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 as otherwise contemplated by this Agreement or as set forth in Section 5.01 of Prior to the Closing Date, unless the Company Disclosure Schedule or as has consented to in writing by Parentthereto, 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):Assignor:
(ai) the business shall conduct its operations according to its usual, regular 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 in substantially the Company and its Subsidiaries same manner as heretofore conducted;
(ii) shall use their commercially its reasonable best efforts to preserve intact their current its business organizations, keep available the services of their current officers organization and employees goodwill 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 businessesit;
(biii) shall promptly notify the Company shall not, and shall not permit of (x) any of material change in its Subsidiaries to, condition (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 financial or otherwise), pledge business, properties, assets, liabilities or otherwise encumber the normal course of its business or of its properties, (y) any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or (z) the breach of any representation or warranty contained herein;
(iv) shall not issue any shares of its capital stock or securities;
(v) shall not (w) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the capital stock obligations of any of its Subsidiariesother individual, corporation or other entity, (x) make any loans or advances to any other securities or any securities convertible or exercisable intoperson, or any rightsexcept in each case in the ordinary course of business, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (y) acquire (including, without limitation, for cash or shares of stock, by merger, consolidation, or acquisition of stock appreciation rights or phantom interests)assets) any interest in any corporation, partnership or other business organization or division thereof or any assets, or make any investment either by purchase of stock or securities, contributions of capital or property transfer or, except for issuances in the ordinary course of Common Shares upon the exercise business, consistent with past practice, purchase any property or assets of Options outstanding as any other person or (z) effect a sale or other disposition of any of the date hereof; (ii) repurchase, redeem Assets or otherwise acquire any shares of allow 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 creation of any kind to acquire, capital stock lien 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 Plansencumbrance thereon;
(cvi) the Company shall not (ix) 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), dividend or make any other distributions in distribution or payment with respect ofto any shares of its capital stock or other ownership interests or (y) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or make any commitment for any such action;
(vii) shall not amend or otherwise change its articles of incorporation or bylaws or equivalent organizational documents
(viii) shall not increase the compensation payable or to become payable to its officers or employees, pay any employment related or other bonus to its shareholder, or, except as presently bound to do, grant any severance or termination pay to, or enter into any employment or severance agreement with, any of its capital stock (except for dividends paid by direct directors, officers or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices)employees;
(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 take 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 action other than in the ordinary course of business and in a manner consistent with past practices in excess of $500,000 in the aggregate;practice with respect to accounting policies or procedures; and
(kx) 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, untrue or incorrect 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 foregoingClosing Date.
Appears in 3 contracts
Sources: Asset Purchase Agreement (Ultimate Software Group Inc), Asset Purchase Agreement (Ultimate Software Group Inc), Asset Acquisition Agreement (Ultimate Software 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 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 earlier of the termination of this Agreement in accordance with Article 7 hereofits terms and the Effective Time (unless Parent shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement):
(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 and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially reasonable respective best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) the Company shall not, and it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) except for the repurchase of the Class A Warrant contemplated by the Warrantholder Agreement and the repurchase of outstanding Class B Preferred Shares, repurchase, redeem or otherwise acquire, or 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)otherwise acquire, 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 into or exchangeable 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 its capital stock or other equity interests stock;
(c) except as set forth in Section 6.1(c) of the Company or Disclosure Letter, neither it nor any of its Subsidiaries shall (includingi) issue, without limitationsell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any other equity interests property or assets (other than Shares issuable pursuant to options outstanding on the date hereof under the Stock Plan or upon conversion of the Company or any of its SubsidiariesClass A Preferred Shares and Class C Preferred Shares); or (iiiii) amendtransfer, modify or waive any term of any outstanding security of the Company or any of its Subsidiarieslease, except (A) as required by this Agreementlicense, (B) as set forth in Section 5.01(b) of the Company Disclosure Scheduleguarantee, 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 mortgage, pledge, dispose of or agree to sell, transfer encumber any material property 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 assets (including capital stock of any of its Subsidiaries, (ii) amend or otherwise change its certificate of incorporation incur or bylaws or permit modify 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 material indebtedness 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, liability; or (iii) except as set forth in Section 5.01(e6.1(c)(iii) of the Company Disclosure ScheduleLetter, as may be required to comply with applicable Law make or authorize or commit for any capital expenditures other than in amounts less than $25,000 individually and as provided or otherwise contemplated $100,000 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 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 limitationaggregate or, by merging or consolidating withany means, or purchasing the assets or capital stock or other equity interests make any acquisition of, or by investment in, assets or stock of 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 entity 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 Subsidiaries25,000;
(hd) neither the Company it nor any of its Subsidiaries shall adopt terminate, establish, adopt, enter into, make any new grants or put into effect a plan of complete awards under, amend or partial liquidationotherwise modify, dissolutionany Compensation and Benefit Plans or increase the salary, mergerwage, consolidation, restructuring, recapitalization bonus or other reorganization compensation of any employees except increases for non-executive employees occurring in the Company or any ordinary and usual course of its Subsidiaries business (other than any transaction specifically contemplated by this Agreementwhich shall include normal periodic performance reviews and related compensation and benefit increases);
(ie) 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 neither it nor any of its Subsidiaries shall have monetary obligations settle or compromise any material claims or litigation or, except in excess the ordinary and usual course of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)business, modify, amend or (ii) waive, release, grant, assign, modify or transfer terminate any of its material Contracts or waive, release or assign any material rights or claims (whether such rights or claims arise under a Contract or otherwise)claims;
(jf) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, authorize or shall make any capital expenditures (other than pursuant to commitments prior to the date hereof Tax election 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 a beneficiary or loss loss-payable payee to be canceled cancelled or terminated, (iii) maintain all Leased Real Property (including, without limitation, terminated except in the furniture, fixtures, equipment ordinary 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 usual course 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;business; and
(lg) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, (i) materially amend any currently existing labor will authorize 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 an 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 3 contracts
Sources: Merger Agreement (CSC Holdings Inc), Merger Agreement (Clearview Cinema Group Inc), Merger Agreement (Clearview Cinema Group Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 6.01 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 8 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, conducted 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, including without limitation, limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; hereof or (ii) repurchase, redeem or otherwise acquire acquire, or permit any of its Subsidiaries to 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 3 contracts
Sources: Acquisition Agreement (Goodys Family Clothing Inc /Tn), Acquisition Agreement (GMM Capital LLC), Acquisition Agreement (GMM Capital 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 hereof and prior to the Effective Time date on which Purchaser's nominees comprise a majority of the Board of Directors of the Company (or until termination of unless Praxair shall otherwise approve in writing and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(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 the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially its reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing rela- tions and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) it shall not (A) sell or pledge any capital stock owned by it in any of its Subsidiaries; (B) amend the Company shall notCharter or its by-laws or amend, modify or terminate the Rights Agreement; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any Shares or Preferred Shares other than regular quarterly or semi- annual cash dividends not in excess of $0.12 per Share and shall not regular quarterly or semi-annual cash dividends on the Preferred Shares; or (E) repurchase, redeem or otherwise acquire, or 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)otherwise acquire, 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 into or exchangeable 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 its capital stock or other equity interests except in connection with the ordinary course of operations of the Company or CBI Salaried Employee Stock Ownership Plan (1987);
(iii) neither it nor any of its Subsidiaries shall except as disclosed in Section 7.1(a) of the Company Disclosure Letter (includingA) issue, without limitationsell, pledge, dispose of or encumber, or authorize or propose the issuance, sale, pledge, disposition or encumbrance of, any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other equity interests property or assets (other than Shares issuable pursuant to options outstanding on the date hereof under the Stock Plan or upon conversion of Convertible Preferred Shares; (B) other than in the Company ordinary and usual course of busi- ness, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of any other property or assets or encumber any property or assets (including capital stock of any of its Subsidiaries)) or incur or modify any material indebtedness or other liability; or (iiiC) amendmake any commitments for, modify make or waive authorize any term of any outstanding security of the Company or any of its Subsidiariescapital expenditures other than existing capital expenditures required to be made pursuant to existing capital projects, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b7.1(a)(iii) of the Company Disclosure ScheduleLetter, in connection with accelerating the vesting schedules which have been previously authorized or, by any means, make any acquisition of, or investment in, assets or stock of the Options to the extent required by the Stock Plans any other Person or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansentity;
(civ) the Company shall not (iexcept as disclosed in Section 7.1(a) 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) Disclosure Letter, neither the Company it nor any of its Subsidiaries shall (i) grant terminate, establish, adopt, enter into, make any new grants or agree to awards under, amend or otherwise modify, any Compensation and Benefit Plans or increase in any manner the salary, wage, bonus or other compensation or benefits of any current or former director, officer or employee, except employees other than increases in compensation in the ordinary course of business business, in each case, consistent with past practice, increases practices with regard to frequency 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 hereofamount;
(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 it nor any of its Subsidiaries shall adopt settle or put into effect a plan compromise any material claims or litigation or, except in the ordinary and usual course of complete business modify, amend or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or terminate any of its Subsidiaries (other than material Contracts or waive, release or assign any transaction specifically contemplated by this Agreement)material rights or claims;
(ivi) 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 neither it nor 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 Tax election 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 a beneficiary or loss loss-payable payee to be canceled cancelled or terminated, (iii) maintain all Leased Real Property (including, without limitation, terminated except in the furniture, fixtures, equipment ordinary 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 usual course 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;business; and
(lvii) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, (i) materially amend any currently existing labor will authorize 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 an 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 (Px Acquisition Corp), Merger Agreement (Px Acquisition Corp)
