or scope of any Contract that purports to restrict or limit the Company or any existing or future Subsidiary or Affiliate of the Company from engaging in any line of business or in any geographic area;
(xxv) amend or modify the engagement letter in effect as of the date of this Agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. LLC;
(xxvi) take any action to increase the vote required for the Requisite Company Vote;
(xxvii) receive, collect, compile, use, store, process, share, safeguard, secure (technical, physical and administrative), dispose of, destroy, disclose, or optionstransfer (including cross-border) Personal Information (or fail to do any of the foregoing, warrants, calls, commitments or rights as applicable) in violation of any kind to acquire(i) applicable Privacy Laws, capital stock (ii) privacy policies or other equity interests notices of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required Company’s or its Subsidiaries’ contractual obligations with respect to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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 hereofPersonal Information;
(fxxviii) the Company shall not, and shall not permit take any of its Subsidiaries to, (x) enter into any new line of business, action or acquire or agree fail to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, take any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or expected to result in any of the conditions to the Merger set forth in Article 6 ARTICLE VIII not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;; or
(oxxix) the Company shall notagree, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
(b) Parent and the Company shall not knowingly take or permit any of their respective Subsidiaries to take any action that would, individually or in the aggregate, reasonably be expected to prevent, materially delay or materially impair the consummation of the transactions contemplated by this Agreement.
(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 the Parent’s or its Subsidiaries’ operations prior
Appears in 1 contract
Sources: Merger Agreement (Syntel Inc)
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing in advance (which approval shall not be unreasonably withheld, delayed or conditioned)), and except as otherwise expressly contemplated by this Agreement or as set forth required by a Governmental Entity or applicable Law, its business and the business of its Subsidiaries shall be conducted in all material respects in the Ordinary Course and, to the extent consistent therewith, it and its Subsidiaries shall (i) preserve their business organizations in good standing pursuant to applicable Law and (ii) use their respective commercially reasonable efforts to maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of 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 5.01 7.1(b) below shall be deemed a breach of the Company Disclosure Schedule or as consented to obligations under this sentence unless such action would constitute a breach of such other provision.
(b) Without limiting the generality of, and in writing by Parentfurtherance of, the Company covenants and agrees that during the period foregoing, from the date of this Agreement to until the Effective Time Time, except as otherwise expressly (A) contemplated by this Agreement, (B) required by a Governmental Entity or until termination of this Agreement applicable Law, (C) approved in accordance with Article 7 hereof):
writing in advance (awhich approval shall not be unreasonably withheld, delayed or conditioned) the business and operations by Parent or (D) set forth in Section 7.1(b) of the Company Disclosure Letter, the Company shall not and shall not permit its Subsidiaries shall be conducted, and to:
(i) adopt or propose any change in (x) the books and records Company’s Organizational Documents or (y) any Subsidiary’s Organizational Documents;
(ii) merge or consolidate itself or any of the Company and its Subsidiaries shall be maintainedwith any other Person, only in the ordinary course of business and the Company and except for any such transactions among its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizationswholly owned Subsidiaries, keep available the services of their current officers and employees and preserve their relationships with their or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material customerschanges or restrictions on its assets, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective operations or businesses;
(biii) (A) acquire (1) (by merger, consolidation or acquisition of stock or assets) any other Person or (2) to the Company shall notextent in excess of $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 shall not permit any of its Subsidiaries to, (i) authorize except for issuanceissuances under the ESPP authorized under Section 3.5(c), issue, deliversell, sell pledge, dispose of, grant, transfer, encumber, or agree authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or commit to issueEncumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber enter into or amend any Contract or understanding with respect to the voting 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 dividends paid by any direct or indirect wholly owned Subsidiary to it or to any other direct or indirect wholly owned Subsidiary) or 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 offer to redeem, repurchase 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, 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 (A) expirations of any such Contract in the Ordinary Course in accordance with the terms of such Contract, or (B) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other 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) file any amended Tax Return, (D) enter into any closing agreement with respect to any 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, (G) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment, (H) enter into any Tax sharing or similar agreement or arrangement, (I) fail to pay any material Tax that becomes due and payable or (J) incur any Taxes outside of the 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, (B) sales, leases or other dispositions of assets (not including services) with a Fair Value not in excess of $5,000,000 in the aggregate other than pursuant to Material Contracts