Interim Operations. Except 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 (which approval shall not 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 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 hereofLetter):
(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 course of business consistent with past practice, and the Company it and its Subsidiaries shall use their respective commercially reasonable best efforts to (i) preserve intact their current its present business organizationsorganization substantially intact, (ii) maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees, business associates and other third parties with which the Company has material business relations consistent with past practice, (iii) keep available the services of their its current officers and employees key employees, and preserve their relationships with their (iv) maintain in effect all material customersforeign, suppliersfederal, licensorsstate and local licenses, licenseesapprovals and authorizations, advertisersincluding without limitation, distributors all material licenses and other material third parties having business dealings with them and permits that are required for the Company or any of its Subsidiaries to preserve the goodwill of their respective businessescarry on its business;
(b) the Company it shall not, and shall not permit any of its Subsidiaries to, and shall not commit to, (i) authorize for issuance, issue, deliversell, sell pledge, dispose of 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 owned by it in 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) repurchaseamend its certificate of incorporation or by-laws or term of any outstanding security of the Company or its Subsidiaries; (iii) split, redeem combine or otherwise acquire reclassify any shares of the capital stock or issue or authorize the issuance of any other equity interests securities in respect of, in lieu of or in substitution for shares of capital stock, of the Company or any less-than-wholly-owned Subsidiary of the Company; (iv) declare, set aside or pay any dividend payable in cash, stock or property or make any other actual, constructive or deemed distribution (whether in cash, stock or property or any combination thereof) in respect of any capital stock, other than dividends by a direct or indirect wholly-owned Subsidiary of the Company to its parent; or (v) purchase, redeem or otherwise acquire, or modify or amend, or offer to redeem, purchase or otherwise acquire, or modify or amend, any Company equity or equity related securities or any equity or equity related securities of any of the Company’s Subsidiaries;
(c) it shall not, and shall not permit any of its Subsidiaries (includingto, without limitationand shall not commit to, offer, issue or sell, any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests 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 stockstock of any class, except that the Company may (i) issue up to 20,000 Shares pursuant to the Company’s Amended and shall not permit any Restated Employee Qualified Stock Purchase Plan dated November 13, 1998, (ii) issue Shares upon exercise of its Subsidiaries Company Options outstanding on the date hereof or hereafter granted in accordance with the provisions of subclause (iii) of this clause (c) or pursuant to splitthe Company Warrants, combine or reclassify any shares (iii) grant Company Options to purchase up to an aggregate of its capital stock57,500 Shares to non-employee directors for their attendance at board meetings, in accordance with the terms of the Directors Plan as in effect on the date hereof and consistent with past practice and with an exercise price per Share no less than the fair market value of a Share as of the date of grant;
(d) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company it shall not, and shall not permit any of its Subsidiaries to, declareand shall not commit to, set aside (i) other than in the ordinary and usual course of business consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or pay encumber any dividends on material property or assets (whether in cash, stock or other property), or make any other distributions in respect of, any of its including capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned of Subsidiaries of the Company consistent with past practicesCompany);
; (eii) neither the Company nor any of its Subsidiaries shall (i) grant without prior written notice to Parent, make, authorize or commit or agree to make any increase capital expenditures or any obligations or liabilities in respect thereof, except for those which do not exceed $10,000; (iii) make, authorize or commit or agree to make any capital expenditures or any obligations or liabilities in respect thereof, except for those which do not exceed $25,000; (iv) acquire or propose to acquire (whether by merger, consolidation, purchase of equity or assets or otherwise) any assets or stock of or other interest in any manner the compensation other Person or benefits of any current or former director, officer or employeeentity, except increases in connection with capital expenditures permitted hereunder and except for acquisitions of inventory and other assets in the ordinary course of business; (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than loans (not prohibited under Section 13(k) of the Exchange Act) to employees 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 practice not to exceed $5,000 to any individual or described $50,000 in Section 5.01(ethe aggregate) or investments by the Company or a wholly-owned Subsidiary of the Company Disclosure Schedule and except to or 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 wholly-owned Subsidiary of its Subsidiariesthe Company, or incur (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, including 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 drawing upon the Company’s Subsidiaries; existing line of credit) or (y) establish or acquire (i) adversely modify 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 Indebtedness for or pre-pay any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guaranteeborrowed money, or agree to guarantee, guarantee any such Indebtedness or Liabilities or obligations 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 of the Company or any of its Subsidiaries, guarantee any debt securities of othersanother Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another person Person or enter into any arrangement having the economic effect of any of the foregoing; foregoing (or incur or modify any other material liability), (yvi) sellterminate, lease, license cancel or subject to request any Lien or otherwise dispose ofadverse change in, or agree to sell, lease or subject to any Lien or otherwise dispose ofadverse change in, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate other than (i) pursuant Material Contract to existing contracts and commitments described in Section 5.01(g) of which 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 is a party, or put into effect a plan waive, release or assign any material rights, claims of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization benefits of the Company or any of its Subsidiaries thereunder, (vii) other than in the ordinary course of business consistent with past practice, enter into any transaction specifically contemplated by this Agreement)new Contract, or fail to use reasonable business efforts to renew any Contract, to which the Company or any of its Subsidiaries is a party, which is material to the Company and its Subsidiaries taken as a whole; (viii) enter into any non-competition Contracts or other Contracts that purport to limit in any respect either the type of business in which it (or, after giving effect to the Merger, Parent or its Subsidiaries) may engage or the manner or locations in which any of them may so engage in any business; (ix) enter into any partnership, joint venture, strategic alliance, revenue or profit sharing agreement or similar arrangement with any Person; or (x) change or modify its line of business from the line of business in which it is engaged as of the date hereof or enter into any new line of business;
(ie) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company it shall not, and shall not permit any of its Subsidiaries to, and shall not commit to, (i) terminate, establish, adopt, enter into, make any new grants or materially amendawards under, amend or otherwise modify, any Benefit Plans, except as provided in Section 6.1(c) and Section 6.10(a)(v), (ii) except in the ordinary course of business or as required by Law or the terms of any Benefit Plan, make any contribution to any existing Benefit Plan, (iii) grant any pension, retirement, severance, retention, change of control or termination pay or rights to any director, officer, employee or other service provider of the Company or any of its Subsidiaries, or amend or modify the terms of any Company Option, except as required by Law, (iv) increase the salary, wage, bonus or supplement other compensation or benefits of any Contract outside directors, officers or employees, or consultants, except for (A) annual salary increases to non-executive employees made in the ordinary course of business consistent with past practice under which at the regularly scheduled times; provided that the aggregate dollar amount of such increases shall not exceed the corresponding amount for the calendar year 2003, and (B) subject to Section 6.1(c), the grant of options to non-employee directors of the Company pursuant to the Directors Plan, or (v) make payments or distributions (other than normal salaries) to or enter into any transaction with any affiliate of its Subsidiaries shall have monetary obligations the Company, (vi) enter into any consulting agreement (A) with any consultant (other than surgeon consultants) providing for payments in excess of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)50,000, or (iiB) waivewith any surgeon consultant regardless of the amount of payments to be made thereunder, release(vii) accelerate the payment of compensation or benefits to any director, grantofficer, assignemployee or consultant, modify except as required by applicable Law, agreements in effect as of the date of this Agreement or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwiseSection 6.10(a);.
(jf) the Company it shall not, and shall not permit any of its Subsidiaries to, authorize and shall not commit to, (i) prior to consulting with Parent, commence any litigation or make arbitration proceeding or any capital expenditures (regulatory or other governmental action or proceeding with or before any Governmental Entity other than pursuant ordinary contract and commercial litigation that the Company does not reasonably expect to commitments result in total costs to the Company in excess of $300,000, (ii) waive, release or assign any material rights or claims, or (iii) pay, discharge, settle, compromise or satisfy any claims, liabilities or obligations (absolute, accrued, contingent, asserted, unasserted or otherwise), other than the payment, discharge, settlement, compromise or satisfaction, in the ordinary course of business consistent in amount and kind with past practice, of claims, liabilities or obligations reflected in the Company’s most recent financial statements (including the notes thereto) filed with the Company Filed Reports prior to the date hereof or other planned capital expenditures incurred since the date of such financial statements 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;
(kg) 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, and shall not commit to, change its (i) materially amend any currently existing labor methods or collective bargaining agreementprinciples of accounting in effect at the Audit Date, memorandum except as required by changes in GAAP after the date of this Agreement, as concurred by its independent public accountants, or understanding, grievance settlement as required by applicable Law or any other agreement or commitment to or relating to any labor union, by a Governmental Entity 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 Lawfiscal year;
(mh) the Company it and its Subsidiaries shall use commercially reasonable efforts to keep in place any material insurance policy naming it as a beneficiary or loss-payable payee; and
(i) it shall not, and shall not permit any of its Subsidiaries to, change any of the accounting policiesagree, practices or procedures (including tax accounting policiesauthorize, 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 Returndo, enter into any closing agreement, settle an agreement to do 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 publicly announce an intention to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Biomet Inc), Merger Agreement (Interpore International Inc /De/)
Interim Operations. Except FEI covenants and agrees as to itself and its Subsidiaries, and PIE covenants and agrees as to the PEO Group and the PEO Business that after the date hereof and prior to the Closing (unless the other party shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed), except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 of connection with 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):Restructuring:
(a) the its business and operations that 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 the Company they and its their Subsidiaries shall use their commercially reasonable respective best efforts to preserve their business organizations intact and 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, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) the Company shall not, and they shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliversell, sell pledge, dispose of 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 owned by them in any of its their 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) amend their Articles of Association, certificate of incorporation or by-laws; (iii) split, combine or reclassify their outstanding shares of capital stock; (iv) declare, set aside or pay any dividend or make any distribution payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) repurchase, redeem or otherwise acquire acquire, or permit any of their Subsidiaries to purchase or otherwise acquire, any shares of the their capital stock or other equity interests any securities convertible into or exchangeable or exercisable for any shares of the Company or its capital stock;
(c) neither they nor any of its their Subsidiaries shall (includingi) issue, without limitationsell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of their capital stock of any class or any Voting Debt or any other property or assets (other than, in the case of FEI, shares of Common Stock issuable without further action of FEI's board of directors pursuant to options outstanding on the date hereof under the Stock Option Plan); (ii) other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of their Subsidiaries) or incur or modify any material indebtedness or other equity interests liability; (iii) except as disclosed in budgets provided to the other party hereto prior to the date hereof, make any commitments for, make or authorize any capital expenditures other than in the ordinary and usual course of business and in amounts less than $50,000 individually and $250,000 in the Company aggregate or, by any means, make any acquisition of, or investment in, assets or stock of any of its Subsidiaries)other Person or entity; or (iiiiv) amendenter into any joint venture, modify merger or waive other similar agreement with 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 stockPerson;