in effect prior to the date of this Agreement and (C) non-exclusive licenses entered into in the Ordinary Course and (D) 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 Company Employee or other service provider, except for annual merit-based increases in base salary or base wages in the Ordinary Course for Company Employees or other 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%)), (C) 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, or fund or in any other securities way secure the payment, of compensation or benefits under any securities convertible or exercisable intoCompany Benefit Plan other than vesting acceleration of all Company Options and Company RSUs in the Merger as contemplated by Section 3.5(b), (E) grant any new awards, or amend or modify the terms of any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents outstanding awards (including, without limitation, stock appreciation rights or phantom interestsany 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, except as may be required by GAAP, (G) forgive any loans, issue any loans or advance any loans to any current or former Company Employees, (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 issuances cause;
(xviii) recognize any union, works council or other labor organization as the representative of Common Shares upon the exercise of Options outstanding as any of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests employees of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)modify, or (ii) waive, release, grant, assign, modify or transfer terminate any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, exceptLabor Agreement, in each case, except as required by applicable Law;
(mxix) implement or announce any employee layoffs or location closings, that would implicate the Company shall not, and shall not permit WARN Act;
(xx) enter into any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of Contract which contains a change in applicable Law control or similar provision that would be triggered in GAAPconnection with this Agreement or the Merger;
(nxxi) other than in the Company shall notOrdinary Course, and shall not permit any of its Subsidiaries to, take, amend or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate modify in any material respect atrespect, or as extent, renew or terminate any lease, sublease, license or other agreement for the use or occupancy of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfiedreal property, or omitenter into any new lease, sublease, license or agree to omit, to take other agreement for the use or occupancy of any action necessary to prevent any such representation real property;
(xxii) maintain insurance at less than current levels or warranty from being inaccurate otherwise in a manner inconsistent with past practice in any material respect at any such time or to prevent any such condition from not being satisfiedrespects;
(oxxiii) the Company shall notengage in any transaction with, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle arrangement or compromise understanding with, any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit Affiliate of the Company or any other Person covered by Item 404 of its Subsidiaries;Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; or
(pxxiv) the Company shall (i) use its commercially reasonable efforts toagree, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Majesco)
Interim Operations. Except The Company shall not knowingly take or permit any of its Subsidiaries to take any action or refrain from taking any action the result of which would be reasonably and foreseeably likely to prevent the consummation of the Merger by the Termination Date, except as expressly and specifically permitted by Section 6.2. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time, unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld or delayed), and except as otherwise expressly contemplated by this Agreement or as set forth required by applicable Laws, the business of it and its Subsidiaries shall be conducted in Section 5.01 the ordinary 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, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of the present employees and agents of the Company Disclosure Schedule or as consented to and its Subsidiaries. Without limiting the generality of the foregoing and in writing by Parentfurtherance thereof, the Company covenants and agrees that during the period from the date of this Agreement to until the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its SubsidiariesTime, except (A) as otherwise expressly required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 5.01(b6.1(i) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practicesLetter, the Company shall not, will not and shall will not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.:
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule or as consented to in writing by Parent, the Company covenants and agrees that during the period from From the date of this Agreement to until the earlier of the Effective Time (or until and termination of this Agreement in accordance with Article 7 hereof):
its terms, the Company covenants and agrees as to itself and each of its Subsidiaries that it will use its commercially reasonable efforts, from the date of this Agreement until the Effective Time, unless Parent shall otherwise approve in writing, 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 use their respective commercially reasonable efforts to (a) preserve their business organizations, assets and lines of business intact, (b) maintain in effect all of their foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations that are material to the business Company and operations of 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 Company and its Subsidiaries shall be conducted, and the books and records of the Company and necessary to conduct its Subsidiaries shall be maintained, only business in the ordinary course of business consistent with past practice (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 (d) maintain in all material respects its and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizationsexisting relations and goodwill with Governmental Entities, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors employees and other material