(d) other than quarterly dividends not in excess except for grants of $0.075 per Common Share declared and paid options, consistent with FEI's past practicespractice, the Company shall notpursuant to its Stock Option Plan to purchase no greater than 5,000 shares of Common Stock, and shall not permit neither they nor any of its their Subsidiaries toshall terminate, declareestablish, set aside adopt, enter into, make any new grants or pay awards under, amend or otherwise modify, any dividends on (whether in cashCompensation and Benefit Plans, stock or increase the salary, wage, bonus or other property), or make compensation of any other distributions employees except increases occurring in respect of, any the ordinary and usual course of its capital stock business in accordance with established past practice (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 practiceswhich shall include normal periodic performance reviews and related compensation and benefit increases);
(e) neither the Company they nor any of its their Subsidiaries shall (i) grant settle or agree to compromise any increase in any manner the compensation material claims or benefits of any current or former director, officer or employeelitigation or, except increases in the ordinary and usual course of business consistent with past practicemodify, increases and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed amend 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 terminate any of its Subsidiariestheir material Contracts or waive, release 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 assign any material rights 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 hereofclaims;
(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 they nor any of its their 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 Tax election 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 a beneficiary or loss loss-payable payee to be canceled cancelled or terminated, (iii) maintain all Leased Real Property (including, without limitation, terminated except in the furniture, fixtures, equipment ordinary 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 usual course 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;
(lg) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither they nor any of its their Subsidiaries to, (i) materially amend any currently existing labor will authorize 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 an 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: Combination Agreement (Fei Co), Combination Agreement (Philips Electronics N V)
Interim Operations. Except as otherwise expressly contemplated by this Agreement or Agreement, as required by applicable Law, as set forth in Section 5.01 5.1 of the Company Disclosure Schedule Schedule, or as consented agreed to in writing by ParentPurchaser (which agreement shall not be unreasonably withheld, delayed or conditioned), the Company covenants Company, the Stockholder, and agrees that during the period from the date of this Agreement Asset Sellers covenant and agree that, prior to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):Closing:
(a) the business and operations of the Company and its Subsidiaries The Business 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 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 consistent 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 businessespast practice;
(b) The Company and the Asset Sellers shall use commercially reasonable efforts to keep intact the rights, properties and assets, and vendor, supplier, customer, franchisee and other business relationships of the Business;
(c) 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 other equity interests of the capital stock of any of its Subsidiaries, any other securities or any Company (including securities convertible or exercisable into, or any rights, warrants rights or options to acquire, any such shares, securities capital stock or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interestsinterests of the Company), 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, including securities exchangeable forconvertible into, or options, warrants, calls, commitments rights or rights of any kind options to acquire, capital stock or other equity interests of the Company or any of its SubsidiariesCompany); , 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 stockbylaws;
(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 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, including by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by in any other manner, any business or any corporation, partnership, association or other business organization or division thereof thereof, or make any capital expenditures or commitments in an amount in excess of $25,000 in the aggregate, other than acquisitions pursuant to existing agreements;
(e) The Company shall not hire any employees;
(f) The Company shall not sell, lease, license, subject to any Lien (other than a Permitted Lien) or purchases made otherwise encumber or dispose of (including through any sale-leaseback or similar transaction) any of its properties or assets, and no Asset Seller shall take any such action with the prior written consent respect to any of the Parent (each an “Approved Acquisition”) and Purchased Assets, 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 pursuant to existing agreements, or (ii) Subsidiaries organized outside in the ordinary course of the United States and its territorial possessionsbusiness consistent with past practice;
(g) the The Company shall notnot (i) make or forgive any loans, and shall not permit any of its Subsidiaries advances or capital contributions to, or investments in, any Person, other than trade accounts receivable incurred in the ordinary course of business consistent with past practice, (xii) incur, assume, be guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Indebtedness or pre-pay other obligations of any Indebtedness, enter into any agreement to, incur, assume, be responsible for or pre-pay any Indebtedness, guaranteeother Person, 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, (iii) 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 SubsidiariesPerson;
(h) neither the The Company nor any of its Subsidiaries shall not adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization reorganization;
(i) None 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 Asset Seller 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 other than in the costs or obligations ordinary course of business consistent with past practice;
(j) None of the Company or any Asset Seller (to the extent constituting Purchased Assets) shall waive, release, grant, assign or transfer any of its Subsidiaries resulting from material rights or claims;
(k) Each of the Company and the Asset Sellers shall (i) comply in all material respects with its obligations under the Material Contracts as such amendmentobligations become due, modification (ii) use commercially reasonable efforts to maintain insurance covering risks of the Business of such types and in such amounts as are consistent with its past practices, and (iii) use commercially reasonable efforts not to permit any insurance policy naming the Company as beneficiary or supplement loss payable payee to be canceled or terminated;
(l) None of the Company or any Asset Seller (to the extent relevant to the Purchased Assets or Assumed Liabilities) shall (i) change any accounting policies, practices or procedures (including Tax accounting policies, practices and procedures), except as required by applicable Law or GAAP, (ii) revalue its assets in any material respect (including writing down or writing off any notes or accounts receivable in any material manner), except as required by GAAP, (iii) make or change any Tax election or make or change any method of accounting with respect to Taxes, in each case that would exceed $25,000 per annum individually adversely affect the Company following the Closing, except as required by applicable Law, (iv) settle or $100,000 per annum for all compromise any material Tax liability that would adversely affect the Company following the Closing, (v) file any amended Tax Return, (vi) enter into any Tax allocation, sharing, indemnity or closing agreement, (vii) agree to an extension or waiver of a statute of limitations applicable to any Tax liability, (viii) fail to pay any material Tax as such amendmentsTax becomes due and payable (including any estimated Tax), modifications or (ix) prepare and supplements file any Tax Return in the aggregatea manner inconsistent with past practice; and
(qm) None of the Company Company, the Stockholder or any Asset Seller shall not, and shall not permit any of its Subsidiaries to, agree or commit to do take any of the foregoingforegoing actions prohibited by this Section 5.1. Notwithstanding anything to the contrary set forth in this Agreement, the parties hereto acknowledge and agree that neither Purchaser nor its Affiliates have the right to control or direct the Company’s or any Asset Seller’s operations prior to the Closing. Prior to the Closing, each of the Company and each Asset Seller shall exercise, consistent with the terms of this Agreement, complete control and supervision over its operations.
Appears in 2 contracts
Sources: Purchase Agreement, Purchase Agreement (Red Lion Hotels 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 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 (unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or until termination of delayed) and except as otherwise expressly set forth in this Agreement in accordance with Article 7 hereofor the corresponding subsection of Section 3.1(a) of the Company Disclosure Letter):
(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 the ordinary and usual course and, to the extent consistent therewith, it and each of business and the Company and its Subsidiaries shall use their commercially its respective reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) the Company shall not, and it shall not (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend its Organizational Documents; (C) other than in the case of any direct or indirect, wholly owned Subsidiary, split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries; or (E) repurchase, redeem or otherwise acquire, or 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)otherwise acquire, 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 into or exchangeable 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 its capital stock or other equity interests of the Company or stock;
(iii) neither it nor any of its Subsidiaries shall (includingA) issue, without limitationsell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Company Voting Debt (other equity interests of than Company Common Shares issuable under the Company Option Plans); (B) other than products sold to customers in the ordinary and usual course of business (without limitation as to dollar amount) or otherwise in the ordinary and usual course of business and not in an aggregate amount of more than $5,000,000, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries); (C) incur or modify any indebtedness other than (x) indebtedness existing solely between the Company and its wholly owned Subsidiaries or between such wholly owned Subsidiaries or (iiiy) amendindebtedness in an aggregate amount less than $30,000,000; provided, modify however, that prior to incurring any indebtedness, if practicable, the Company shall provide Parent with a reasonable right of consultation; provided, further, that the foregoing right of consultation shall not apply in the case of indebtedness in respect of letters of credit, guarantees or waive performance bonds or indebtedness existing solely between the Company and its wholly owned Subsidiaries or between such wholly owned Subsidiaries; (D) except as approved by the Transition Team, make or authorize or commit for any term capital expenditures which, individually, is in excess of $1,000,000 or, in the aggregate, are in excess of $10,000,000; and (E) except as otherwise provided in clause (D) immediately above and other than raw materials, supplies and other inventory items acquired in the ordinary and usual course of business consistent with past practice, by any means, make any acquisitions of, or investments in stock of (or other interest in) or assets of any outstanding security of the Company or other Person;
(iv) neither it nor any of its Subsidiaries, except Subsidiaries shall (A) terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Company Compensation and Benefit Plans except as required by this Agreementany Laws or the terms of applicable collective bargaining agreements, (B) as set forth other than in Section 5.01(b) the ordinary and usual course of business consistent with past practice and the Company Disclosure ScheduleCompany’s compensation budget with respect to employees at an annual compensation level of less than $150,000, in connection with accelerating increase the vesting schedules compensation of the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted any employee or (C) in connection with terminating except as approved by the Options and the Stock PlansTransition Team, hire any employee at an annual compensation level expected to be more than $100,000;
(cv) except in the ordinary and usual course of business, neither it nor any of its Subsidiaries shall settle or compromise any material claims or litigation or modify, amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(vi) neither it nor any of its Subsidiaries shall make any material Tax election or file any material income Tax Return inconsistent with past practice or implement or adopt any change in its accounting principles or material accounting practices, in all cases other than as may be required by applicable Law or by Canadian GAAP;
(vii) neither it nor any of its Subsidiaries shall take any action or omit to take any action that it reasonably expects would cause any of its representations and warranties herein to become untrue in any material respect; and
(viii) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless the Company shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed) and except as otherwise expressly set forth in this Agreement or the corresponding subsection of Section 3.1(b) of the Parent Disclosure Letter):