third parties having business dealings with them and to preserve agents. Without limiting the goodwill of their respective businesses;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as generality of the foregoing and in furtherance thereof, from the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of this Agreement until the earlier of the capital stock or other equity interests Effective Time and the termination of the Company or any of this Agreement in accordance with its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiariesterms, except (A) as otherwise expressly required by this Agreement, (B) as Parent may consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), (C) as required by applicable Laws or definitive interpretations thereof or by any Governmental Entity, or (D) as set forth in Section 5.01(b) 4.1 of the Company Disclosure ScheduleLetter, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall will not, and will not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of permit any of its Subsidiaries, to:
(i) adopt any amendments to its charter or bylaws or, in the case of any Subsidiary that is not a corporation, similar applicable organizational documents;
(ii) amend (A) adopt a plan of complete or otherwise change its certificate of incorporation partial liquidation, dissolution, merger, consolidation, business combination, restructuring, recapitalization or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or other reorganization (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other propertythis Agreement), 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(eB) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or by purchasing an equity interest in or portion of the assets or capital stock or of (other equity interests ofthan as set forth in Section 4.1(iii)), or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof thereof, (C) take or omit to take any action that would cause any rights under Material Intellectual Property, including with respect to any registrations or applications for registration, to lapse, be abandoned or cancelled, or fall into the public domain, other than actions or omissions in the ordinary course of business consistent with past practice and not otherwise in violation of this Section 4.1, or (D) enter into a joint venture or partnership or similar third-party business enterprise;
(iii) acquire any assets or capital stock from any other Person, other than acquisitions or purchases made of assets in the ordinary course of business consistent with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionspast practice;
(giv) the Company shall notissue, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sellpledge, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, grant, transfer, encumber, or agree to sellauthorize the issuance, lease sale, pledge, disposition, grant, transfer or subject to any Lien or otherwise dispose encumbrance of, any shares of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization capital stock of the Company or any of its Subsidiaries (other than (A) the issuance of Shares upon the exercise of Company Options and the settlement of RSU Awards and PSU Awards (and dividend equivalents thereon, if applicable) outstanding on the date of this Agreement or (B) the issuance of shares of capital stock by a wholly owned Subsidiary of the Company to the Company or another wholly owned 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 transaction specifically contemplated by 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 acquire any shares of such capital stock or such convertible, exchangeable or exercisable securities;
(iv) except as set forth other than trade credit or otherwise in Section 5.01(i) of an amount not to exceed $5,000,000 in the Company Disclosure Scheduleaggregate, the Company shall notin each case, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside in the ordinary course of business consistent business, make any loans, advances or capital contributions to or investments in any Person;
(vi) (A) declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or other property, with past practice under which respect to its capital stock, except for dividends by any wholly owned direct or indirect Subsidiary of the Company to the Company or any other wholly owned direct or indirect Subsidiary of the Company, (B) 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 of, in lieu of or in substitution therefor, (C) 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, RSU Awards or PSU Awards outstanding on the date of this Agreement, (2) the payment of the exercise price of Company Options outstanding on the date of this Agreement with Shares (including in connection with “net exercises”) and (3) forfeitures of Company Options, RSU Awards or PSU Awards 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 have monetary obligations 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;
(vii) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for any Indebtedness or otherwise modify the terms of any Indebtedness, other than Indebtedness incurred under existing revolving credit facilities of the Company for working capital purposes in the ordinary course of business in an amount not to exceed $150,000,000 in the aggregate (provided that Parent’s prior written consent shall be required in respect of any incremental incurrence of Indebtedness thereunder in excess of $25,000 5,000,000). “Indebtedness” of any Person means (except as may 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) net cash payment obligations of such Person under swaps, options, derivatives and other hedging agreements or arrangements that will be necessary for payable upon termination thereof (assuming they were terminated on the Company to comply with its obligations hereunderdate of determination), and (G) reimbursement obligations under (i) letters of credit, bank guarantees and other similar contractual obligations entered into by or on behalf of such Person or (ii) waivesurety, releasecustoms, grant, assign, modify reclamation or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (performance bonds other than pursuant to commitments prior to the date hereof or other planned capital expenditures those entered into in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoingpractice.