(i) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and each of its Subsidiaries shall use its respective reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(ii) it shall not (A) issue, sell, transfer or pledge, dispose of or agree to sell, transfer or pledge, encumber any equity interest capital stock owned by it in any of its Subsidiaries Subsidiaries; (B) except as provided in Section 3.19, amend its Organizational Documents or alter through mergeramend, liquidation, reorganization, restructuring modify or terminate the Parent Rights Agreement; (C) other than in any other fashion the corporate structure or ownership case of any direct or indirect, wholly owned Subsidiary, split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than (x) dividends from its Subsidiariesdirect or indirect wholly owned Subsidiaries and (y) regular quarterly cash dividends in respect of Parent Common Stock, not in excess of $0.26 per share per quarter, with declaration and record dates consistent with past practice; or (iiE) amend repurchase, redeem or otherwise change its certificate of incorporation or bylaws acquire, or permit any of its Subsidiaries to amend its articles of incorporationpurchase or otherwise acquire, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit stock or any of its Subsidiaries to split, combine securities convertible into or reclassify exchangeable 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 by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(eiii) neither the Company it nor any of its Subsidiaries shall (iA) grant issue, sell, pledge, dispose of or agree to encumber any increase in any manner the compensation shares of, or benefits securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any current kind to acquire, any shares of its capital stock of any class or former directorany Parent Voting Debt (other than Parent Common Stock issuable under the Parent Stock Plans); (B) other than (x) as Parent deems reasonably necessary to obtain the consent, officer approval or employeeauthorization of any Governmental Entity in order to consummate the transactions contemplated by this Agreement and the Arrangement, except increases (y) products sold to customers in the ordinary and usual course of business (without limitation as to dollar amount) or (z) otherwise in the ordinary and usual course of business and not in an aggregate amount of more than $5,000,000, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries); (C) incur or modify any indebtedness other than (x) commercial paper, (y) indebtedness existing solely between Parent and its wholly owned Subsidiaries or between such wholly owned Subsidiaries or (z) indebtedness in an aggregate amount less than $30,000,000; provided, however, that prior to incurring any indebtedness, if practicable, Parent shall provide the Company with a reasonable right of consultation; provided, further, that the foregoing right of consultation shall not apply in the case of indebtedness in respect of commercial paper, letters of credit, guarantees or performance bonds or indebtedness existing solely between Parent and its wholly owned Subsidiaries or between such wholly owned Subsidiaries; (D) except as approved by the Transition Team, make or authorize or commit for any capital expenditures which, individually, is in excess of $1,000,000 or, in the aggregate, are in excess of $10,000,000; and (E) except as otherwise provided in clause (D) immediately above and other than raw materials, supplies and other inventory items acquired in the ordinary and usual course of business consistent with past practice, increases and bonuses expressly required under existing employment agreementsby any means, 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 make 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 Subsidiariesacquisitions of, or investments in stock of (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 interest in) or any agreement, arrangement, plan or policy for the benefit assets of any current or former director, officer or employee in existence on the date hereofother Person;
(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 it nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation(A) terminate, dissolutionestablish, mergeradopt, 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, make any new grants or materially amendawards under, modify amend or supplement otherwise modify, any Contract outside Parent Compensation and Benefit Plans except as required by any Laws or the terms of applicable collective bargaining agreements, (B) other than in the ordinary and usual course of business consistent with past practice under which and Parent’s compensation budget with respect to employees at an annual compensation level of less than $150,000, increase the Company compensation of any employee or (C) except as approved by the Transition Team, hire any employee at an annual compensation level expected to be more than $100,000;
(v) except in the ordinary and usual course of business, neither it nor 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)settle or compromise any material claims or litigation or modify, amend or (ii) waive, release, grant, assign, modify or transfer terminate any of its material Contracts or waive, release or assign any material rights or claims (whether such rights or claims arise under a Contract or otherwise)claims;
(jvi) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, authorize or shall make any capital expenditures (material Tax election or file any material income Tax Return inconsistent with past practice or implement or adopt any change in its accounting principles or material accounting practices, in all cases other than pursuant to commitments prior to the date hereof as may be required by applicable Law 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 aggregateU.S. GAAP;
(kvii) 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 neither 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 nor 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 that it reasonably expects 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 cause any of its Subsidiaries;representations and warranties herein to become untrue in any material respect; and
(pviii) 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 neither it nor any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment will authorize 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 into an agreement to do any of the foregoing.
Appears in 2 contracts
Sources: Combination Agreement (Donnelley R R & Sons Co), Combination Agreement (Moore Wallace Inc)
Interim Operations. Except 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 consent in writing, which consent shall not unreasonably be withheld or delayed, and except as otherwise expressly set forth in or contemplated by this Agreement or as set forth in described on Section 5.01 7.1 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 hereofSchedule):
(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 and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseesstrategic partners, advertiserscreditors, distributors lessors, employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) the Company shall not, and it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or 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)otherwise acquire, 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 into or exchangeable 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 its capital stock or other equity interests of the Company or stock;
(c) neither it nor any of its Subsidiaries shall (includingi) authorize, without limitationissue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind (including but not limited to any “rights or poison pill” agreement) to acquire, any shares of its capital stock of any class, or any Voting Debt or any other equity interests property or assets (other than shares of Company Common Stock and associated rights issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans); or (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, abandon, cancel, surrender or allow to lapse or expire or encumber any material property or material assets (including capital stock of any of its Subsidiaries) or business, except for such transactions conducted in the ordinary course 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’ business;
(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 neither it nor any of its Subsidiaries toshall restructure, declarerecapitalize, set aside reorganize or pay completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any dividends agreement or arrangement imposing material changes or restrictions on (whether in cash, stock the operation of its assets or other property), businesses or make any other distributions in respect of, adopt resolutions providing for or authorizing 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)foregoing;
(e) neither the Company it nor any of its Subsidiaries shall acquire (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 all or a substantial portion of the assets of or capital any stock or other equity interests of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, 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 thereof, or (ii) Subsidiaries organized outside any assets that are material, individually or in the aggregate, to the Company and any of its Subsidiaries, taken as a whole, except purchases of inventory and raw materials in the United States and its territorial possessionsordinary course of business (or as permitted by Section 7.1(g));
(gf) the Company shall not, and shall not permit neither it nor any of its Subsidiaries toshall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, (xii) incurissue, assume, be responsible for sell 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, amend any debt securities or options, warrants or calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of othersanother Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another person Person or enter into any arrangement having the economic effect of any of the foregoing; , (iii) make any loans, advances (other than routine advances to employees of the Company and its Subsidiaries in the ordinary course of business) or (y) sell, lease, license or subject to any Lien or otherwise dispose ofcapital contributions to, or agree to sellinvestment in, lease any other Person, other than the Company or subject to any Lien or otherwise dispose of, any of its properties direct or assets indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(g) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $25,000 individually or $50,000 500,000 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 for the Company and the Company’s its Subsidiaries, taken as a whole;
(h) neither the Company it nor any of its Subsidiaries shall adopt make any material changes in accounting methods, principles or put into effect practices, except insofar as may have been required by a plan change in GAAP or applicable Law or, except as so required, change any assumption underlying, or method of complete or partial liquidationcalculating, dissolutionany bad debt, merger, consolidation, restructuring, recapitalization contingency or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)reserve;
(i) except as set forth in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither it nor any of its Subsidiaries toshall, (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, enter into, renew, modify, amend, terminate, waive, delay the Company Disclosure Schedule by category) exercise of, release 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 assign any material respect with rights or claims under, any currently existing collective bargaining agreementCompany Material Contract or Company Lease; provided, memorandum or understandingthat, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company nothing herein 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 to (i) enter into any Contract of the date hereof, except as may be required as a result of a change type specified in applicable Law or in GAAP;
(nSection 5.5(a)(iii) to 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, extent such Contract would survive after the Effective Time or result modify or amend 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 manner adverse to the Company or any of its Subsidiaries than, any existing Contract of the terms of such Contract prior type specified in Section 5.5(a)(iii) or (ii) except to the making extent permitted by Section 7.2(a) of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not tothis Agreement, enter into, or materially renew, modify, amend, modify terminate, waive, delay the exercise of, or supplementrelease or assign any material rights or claims under, any Lease confidentiality, standstill or other Material Contract under similar agreement to which the costs or obligations of the Company or any of its Subsidiaries resulting from such amendmentis bound by or subject;
(j) neither it nor any of its Subsidiaries shall, modification except as required to comply with applicable Law, any express provision of this Agreement, or supplement would exceed $25,000 per annum individually agreements, plans or $100,000 per annum arrangements existing on the date hereof, (i) take any action with respect to, adopt, enter into, terminate or amend any employment, severance, change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan for all such amendmentsthe benefit or welfare of any current or former director, modifications and supplements officer, employee or consultant or any collective bargaining agreement, (ii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant (except for annual increases of salaries of Persons who are not officers in the aggregateordinary course of business that do not exceed 3.5%), (iii) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (iv) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (v) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder;
(k) neither it nor any of its Subsidiaries shall initiate, settle or compromise any litigation, claim, grievance, charge or proceeding involving any Intellectual Property or any matters reported as “Legal Proceedings” in any Company SEC Reports, or any other material litigation, claim, grievance, charge or proceeding (other than in connection with the enforcement of the Company’s rights under this Agreement);
(l) neither it nor any of its Subsidiaries shall make or rescind any material Tax election, amend any material Tax Return or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated in each case except in a manner consistent with past practice or as required by applicable Law;
(m) neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(qn) the Company shall not, and shall not permit neither it nor any of its Subsidiaries towill authorize any of, agree or commit commit, resolve or agree, in writing or otherwise, to do take, any of the foregoingforegoing actions; provided, however, that nothing contained in this Agreement shall give to Parent, directly or indirectly, rights to control or direct the operations of the Company prior to Closing. Prior to Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its and its Subsidiaries’ operations.