Appears in 1 contract
Interim Operations. Except (a) The Company covenants and agrees as to itself and its Subsidiaries that, after July 20, 2020 and prior to the Effective Time (unless Parent shall otherwise approve in writing in advance (which approval shall not be unreasonably withheld, delayed or conditioned)), and except as otherwise expressly contemplated by this Agreement or as set forth required by a Governmental Entity or applicable Law, its business and the business of its Subsidiaries shall be conducted in Section 5.01 of all material respects in the Company Disclosure Schedule or as consented to in writing by ParentOrdinary Course and, the Company covenants and agrees that during the period from the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations of the Company extent consistent therewith, it and its Subsidiaries shall be conducted, (i) preserve their business organizations in good standing pursuant to applicable Law and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall (ii) use their respective commercially reasonable best efforts to preserve intact their current maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business organizations, associates and keep available the services of their current officers its and its Subsidiaries’ respective present officers, employees and preserve their relationships 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 their 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, from July 20, 2020 until the Effective Time, except as otherwise expressly (A) contemplated by this Agreement, (B) required by a Governmental Entity or applicable Law, (C) approved in writing in advance (which approval shall not be unreasonably withheld, delayed or conditioned) by Parent or (D) set forth in Section 7.1(b) of the Company Disclosure Letter, the Company has not and shall not and has not and shall not permit its Subsidiaries to:
(i) 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 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 customerschanges or restrictions on its assets, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them and to preserve the goodwill of their respective operations or businesses;
(biii) (A) acquire (1) (by merger, consolidation or acquisition of stock or assets) any other Person or (2) to the Company shall notextent in excess of $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 shall not permit any of its Subsidiaries to, (i) authorize except for issuanceissuances under the ESPP authorized under Section 3.5(c), issue, deliversell, sell pledge, dispose of, grant, transfer, encumber, or agree authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or commit to issueEncumbrance of, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber enter into or amend any Contract or understanding with respect to the voting 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 July 20, 2020 and issued in accordance with their terms in effect as of July 20, 2020 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 dividends paid by any direct or indirect wholly owned Subsidiary to it or to any other direct or indirect wholly owned Subsidiary) or 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 offer to redeem, repurchase 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, 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 (A) expirations of any such Contract in the Ordinary Course in accordance with the terms of such Contract, or (B) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other 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) file any amended Tax Return, (D) enter into any closing agreement with respect to any 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, (G) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment, (H) enter into any Tax sharing or similar agreement or arrangement, (I) fail to pay any material Tax that becomes due and payable or (J) incur any Taxes outside of the 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, (B) sales, leases or other dispositions of assets (not including services) with a Fair Value not in excess of $5,000,000 in the aggregate other than pursuant to Material Contracts in effect prior to July 20, 2020 and (C) non-exclusive licenses entered into in the Ordinary Course and (D) 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 July 20, 2020 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 Company Employee or other service provider, except for annual merit-based increases in base salary or base wages in the Ordinary Course for Company Employees or other 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%)), (C) 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 July 20, 2020, (D) take any action to accelerate the vesting or payment, or fund or in any other securities way secure the payment, of compensation or benefits under any securities convertible or exercisable intoCompany Benefit Plan other than vesting acceleration of all Company Options and Company RSUs in the Merger as contemplated by Section 3.5(b), (E) grant any new awards, or amend or modify the terms of any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents outstanding awards (including, without limitation, stock appreciation rights or phantom interestsany 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, except as may be required by GAAP, (G) forgive any loans, issue any loans or advance any loans to any current or former Company Employees, (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 issuances cause;
(xviii) recognize any union, works council or other labor organization as the representative of Common Shares upon the exercise of Options outstanding as any of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock or other equity interests employees of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or modify or terminate, or pay any benefit that is not required by, any Benefit Plan or other 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;
(f) the Company shall not, and shall not permit any of its Subsidiaries to, (x) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)modify, or (ii) waive, release, grant, assign, modify or transfer terminate any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, exceptLabor Agreement, in each case, except as required by applicable Law;
(mxix) implement or announce any employee layoffs or location closings, that would implicate the Company shall not, and shall not permit WARN Act;
(xx) enter into any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of Contract which contains a change in applicable Law control or similar provision that would be triggered in GAAPconnection with this Agreement or the Merger;
(nxxi) other than in the Company shall notOrdinary Course, and shall not permit any of its Subsidiaries to, take, amend or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate modify in any material respect atrespect, or as extent, renew or terminate any lease, sublease, license or other agreement for the use or occupancy of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfiedreal property, or omitenter into any new lease, sublease, license or agree to omit, to take other agreement for the use or occupancy of any action necessary to prevent any such representation real property;
(xxii) maintain insurance at less than current levels or warranty from being inaccurate otherwise in a manner inconsistent with past practice in any material respect at any such time or to prevent any such condition from not being satisfiedrespects;
(oxxiii) the Company shall notengage in any transaction with, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle arrangement or compromise understanding with, any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit Affiliate of the Company or any other Person covered by Item 404 of its Subsidiaries;Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; or
(pxxiv) the Company shall (i) use its commercially reasonable efforts toagree, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree authorize or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 (a) The Company shall, and shall cause each of the Company Disclosure Schedule or as consented to in writing by Parentits Subsidiaries to, the Company covenants from and agrees that during the period from after the date of this Agreement to until the earlier of the Effective Time (or until and the termination of this Agreement in accordance with Article 7 hereof):
IX (athe “Interim Period”) (unless Parent shall otherwise approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), except as otherwise expressly required by this Agreement or except as required by applicable Law), conduct its business in the Ordinary Course of Business and use commercially reasonable efforts to conduct its business in accordance with applicable Law, to the extent consistent with the foregoing, shall use and cause each of its Subsidiaries to use their respective commercially reasonable efforts to maintain its and its Subsidiaries’ business and operations of the Company assets and its Subsidiaries shall be conductedrelations and goodwill with Governmental Entities, and the books and records of the Company and its Subsidiaries shall be maintained, only in the ordinary course of business and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisersdistributors, distributors creditors, lessors, employees, agents and business associates; provided that, the Company and its Subsidiaries shall be permitted to take commercially reasonable actions as reasonably required to comply with COVID-19 Measures (provided, further that to the extent reasonably practicable, in connection with taking any such actions which would otherwise be prohibited by any provision of this Agreement, the Company shall provide advance notice to Parent (and if advance notice is not reasonably practicable, shall provide notice to Parent promptly following the taking of any such actions) and reasonably consult in good faith with Parent with respect thereto). Without limiting the generality of and in furtherance of the foregoing sentence, during the Interim Period, except as otherwise expressly contemplated or required by this Agreement, required by applicable Law, as approved in writing by Parent (such approval not to be unreasonably withheld, conditioned or delayed, except that Parent may withhold, condition or delay approval of actions contemplated by Section 7.1(a)(iii) or Section 7.1(a)(iv) in Parent’s sole discretion), or set forth in the corresponding subsection of Section 7.1(a) of the Company Disclosure Letter, the Company shall not and shall cause its Subsidiaries not to:
(i) adopt or publicly propose any change in its Organizational Documents (other material third parties having business dealings with them and than to preserve the goodwill of their respective businessescorrect scrivener’s errors or immaterial or ministerial amendments);
(bii) merge or consolidate the Company shall not, and shall not permit or any of its Subsidiaries towith any other Person, (i) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock or the capital stock of deconsolidate any of its Subsidiariesthe JVs or restructure, any other securities reorganize, recapitalize or any securities convertible completely or exercisable intopartially liquidate or dissolve (provided, that the Company may effect or any rights, warrants or options cause to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon be effected the exercise of Options outstanding as of the date hereof; actions referred to in this clause (ii) repurchaseto the extent they involve only the Company’s Wholly Owned Subsidiaries and are reasonably required to be undertaken to effectuate transactions otherwise permitted under clauses (iii) or (iv) below);