Appears in 2 contracts
Sources: Merger Agreement (Netopia Inc), Merger Agreement (Netopia Inc)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of on the Company Disclosure Schedule or as consented agreed 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 subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, conducted only in the ordinary course of business and the Company and its Subsidiaries 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 Subsidiariessubsidiaries, 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, including without limitation, limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of on the date hereof; , or (ii) repurchase, redeem or otherwise acquire acquire, or permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries 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 Subsidiariessubsidiaries); 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 material subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiariessubsidiaries, (ii) amend or otherwise change its certificate of incorporation the Company Certificate or bylaws Company Bylaws or permit any of its Subsidiaries subsidiaries to amend its articles certificate of incorporation, bylaws or bylaws equivalent organizational documents or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries 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 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 subsidiaries to the Company or with respect to other wholly owned Subsidiaries of the Company consistent with past practicescapital stock);
(e) neither the Company nor any of its Subsidiaries subsidiaries shall (i) grant or agree to any material increase in any manner the compensation or fringe benefits of of, or pay any bonus to, any current or former director, officer or employee, employee except increases in the ordinary course of business consistent with past practice, for increases and bonuses expressly contemplated by or 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 arrangements, and except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Option Plans, (ii) enter into any new or materially amend any existing Contractemployment, transaction, commitment severance or arrangement termination agreement with any current current, prospective or former director, officer, officer or employee or affiliate of the Company or any of its SubsidiariesCompany, 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 except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), become obligated under any Benefit Plan employee benefit plan that was not in existence on the date hereof or amend or amend, modify or terminate, or pay terminate any benefit that is not required by, any Benefit Plan Company 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, (iv) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock), except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Option Plans and except for the payment of the employer match under the Company’s 401(k) plan;
(f) the Company shall not, and shall not permit any of its Subsidiaries 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 all or substantially all 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 thereof, other than acquisitions purchases of assets in the ordinary course of business consistent with past practice and not in excess of $50,000 in any one instance or purchases made with $250,000 in 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 possessionsaggregate;
(g) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, sell, lease, license, mortgage or otherwise encumber or subject to any lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any lien or otherwise dispose of, any of its properties or assets other than (xi) properties or assets not in excess of $25,000 in one instance or $250,000 in the aggregate, (ii) inventory in the ordinary course of business consistent with past practice, (iii) nonexclusive licenses granted by the Company in the ordinary course of business to customers for such customers’ use of the Company’s products and services and (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 generally accepted accounting principles;
(h) the Company shall not, and shall not permit any of its subsidiaries to, incur, assume, be responsible for assume or pre-pay any Indebtedness, indebtedness for borrowed money or enter into any agreement to, to incur, assume, be responsible for assume or pre-pay any Indebtednessindebtedness for borrowed money, or guarantee, or agree to guarantee, any such Indebtedness indebtedness or Liabilities or obligations obligation 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 subsidiaries to, (i) enter intomake or forgive any loans, advances or capital contributions to, guarantees for the benefit of, or materially amendinvestments in, modify any person or supplement entity, other than loans between or among the Company and any Contract outside of its wholly-owned subsidiaries and cash advances to the Company’s or any such subsidiary’s employees for reimbursable travel and other business expenses incurred 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), 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;
(j) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, authorize assume, guarantee or make otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any capital expenditures (other than pursuant to commitments prior to Person, except for the date hereof or other planned capital expenditures in obligations of the ordinary course of business consistent with past practices disclosed in Section 5.01(j) subsidiaries 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 aggregatepermitted under this Agreement;
(k) the Company shall, and shall cause its Subsidiaries to, subsidiaries (i) shall 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 past practices and its Subsidiaries’ past practices, (ii) use reasonable best efforts shall 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 subsidiaries to, establish or acquire (i) materially amend any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any subsidiary other agreement or commitment to or relating to any labor union, than wholly-owned subsidiaries or (ii) subsidiaries organized outside of the United States and its territorial possessions;
(m) the Company shall not, and shall not permit any of its subsidiaries to, amend, modify or waive any term of any outstanding security of the Company or any of its subsidiaries, except (i) as required by this Agreement, (ii) in connection with accelerating the vesting schedules of the Options to the extent required by the Stock Option Plans or the agreements pursuant to which such Options were granted, and (iii) in connection with terminating the Options and the Stock Option Plans;
(n) the Company shall not, and shall not permit any of its subsidiaries to, 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 agreementunion, memorandum or understanding, grievance settlement or commitment, except, in each case, except as required by Law;
(mo) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, settle or compromise any pending or threatened suit, action, claim or litigation (except in the ordinary course of business), the settlement or compromise of which would result in payments by the Company in excess of $25,000;
(p) the Company shall not, and shall not permit any of its subsidiaries to, change any of the material accounting policies, practices or procedures (including tax material Tax accounting policies, practices and procedures) used by the Company or any of and its Subsidiaries subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAPUnited States generally accepted accounting principles;
(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 subsidiaries to, make or change any material tax election, make or change any material method of accounting with respect to Taxes except as may be required as a result of a change in applicable Law, settle or compromise any material tax liability or file any material amended Tax Return;
(r) the Company shall not, and shall not permit any of its subsidiaries to, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than (i) the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice or (ii) the payment of the Company’s Expenses (as defined herein), including the payment of the fees and expenses of the Special Committee and the costs, fees and expenses incurred by the Special Committee, which shall not exceed in the aggregate $5,000,000;
(s) the Company shall not, and shall not permit any of its subsidiaries to, transfer or license to any third party or otherwise amend or modify in any material respect any contract relating to Company Intellectual Property other than the grant in the ordinary course of business of non-exclusive licenses to customers in connection with the sale of Company Products;
(t) except as set forth in Section 5.01(t) of the Company Disclosure Schedule, the Company shall not have amended the Rights Plan in any manner without the prior consent of Parent; and
(u) 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 (Infousa Inc), Merger Agreement (Onesource Information Services Inc)
Interim Operations. Except as otherwise expressly contemplated by this Agreement or Agreement, as set forth in Section 5.01 of the Company Disclosure Schedule Schedule, as required by applicable Law, for Expenses incurred by the Company or as consented otherwise agreed 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 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 consistent with past practice and the Company and its Subsidiaries subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizations, keep available the services of their current officers and key employees and preserve their relationships with their material customers, suppliers, licensors, licensees, advertisers, distributors licensees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesdistributors;
(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 Subsidiariessubsidiaries, 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, including stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options or Warrants outstanding as of the date hereof; of this Agreement, (ii) repurchase, redeem or otherwise acquire acquire, or permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries subsidiaries (including, without limitation, including 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 subsidiaries) except for forfeitures of Common Shares issued pursuant to Restricted Stock Awards, (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 subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiariessubsidiaries, (iiiv) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries subsidiaries to amend its articles certificate of incorporation, or bylaws or similar organizational documents, (iiiv) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries subsidiaries to split, combine or reclassify any shares of its capital stockstock or (vi) amend or otherwise change the terms of any Warrants;
(dc) 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, subsidiaries to (i) 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 to the Company by direct or indirect wholly wholly-owned Subsidiaries to the Company or to other wholly owned Subsidiaries subsidiaries of the Company consistent with past practicesCompany);
, (eii) neither the Company nor any of its Subsidiaries shall (i) grant acquire or agree to any increase in any manner acquire, including by merging or consolidating with, or purchasing the compensation assets (except raw materials, inventory or benefits of any current or former director, officer or employee, except increases supplies 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 or (iii) enter into, amend, modify or supplement any Contract, transaction, commitment or arrangement with any current or former officer, director, employee or other than acquisitions or purchases made with the prior written consent affiliate of the Parent Company or any of its subsidiaries;
(each an “Approved Acquisition”d) neither the Company nor any of its subsidiaries shall (i) grant or agree to any increase in any manner the compensation, severance benefits or fringe benefits of, or pay any severance or bonus to, any current or former director, officer or employee except for payments made in accordance with Sections 5.11(b) and other than non-taxable transfers by or among 5.11(c) hereof, (ii) except as provided in Section 5.11(d) of this Agreement and Section 5.11(d)(iii) of the Company Disclosure Schedule, enter into any new or amend any existing employment, consulting, severance, termination, change-of-control or indemnification Contract with any director, officer or employee of the Company, (iii) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including Section 2.02 hereof), become obligated under any Benefit Plan that was not in existence on the date of this Agreement or amend, modify or terminate any Benefit Plan or other employee benefit plan or any Contract, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date of this Agreement or (iv) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including Section 2.02 hereof), pay any benefit not required by any plan or arrangement as in effect as of the date of this Agreement (including the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise contemplated by this Agreement), except in connection with terminating the Options and the Stock Plans pursuant to Section 2.02 and except for the payment of the employer match under the Company’s Subsidiaries; or (y401(k) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionsplan;
(ge) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets that are material, individually or in the aggregate, to the Company and its subsidiaries, taken as a whole, other than sales of inventory and other assets in the ordinary course of business consistent with past practice;
(xf) except pursuant to a Material Contract, the Company shall not, and shall not permit any of its subsidiaries to (i) incur, assume, be responsible for or pre-pay pay, discharge or satisfy any Indebtedness, Indebtedness or enter into any agreement to, Contract to incur, assume, be responsible for or pre-pay pay, discharge or satisfy any Indebtedness, or guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations obligation of another personPerson, or 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, guarantee any debt securities of others, enter into any “keep well” or other agreement Contract to maintain any financial statement condition of another person Person or enter into any Contract or arrangement having the economic effect of any of the foregoing; , or (ii) make or forgive any loans, advances or capital contributions to, guarantees for the benefit of, or investments in, any Person, other than (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 loans between or among the Company and any of its wholly-owned subsidiaries and (z) cash advances to the Company’s Subsidiariesor its subsidiary’s employees for reimbursable travel and other business expenses incurred in the ordinary course of business;
(hg) neither the Company nor any of its Subsidiaries 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)subsidiaries;
(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);
(jh) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, authorize (i) enter into, or make amend, modify, elect not to renew or terminate or waive, release or assign any capital expenditures rights under any Material Contract in any material respect in a manner which is adverse to the Company or its subsidiaries (other than pursuant entering into a new Material Contract to commitments prior to replace a Material Contract which has terminated without a breach thereunder by its terms, which new Material Contract is consistent with the date hereof or other planned capital expenditures terms of the terminated Material Contract);
(i) except for customer Contracts entered into in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of practice, the Company Disclosure Schedule by category) shall not, and shall not permit its subsidiaries to, renegotiate or make enter into any commitments with respect to capital expenditures new material Contract, license, arrangement or other planned capital expenditures other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregaterelating to any Proprietary Rights;
(kj) the Company shall, and shall cause its Subsidiaries to, subsidiaries (i) shall comply in all material respects with their obligations under the Material Contracts as such obligations become due, (ii) shall 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 past practices and its Subsidiaries’ past practices, (iiiii) use reasonable best efforts shall 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;
(lk) 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 subsidiaries to, make any capital expenditure or commitments not consistent with the expenditures in the Company’s capital budget for 2008 provided to Parent;
(il) materially amend the Company shall not, and shall not permit any currently existing labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment of its subsidiaries 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 make any material respect changes in their respective standardized or other sales terms and conditions, except in the ordinary course of business consistent with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Lawpast practice;
(m) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, change enter into any settlement, conciliation or similar Contract with any Governmental Authority or that requires payment of any material consideration after the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company or any execution date 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;
(n) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, take(i) settle or compromise any pending or threatened Claim, except with respect to the settlement 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 compromise of any time prior tosuch Claim where the full amount paid or to be paid is covered by insurance coverage maintained by the Company, the Effective Time or result in (ii) change any of the conditions set forth accounting policies, practices or procedures (including material Tax accounting methods, periods, policies, practices or procedures) or any of its methods of reporting income, deductions or other items for financial accounting purposes, except as may be required as a result of a change in Article 6 not being satisfiedGAAP enacted after the date of this Agreement, or omit(iii) except in the ordinary course of business and in a manner consistent with past practice, make, change or rescind any material Tax election, enter into any material closing agreement relating to Taxes, settle or compromise any material Tax liability, audit, claim, proceeding or assessment, file any material amended Tax Return, surrender any right to claim a refund of material Taxes, or agree consent to omit, any extension or waiver of the limitation period applicable to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time Tax liability or to prevent any such condition from not being satisfiedassessment;
(o) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, make or change allow any material tax election Company Proprietary Rights to become abandoned or change an annual accounting period with respect expired for failure to Taxes, file any amended Tax Return, enter into any closing agreement, settle make required filings 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 aggregatepay required fees; and
(qp) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, agree or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Bard C R Inc /Nj/), Merger Agreement (Specialized Health Products International Inc)
Interim Operations. Except as otherwise expressly contemplated by this Agreement or as set forth in Section 5.01 of on the Company Disclosure Schedule or as consented agreed to in writing by Parent, which agreement, in the case of clauses (h), (i), (j) or (l) (or, to the extent relating to any of the foregoing clauses, clause (q)), shall not be unreasonably withheld or delayed, 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 subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, conducted only in the ordinary course of business and the Company and its Subsidiaries 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 Subsidiariessubsidiaries, 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, including without limitation, 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 acquire, or permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries 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 Subsidiariessubsidiaries); 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 subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiariessubsidiaries, (iiiv) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries subsidiaries to amend its articles certificate of incorporation, or bylaws or equivalent organizational documents or (iiiv) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries subsidiaries to split, combine or reclassify any shares of its capital stock;
(dc) 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, subsidiaries to (i) 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 subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practicesCompany);
(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 thereof, (iii) authorize or make any capital expenditures in excess of $100,000 in the aggregate (other than acquisitions pursuant to commitments prior to the date hereof disclosed in Section 5.01(c) of the Company Disclosure Schedule) or purchases made (iv) enter into, amend, modify or supplement any agreement, transaction, commitment or arrangement with any current or former officer, director, employee or other affiliate of the Company or any of its subsidiaries (or any affiliate of the foregoing) other than as contemplated by this Agreement;
(d) neither the Company nor any of its subsidiaries shall (i) grant or agree to any increase in any manner the compensation or fringe benefits of, or pay any bonus to, any current or former director, officer or employee except (A) for increases and bonuses expressly contemplated by or required under existing employment agreements or bonus plans listed in Section 5.01(d) of the Company Disclosure Schedule, (B) for increases in compensation to employees in the ordinary course of business consistent with past practice (but in no event greater than 5% for any individual employee whose reasonably anticipated annual compensation is greater than $150,000 or 10% for any individual employee whose reasonably anticipated annual compensation is equal to or less than $150,000), (C) in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans and (D) as set forth on Section 5.01(d) of the Company Disclosure Schedule, (ii) hire any employee except (1) the replacement of any current employee of the Company or any of its subsidiaries whose employment with the prior written consent Company or any of its subsidiaries is terminated for any reason (with such replacement employee receiving substantially similar compensation and benefits as such terminated employee) and (2) any new employee (other than replacement employees) whose reasonably anticipated annual base salary and bonus will not exceed $100,000 individually or $500,000 in the aggregate among all such new employees, (iii) except as may be required to comply with applicable Law and except 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, modify or terminate 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 (iv) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof), pay any benefit not required by any plan or arrangement as in effect as of the Parent date hereof (each an “Approved Acquisition”) and including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other than non-taxable transfers by or among equity interests of the Company or any of its subsidiaries), except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans and except for the payment of the employer match under the Company’s Subsidiaries; or (y401(k) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessionsplan;
(ge) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of (xincluding through any sale-leaseback or similar transaction), any of its properties or assets other than (i) pursuant to existing contracts and commitments described in Section 5.01(e) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets), (iii) inventory in the ordinary course of business consistent with past practice, (iv) licenses granted by the Company in the ordinary course of business to customers for such customers’ use of the Company’s products and services and (v) Permitted Liens;
(f) the Company shall not, and shall not permit any of its subsidiaries to (i) incur, assume, be responsible for assume or pre-pay any Indebtedness, indebtedness for borrowed money or enter into any agreement to, to incur, assume, be responsible for assume or pre-pay any Indebtednessindebtedness for borrowed money, or guarantee, or agree to guarantee, any such Indebtedness indebtedness or Liabilities or obligations obligation of another person, or 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, 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 make or assets (forgive any loans, advances or immaterial portions of properties capital contributions to, guarantees for the benefit of, or assets described in Section 5.01(g) of the Company Disclosure Schedule)investments in, (iii) Permitted Liensany person or entity, (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 loans between or among the Company and any of its wholly-owned subsidiaries and cash advances to the Company’s Subsidiariesor any such subsidiary’s employees for reimbursable travel and other business expenses incurred in the ordinary course of business consistent with past practice or (iii) assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except for the obligations of the subsidiaries of the Company permitted under this Agreement;
(hg) neither the Company nor any of its Subsidiaries 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 subsidiaries (other than any transaction specifically contemplated by this AgreementAgreement or as permitted by Section 5.10);
(ih) 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 subsidiaries to, (i) enter into, or materially amend, modify or supplement any Material 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 assign or transfer any of its material rights or claims (whether such rights or claims arise under a Material Contract or otherwise);
(ji) except for customer contracts entered into in the ordinary course of business, the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, authorize renegotiate or make enter into any capital expenditures (other than pursuant new license, agreement or arrangement relating 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 aggregateProprietary Rights;
(kj) the Company shall, and shall cause its Subsidiaries to, subsidiaries (i) shall comply with their obligations under the Material Contracts as such obligations become due, (ii) shall 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 past practices and its Subsidiaries’ past practices, (iiiii) shall use commercially reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated;
(k) the Company shall not, and shall not permit any of its subsidiaries to, (iiii) establish or acquire any subsidiary other than wholly-owned subsidiaries or (ii) amend, modify or waive any term of any outstanding security of the Company or any of its subsidiaries, except (1) in connection with accelerating the vesting schedules of the Options or (2) in connection with terminating the Options and the Stock Plans;
(l) the Company shall, and shall cause its subsidiaries to, (i) maintain all Leased Real Property any real property to which the Company and any of its subsidiaries have ownership or a leasehold interest (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respectscondition, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Lienscondemnation, subject to the expiration of real property leases in accordance with their terms, and (ivii) pay, prior to the imposition of any Lien or material penalty timely pay all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them and (iii) timely comply in good faith;