(iii) acquire, redeem directly or indirectly by merger, consolidation, acquisition of stock or assets or otherwise, any business, Person or assets from any other Person with a fair market value or purchase price in excess of $7,500,000 in any individual transaction or series of related transactions or $30,000,000 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;
(iv) transfer, sell, lease, divest, cancel, abandon, allow to expire or lapse, license, outsource or otherwise acquire dispose of, or grant any shares of the capital stock Encumbrance (other than any Permitted Encumbrance) upon, any properties or other equity interests assets (tangible or intangible, including any Intellectual Property Rights) of the Company or any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments product lines or rights of any kind to acquire, capital stock or other equity interests of the Company or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security businesses of the Company or any of its Subsidiaries, except (A) other than with respect to Intellectual Property Rights and outsourcing, in connection with services provided in the Ordinary Course of Business, (B) expiration, abandonment or sales of obsolete or unused assets in the Ordinary Course of Business, (C) sales, leases, licenses, outsourcing or other dispositions of tangible assets with a fair market value not in excess of $2,000,000 individually or $5,000,000 in the aggregate, (D) with respect to Intellectual Property Rights, non-exclusive grants of licenses in the Ordinary Course of Business and (E) the grant of Encumbrances to secure Indebtedness permitted by Section 7.1(a)(ix);
(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 of any of its Subsidiaries, 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 (A) proxies or voting agreements solicited by or on behalf of the Company in order to obtain the Requisite Company Vote or in connection with any annual meeting of the Company’s stockholders or (B) the issuance of shares of such capital stock (1) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, (2) in respect of Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, issuances under the Stock Plans (in either case, to the extent disclosed in Section5.2(d) of the Company Disclosure Letter) or (3) pursuant to the ESPP in accordance with its terms and subject to Section 4.2(c));
(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) outside the Ordinary Course of Business in excess of $2 million individually or $10 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 any of its capital stock (including with respect to the Company, for the avoidance of doubt, Shares), except for (i) dividends or distributions paid by any Wholly Owned Subsidiary to the Company, (ii) dividends or distributions to any other Wholly Owned Subsidiary of the Company, or (iii) to the extent any such dividend or other distribution is in accordance with the requirements of the joint venture, operating or similar Contract of any of the JVs;
(viii) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to 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 (including with respect to the Company, for the avoidance of doubt, Shares) (provided, that the Company may effect or cause to be effected the actions referred to in this clause (viii) to the extent they involve only the Company’s Wholly Owned Subsidiaries and are reasonably required to be undertaken to effectuate transactions otherwise permitted under clauses (iii) or (iv) above);
(ix) redeem, repurchase or prepay (other than prepayment of revolving loans), assume, guarantee, issue, incur, endorse or otherwise become liable for or modify the terms of any Indebtedness (including the issuance of any debt securities or any warrants or other rights to acquire any debt security) or enter into any hedging agreements, except for (subject, in each case, to Section 7.1(a)(xii)) (A)
(1) Indebtedness of the type contemplated by clauses (a) and (b) of the definition thereof in the Ordinary Course of Business up to $25,000,000 and (2) other Indebtedness in the Ordinary Course of Business up to $10,000,000, (B) drawdowns under the Credit Agreement up to $50,000,000, (C) guarantees of Indebtedness of its Wholly Owned Subsidiaries otherwise incurred in compliance with this Section 7.1(a), (D) Indebtedness between the Company and any of its Wholly Owned Subsidiaries or between one Wholly Owned Subsidiary of the Company and another Wholly Owned Subsidiary of the Company, (E) hedging agreements entered into in the Ordinary Course of Business and not for speculative purposes, (F) extensions or renewals of any outstanding Indebtedness in the Ordinary Course of Business that do not include the addition, renewal or modification of any call protection or similar provisions or other restrictions or limitations on prepayment or repayment, or (G) refinancings or replacements of any outstanding Indebtedness on terms that are substantially similar to the terms of such outstanding Indebtedness or are otherwise more favorable to the Company and its Subsidiaries; provided, that any Indebtedness assumed, guaranteed, issued or incurred by the Company or any of its Subsidiaries or for which the Company or any of its Subsidiaries otherwise becomes liable under this Section 7.1(a)(ix) shall permit prepayment at any time without penalty of any kind;