(l) except as set forth in Section 5.01(l) all material respects with the terms and provisions of the Company Disclosure Scheduleall leases, the Company shall not, contracts 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 agreements 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 Lawsuch real property and the use and operation thereof;
(m) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, (i) settle or compromise any pending or threatened suit, action, claim or litigation, except with respect to the settlement or compromise of any such matter which does not involve equitable or injunctive relief and does not obligate the Company and its subsidiaries to make aggregate cash payments (excluding amounts covered by insurance) exceeding $300,000, (ii) change any of the material accounting policies, practices or procedures (including material tax accounting policies, practices and procedures) used by the Company or any of and its Subsidiaries subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAPU.S. generally accepted accounting principles, (iii) revalue in any material respect any of its assets (including, without limitation, writing down or writing off any notes or accounts receivable in any material manner), except as required by U.S. generally accepted accounting principles or (iv) make or change any material tax election, make or change any material method of accounting with respect to Taxes except as may be required as a result of applicable Law, settle or compromise any material Tax liability or file any material amended Tax Return that would increase the tax liability of the Company or its subsidiaries after the Effective Time;
(n) the Company shall not, and shall not permit any of its Subsidiaries 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 to the Merger 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) except as otherwise permitted by Section 5.01(m), the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, make pay, discharge or change satisfy 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 obligation (absolute, accrued, asserted or future Tax benefit unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected on or reserved in the financial statements of the Company or any incurred in the ordinary course of its Subsidiariesbusiness and consistent with past practice;
(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 permit any of its Subsidiaries thansubsidiaries to, incur any Expenses other than those that are reasonably necessary to consummate the Merger in accordance with the terms of such Contract prior set forth in this Agreement or to defend any lawsuits with respect to, arising from or related 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 aggregateTransactions; and
(q) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, agree or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Datastream Systems Inc), Merger Agreement (Magellan Holdings, 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 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 (unless Parent shall otherwise approve in writing and except as set forth in Schedule 7.1 hereof or until termination of as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(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 and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially respective reasonable best efforts efforts, consistent with the limitations of this Article VII, to preserve its business organization substantially intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseesstrategic partners, advertiserscreditors, distributors lessors, employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) the Company shall not, and it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws; (iii) split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries; or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or 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)otherwise acquire, 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 into or exchangeable 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 its capital stock or other equity interests of the Company or stock;
(c) neither it nor any of its Subsidiaries shall (includingi) issue, without limitationsell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other equity interests property or assets (other than shares of Company Common Stock issuable pursuant to options outstanding on the date hereof under the Company or any of its SubsidiariesStock Plans); or (iiiii) amendtransfer, modify or waive any term of any outstanding security of the Company or any of its Subsidiarieslease, except (A) as required by this Agreementlicense, (B) as set forth in Section 5.01(b) of the Company Disclosure Scheduleguarantee, 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 mortgage, pledge, dispose of, abandon, cancel, surrender or agree allow to sell, transfer lapse or pledge, expire or encumber any equity interest owned by it in any of its Subsidiaries material property or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership material assets (including capital stock of any of its Subsidiaries, (ii) amend or otherwise change its certificate business other than licenses of incorporation or bylaws or permit any Company Products entered into in the ordinary course 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 stockbusiness;
(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 neither it nor any of its Subsidiaries toshall restructure, declarerecapitalize, set aside reorganize or pay completely or partially liquidate or adopt a plan of complete or partial liquidation or otherwise enter into any dividends agreement or arrangement imposing material changes or restrictions on (whether in cashthe operation of its assets, stock product lines or other property)businesses, or make any other distributions in respect ofits interests therein, or adopt resolutions providing for or authorizing 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)foregoing;
(e) neither the Company it nor any of its Subsidiaries shall acquire (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 all or a substantial portion of the assets of or capital any stock or other equity interests of, or by any other manner, any business or any corporation, partnership, joint venture, limited liability company, 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 thereof, or (ii) any material assets or businesses, except purchases of inventory and raw materials in the ordinary course of business;
(f) neither it nor any of its Subsidiaries organized outside shall adopt or implement any stockholder rights plan, “poison pill” anti-takeover plan or other similar plan, device or arrangement that, in each case, is applicable to Parent or any of its Affiliates, the Agreement or any of the United States and its territorial possessionstransactions contemplated by this Agreement;
(g) the Company shall not, and shall not permit neither it nor any of its Subsidiaries toshall (i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person (other than pursuant to equipment lease borrowings in the ordinary course of business), (xii) incurissue, assume, be responsible for sell 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, amend any debt securities or options, warrants or calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of othersanother Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another person Person or enter into any arrangement having the economic effect of any of the foregoing; , (iii) make any loans, advances (other than routine travel advances to employees of the Company and its Subsidiaries in the ordinary course of business, not exceeding $10,000 for any individual employee for any single trip and not exceeding $30,000 in the aggregate) or (y) sell, lease, license or subject to any Lien or otherwise dispose ofcapital contributions to, or agree to sellinvestment in, lease any other Person, other than the Company or subject to any Lien or otherwise dispose of, any of its properties direct or assets indirect wholly owned Subsidiaries, or (iv) other than in the ordinary course of business, enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its Subsidiaries against fluctuations in commodities prices or exchange rates;
(h) neither it nor any of its Subsidiaries shall make any capital expenditures or other expenditures with respect to property, plant or equipment in excess of $25,000 individually or $50,000 100,000 in the aggregate for the Company and its Subsidiaries, taken as a whole, other than (i) pursuant as set forth in the Company’s budget for capital expenditures previously made available to existing contracts and commitments described Parent or the specific capital expenditures disclosed in Section 5.01(g7.1(h) 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;
(hi) neither the Company it nor any of its Subsidiaries shall adopt make any material changes in accounting methods, principles or put into effect practices, except insofar as may have been required by a plan change in GAAP or, except as so required, change any assumption underlying, or method of complete or partial liquidationcalculating, dissolutionany bad debt, merger, consolidation, restructuring, recapitalization contingency 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)reserve;
(j) the Company shall not, and shall not permit neither it nor any of its Subsidiaries toshall, authorize or make any capital expenditures (other than pursuant to commitments prior to the date hereof or other planned capital expenditures except in the ordinary course of business consistent with past practices disclosed in Section 5.01(j) of practice, enter into, renew, modify, amend, terminate, waive, delay the Company Disclosure Schedule by category) exercise of, release 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 assign any material respect with rights or claims under, any currently existing collective bargaining agreementCompany Material Contract; provided, memorandum or understandinghowever, grievance settlement or commitment, except, in each case, as required by Law;
(m) the Company that nothing herein 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 to (1) enter into any Contract of the date hereof, except as may be required as a result of a change type specified in applicable Law Section 5.5(a)(iii) or in GAAP;
(nxiii) (excluding Section 5.5(a)(xiii)(D) solely with respect to Company Products) to 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, extent such Contract would survive after the Effective Time or result modify or amend 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 manner adverse to the Company or any of its Subsidiaries thanany existing Contract of the type specified in Section 5.5(a)(iii) or (xiii), the terms of such Contract prior or (2) except to the making extent permitted by Section 7.2(a) of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not tothis Agreement, enter into, or materially renew, modify, amend, modify terminate, waive delay the exercise of, or supplementrelease or assign any material rights or claims under, any Lease confidentiality, standstill or similar agreement to which the Company or any of its Subsidiaries is bound by or subject;
(k) neither it nor any of its Subsidiaries shall, except as required to comply with applicable Law or agreements, plans or arrangements existing on the date hereof, (i) take any action with respect to, adopt, enter into, terminate or amend any employment (whether at will or otherwise), severance, change in control, retirement, retention, welfare, incentive or similar agreement, arrangement or benefit plan for the benefit or welfare of any current or former director, officer, employee or consultant or any collective bargaining agreement, (ii) increase in any respect the compensation or fringe benefits of, or pay any bonus to, any director, officer, employee or consultant, (iii) amend or accelerate the payment, right to payment or vesting of any compensation or benefits, including any outstanding options or restricted stock awards, (iv) pay any benefit not provided for as of the date of this Agreement under any Company Benefit Plan, (v) grant any awards under any bonus, incentive, performance or other Material Contract compensation plan or arrangement or benefit plan, including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder, except for option awards to purchase Company Common Stock that the Company expects to grant to certain new hires in the ordinary course of business as specifically set forth in Section 7.1(k) of the Company Disclosure Schedule which Schedule includes the maximum number of options issuable to such new hires or (vi) take any action to fund or in any other way secure the payment of compensation or benefits under which any Company Benefit Plan;
(l) except as otherwise contemplated by this Section 7.1, neither it nor any of its Subsidiaries shall make any written or oral communications to the costs directors, officers or obligations employees of the Company or any of its Subsidiaries resulting from pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, unless the Company provides Parent with a copy of the intended communication, Parent has a reasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in providing any such amendmentmutually agreeable communication;
(m) neither it nor any of its Subsidiaries shall initiate, modification settle or supplement would exceed $25,000 per annum individually compromise any material litigation, claim, grievance, charge or $100,000 per annum for all such amendmentsproceeding (other than as set forth in Section 7.1(m) of the Company Disclosure Schedule or in connection with the enforcement of the Company’s rights under this Agreement);
(n) neither it nor any of its Subsidiaries shall make or rescind any Tax election, modifications and supplements amend any Tax Return, settle or otherwise finally resolve any material tax controversy, or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the aggregateordinary and usual course of business;
(o) neither it nor any of its Subsidiaries shall take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; and
(qp) the Company shall not, and shall not permit neither it nor any of its Subsidiaries towill authorize any of, agree or commit commit, resolve or agree, in writing or otherwise, to do take, any of the foregoingforegoing actions.