(x) make or authorize any payment of, or accrual or commitment for, capital expenditures, except (1) capital expenditures in 2022 in an amount not in excess of 5% of the aggregate amount set forth in the Company’s 2021 capital budget plan and (2) subject to prior consultation with Parent, any additional capital expenditures not described in clause (1) so long as the aggregate amount of such capital expenditures made pursuant to this clause (2) do not exceed $15 million; provided, however, subject to prior consultation with Parent, that the Company and its Subsidiaries shall be permitted to make emergency capital expenditures in any commercially reasonable amount that the Company determines is necessary to maintain its ability to operate its businesses in the Ordinary Course of Business;
(xi) 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 Contracts entered into in the Ordinary Course of Business; provided, however, that in no event may the Company take any of the foregoing actions with respect to any Tax “hold harmless,” sharing, allocation or indemnification agreement or arrangement (other than, in each case, (x) such agreements or arrangements solely between or among the Company and any of its Wholly Owned Subsidiaries, (y) such agreements or arrangements contained in commercial contracts entered into, amended or terminated in the Ordinary Course of Business the principal subject of which is not Taxes and (z) customary Tax indemnification or Tax benefit provisions contained in merger agreements, stock purchase agreements, asset purchase agreements or other business combination agreements entered into in accordance with Section 7.1(a)); provided, further, that in the event that the Company engages in any discussion to enter into any new JV (and prior to requesting Parent’s written consent to enter into the relevant limited liability company agreement to establish such JV) the Company shall notify Parent of any such discussion as soon as reasonably practicable following such discussion (including, for the avoidance of doubt, any discussions disclosed in Section 5.11(a)(xiii) of the Company Disclosure Letter);
(xii) terminate, fail to renew 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 Material Contract, other than terminations, expirations or non-renewals of any such Contract in the Ordinary Course of Business and in accordance with the terms of such Contract with no further action by the Company, any of its Subsidiaries or other party to such Contract, except for any ministerial actions or non-exclusive licenses under Company Intellectual Property, in each case, granted by a licensor in the Ordinary Course of Business;
(xiii) cancel, modify or waive any debts or claims held by or owed to the Company or any of its Subsidiaries having in each case a value in excess of $2,000,000 individually or $10,000,000 in the aggregate outside the Ordinary Course of Business;
(xiv) other than in the Ordinary Course of Business, reduce the amount of insurance coverage or fail to use commercially reasonable efforts to renew or replace any existing Insurance Policies;
(xv) 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 Sections 7.15, 4.3(f) and 7.1(a)(xvii), respectively, settle or compromise any Proceeding for an amount in excess of $2 million individually or $10 million in the aggregate, or which would reasonably be expected to (A) prevent, materially delay or materially impair the consummation of the transactions contemplated by this Agreement, (B) as set forth in Section 5.01(b) have a materially negative impact or impose any material restriction on the operations of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted and its Subsidiaries or (C) in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledgeinvolve any criminal liability, any equity interest owned admission of material wrongdoing or any material wrongful conduct by it in any of its Subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, and shall not permit any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other 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 to other wholly owned Subsidiaries of the Company consistent with past practices);
(e) neither the Company nor any of its Subsidiaries shall (i) grant or agree to any increase in any manner the compensation or benefits of any current or former director, officer or employee, except increases in the ordinary course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of the Company Disclosure Schedule and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans, (ii) enter into any new or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or any of its Subsidiaries;
(xvi) make any changes with respect to accounting policies, procedures, methods, principals or practices, except as required by changes in GAAP or applicable Law;
(iiixvii) make, change or revoke any material Tax election; change an annual Tax accounting period; adopt or change any material Tax accounting method; file any material amended Tax Return; enter into any 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;
(xviii) except as set forth required pursuant to the terms of any Company Benefit Plan in Section 5.01(e) effect as of the Company Disclosure Scheduledate of this Agreement, as may be required to comply with applicable Law and or as provided set forth on Section 5.13(a) of the Company Disclosure Letter, (A) increase in any manner the compensation or otherwise contemplated 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 this Agreement (including, without limitation, Section 2.02 hereof), become obligated under or terminate any Company Benefit Plan or any arrangement that was not in existence on would have been a Company Benefit Plan had it been entered into prior to the date hereof of this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Company Benefit Plan, (D) take any action to accelerate the vesting or terminatelapsing of restrictions or payment, or pay fund or in any benefit other way secure the payment, of compensation or benefits under any Company Benefit Plan, (E) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is not required byby applicable Law to be funded 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, (F) forgive any Benefit Plan loans or issue any loans to any Company Employee (other than routine travel advances issued in the Ordinary Course of Business), (G) hire any employee benefit plan or engage any agreement, arrangement, plan independent contractor (who is a natural person) with an annual salary or policy for wage rate or consulting fees in excess of $200,000 or (H) terminate the benefit employment or service of any current Company Employee with an annual salary or former director, officer wage rate or employee consulting fees in existence on the date hereofexcess of $200,000 other than for cause;
(fxix) the Company shall not, and shall not permit any of its Subsidiaries become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, labor organization, works council or similar organization;
(xxx) enter into any new line of business, or acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof other than acquisitions or purchases made with the prior written consent of the Parent (each an “Approved Acquisition”) and other than non-taxable transfers by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(gxxi) the Company shall not, and shall not permit any of its Subsidiaries to, (x) incur, assume, be responsible for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations of another person, issue or sell, or agree to issue or sell, any debt securities or options, warrants or calls or rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of others, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing; or (y) sell, lease, license or subject to any Lien or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) of the Company Disclosure Schedule), (iii) Permitted Liens, (iv) 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 in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) neither the Company nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, or materially amend, modify terminate or supplement any Contract outside the ordinary course of business consistent with past practice under which the Company or any of its Subsidiaries shall have monetary obligations in excess of $25,000 (except as may be necessary for the Company allow to comply with its obligations hereunder), or (ii) waive, release, grant, assign, modify or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(j) the Company shall not, and shall not permit any of its Subsidiaries to, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of the Company Disclosure Schedule by category) or make any commitments with respect to capital expenditures or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregate;
(k) the Company shall, and shall cause its Subsidiaries to, (i) continue in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s and its Subsidiaries’ past practices, (ii) use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated, (iii) maintain all Leased Real Property (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respects, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Liens, subject to the expiration of real property leases in accordance with their terms, and (iv) pay, prior to the imposition of any Lien or material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them in good faith;
(l) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, or (ii) 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 which is different in lapse any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used Licenses held by the Company or any of its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAP;
(n) the Company shall not, and shall not permit any of its Subsidiaries to, take, or agree or commit to take, any action that would, or is reasonably likely to, make any representation or warranty of the Company contained in this Agreement inaccurate in any material respect at, or as of any time prior to, the Effective Time or result in any of the conditions set forth in Article 6 not being satisfied, or omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied;
(o) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election or change an annual accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim, assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any of its Subsidiaries, or take any other similar action, or omit to take any action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action or omission would have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiaries;
(p) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries to use their respective commercially reasonable efforts to, prevent the termination of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the Company or any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, enter into, or materially amend, modify or supplement, any Lease or other Material Contract under which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendment, modification or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements in the aggregate; and
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (LHC Group, Inc)