Appears in 2 contracts
Sources: Merger Agreement (Computer Associates International Inc), Merger Agreement (Niku 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 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 (unless Parent shall otherwise consent in writing (any request for consent to be considered by Parent in good faith and responded to within one (1) Business Day) or until termination of except as otherwise required by applicable Law or with respect to the transactions and commitments contemplated by this Agreement in accordance with Article 7 hereof):
(aand the Arrangement) that the business and operations of the Company and its Subsidiaries shall be conductedconducted in the ordinary and usual course, and and, to the books and records of extent consistent therewith, the Company and its Subsidiaries shall be maintained, only in the ordinary course each of business and the Company and its Subsidiaries shall use their commercially its respective reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, distributors, creditors, licensors, licensees, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve associates. Without limiting the goodwill generality of their respective businesses;
(b) the foregoing, 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 nototherwise consent in writing (any request for consent to be considered by Parent in good faith and responded to within one (1) Business Day) or except as otherwise required by applicable Law or with respect to the transactions and commitments contemplated by this Agreement and the Arrangement or unless disclosed in Section 3.1(a) of the Company Disclosure Letter), and shall not permit neither the Company nor any of its Subsidiaries to, shall:
(i) (A) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its shares or other equity interests, (B) split, combine or reclassify any of its shares or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for issuanceits shares or (C) purchase, redeem or otherwise acquire any of its shares or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, except for purchases, redemptions or other acquisitions of its shares or other securities required under the terms of any plans, arrangements or Contracts existing on the date hereof between the Company or any of its Subsidiaries and any director, officer, employee or consultant of the Company or any of its Subsidiaries;
(ii) (A) issue, deliver, sell or agree or commit to issuesell, sell or deliver (whether through the issuance or granting grant, pledge, dispose 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 Subsidiariesshares, any other voting securities or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such sharesshares or voting securities, securities or any rights, warrants or options to acquire any such convertible securities or any (other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances than the issuance of Company Common Shares upon the exercise of Company Options outstanding as of on the date hereof or pursuant to Company RSUs outstanding on the date hereof; (ii) repurchase, redeem or otherwise acquire in each case in accordance with their terms on the date hereof without any shares of action by the capital stock or other equity interests Company to accelerate the vesting of the Company Options or Company RSUs), or any of its Subsidiaries (including“phantom” stock, without limitation“phantom” stock rights, securities exchangeable forstock appreciation rights or stock based performance units, 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 (iiiB) amend, modify or waive amend 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 adopt or reclassify propose any shares of change to its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockOrganizational Documents;
(div) 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 directly 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 indirectly acquire or agree to acquire, including, without limitation, acquire (i) by merging or consolidating with, or by purchasing the assets or capital stock or other equity interests of, or by any other manner, any Person or division, business or equity interest of 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 Person or (ii) Subsidiaries organized outside any assets which, individually have a purchase price in excess of $15,000,000 or, in the United States aggregate, have a purchase price in excess of $15,000,000, except for capital expenditures (which are subject to paragraph (viii) below) and its territorial possessionspurchases of raw materials, supplies and other inventory items in the ordinary and usual course of business;
(gv) other than products sold to customers in the Company shall notordinary and usual course of business (without limitation as to dollar amount) or otherwise in the ordinary and usual course of business and not in an aggregate amount of more than $5,000,000, and shall not permit transfer, lease, license, guarantee, sell, dispose of or subject to any Lien any other property or assets (including share capital of any of its Subsidiaries to, Subsidiaries);
(xvi) incur, assume, be responsible incur or modify any indebtedness for borrowed money 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, 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 calls, options, warrants or calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of othersanother Person, enter into any “keep well” or other agreement to maintain any financial statement condition of another person Person or enter into any arrangement having the economic effect of any of the foregoing; , other than (A) indebtedness existing solely between the Company and its wholly owned Subsidiaries or between such wholly owned Subsidiaries or (B) indebtedness in an aggregate amount less than $2,500,000;
(vii) make any loan, advance, or capital contribution to or investment in any Person other than loans in the ordinary and usual course of business and advances or capital contributions to or investments in any wholly owned Subsidiary in the ordinary and usual course of business;
(viii) make or authorize or commit for any capital expenditures or any obligations or liabilities in respect thereof;
(ix) (A) pay, discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction in the ordinary and usual course of business or in accordance with their terms, of liabilities disclosed, reflected or reserved against in the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company Reports (for amounts not in excess of such reserves) or incurred since the date of such financial statements in the ordinary and usual course of business, (B) cancel any indebtedness, (C) waive or assign any claims or rights of substantial value or (D) except as permitted by Section 3.2, waive any benefits of, fail to enforce, or agree to modify in any respect, or consent to any matter with respect to which consent is required under (x) any standstill or similar agreements to which the Company or any of its Subsidiaries is a party or (y) sellother than in the ordinary and usual course of business consistent with past practice, lease, license any confidentiality or subject similar agreements to any Lien which the Company or otherwise dispose of, or agree to sell, lease or subject to any Lien or otherwise dispose of, any of its properties Subsidiaries is a party;
(x) materially modify, materially amend or assets terminate any Company Material Contract, waive, release or assign any material rights or claims thereunder, or enter into any Contract (other than purchase orders in the ordinary and usual course of business), that if it had been entered in prior to the date hereof, would be a Company Material Contract;
(xi) sell, transfer or out-license to any Person or otherwise extend, amend, modify, abandon, or make part of the public domain any rights to the material Intellectual Property Rights owned by the Company or its Subsidiaries, other than pursuant to (i) confidentiality agreements entered into in the ordinary and usual course of business containing customary terms that do not impose any obligations on the Company or its Subsidiaries other than those relating to the treatment of confidential information and (ii) any Contracts currently in place (that have been disclosed in writing to Parent prior to the date hereof) in accordance with their terms as of the date hereof;
(xii) enter into any Contract that both (A) either provides for aggregate payments to or receipt by the Company in excess of $25,000 individually 2,500,000, relates to a material product or $50,000 in the aggregate other than (i) pursuant to existing contracts and commitments described in Section 5.01(g) material Intellectual Property Rights of the Company Disclosure Scheduleor is otherwise material to the Company, and (iiB) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) contains any restriction on the ability 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 to assign its rights, interests or obligations thereunder, unless such restriction would not preclude any assignment to Parent or any of its Subsidiaries following the consummation of the Arrangement;
(xiii) except as required to ensure that any Employee Plan is not then out of compliance with applicable Law or to comply with any Company Compensation and Benefit Plan entered into prior to the date hereof, (A) adopt, enter into, terminate or amend any collective bargaining agreement or any Employee Plan, (B) increase in any manner the compensation, bonus or fringe or other benefits of, or pay any bonus of any kind or amount whatsoever to, any current or former director, officer, employee or consultant, (C) pay any benefit or amount not required under any Employee Plan, (D) grant or pay any severance or termination pay or increase in any manner the severance or termination pay of any current or former director, officer, employee or consultant of the Company or any of its Subsidiaries, (E) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement, or any Employee Plan (including the grant of Company Equity Awards, “phantom” stock, “phantom” stock rights, stock based or stock related awards, performance units or the removal of existing restrictions in any Employee Plan or awards made thereunder), (F) amend or modify any Company Equity Awards, (G) take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, Contract or arrangement or Employee Plan, (H) take any action to accelerate the vesting or payment of any compensation or benefit under any Employee Plan or (I) materially change any actuarial or other assumption used to calculate funding obligations with respect to any Company Pension Plan or change the manner in which contributions to any Company Pension Plan are made or the basis on which such contributions are determined;
(xiv) except as required by Canadian GAAP or, for purposes of any reconciliation to US GAAP, by US GAAP, make any change in accounting methods, principles or practices, or write up, write down or write off the book value of any assets, individually or in the aggregate;
(xv) make any material Tax election or settle or compromise any material liability for Taxes, change any Tax accounting period or any method of Tax accounting (except as required by applicable Law), file any amended material Tax Return, enter into any closing agreement relating to any material Tax, surrender any right to claim a material Tax refund, or consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(xvi) adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, or recapitalization or other reorganization a plan of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)reorganization;
(ixvii) 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 that could 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 IV 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
(oxviii) the Company shall not, and shall not permit any of its Subsidiaries to, make authorize 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 agreement or compromise otherwise 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) Parent covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless the Company shall otherwise consent in writing and except as otherwise required by applicable Law or as expressly set forth in this Agreement or the corresponding subsection of Section 3.1(b) of the Parent Disclosure Letter), neither Parent nor any of its Subsidiaries shall:
(i) declare, set aside or pay any dividends (other than intercompany dividends) on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
(ii) in the case of Parent only, adopt or propose any change to its Organizational Documents;
(iii) adopt a plan of complete or partial liquidation, dissolution, or recapitalization or a plan of reorganization;
(iv) take any action that would, or that could reasonably be expected to, result in any of the conditions set forth in Article IV not being satisfied; or
(v) authorize or enter into any agreement or otherwise make any commitment 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 Prior to the Closing Date, unless the Company Disclosure Schedule or as has consented to in writing by Parentthereto, 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):which consent will not be unreasonably withheld, Assignor:
(ai) the business shall conduct its operations according to its usual, regular 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 in substantially the Company and its Subsidiaries same manner as heretofore conducted;
(ii) shall use their commercially its reasonable best efforts to preserve intact their current its business organizations, keep available the services of their current officers organization and employees goodwill 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 businessesit;
(biii) shall promptly notify the Company shall not, and shall not permit of (x) any of material change in its Subsidiaries to, condition (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 financial or otherwise), pledge business, properties, assets, liabilities or otherwise encumber the normal course of its business or of its properties, (y) any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or (z) the breach of any representation or warranty contained herein;
(iv) shall not issue any shares of its capital stock or securities;
(v) shall not (w) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the capital stock obligations of any of its Subsidiariesother individual, corporation or other entity, (x) make any loans or advances to any other securities or any securities convertible or exercisable intoperson, or any rightsexcept in each case in the ordinary course of business, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (y) acquire (including, without limitation, for cash or shares of stock, by merger, consolidation, or acquisition of stock appreciation rights or phantom interests)assets) any interest in any corporation, partnership or other business organization or division thereof or any assets, or make any investment either by purchase of stock or securities, contributions of capital or property transfer or, except for issuances in the ordinary course of Common Shares upon the exercise business, consistent with past practice, purchase any property or assets of Options outstanding as any other person or (z) effect a sale or other disposition of any of the date hereof; (ii) repurchase, redeem Assets or otherwise acquire any shares of allow 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 creation of any kind to acquire, capital stock lien 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 Plansencumbrance thereon;
(cvi) the Company shall not (ix) 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), dividend or make any other distributions in distribution or payment with respect ofto any shares of its capital stock or other ownership interests or (y) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or make any commitment for any such action;
(vii) shall not amend or otherwise change its articles of incorporation or bylaws or equivalent organizational documents
(viii) shall not increase the compensation payable or to become payable to its officers or employees, pay any employment related or other bonus to its shareholder, or, except as presently bound to do, grant any severance or termination pay to, or enter into any employment or severance agreement with, any of its capital stock (except for dividends paid by direct directors, officers or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices)employees;
(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 take 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 action other than in the ordinary course of business and in a manner consistent with past practices in excess of $500,000 in the aggregate;practice with respect to accounting policies or procedures; and
(kx) 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, untrue or incorrect 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 foregoingClosing Date.
Appears in 1 contract
Sources: Asset Purchase Agreement (Ultimate Software 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 (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 (unless Keystone shall otherwise approve in writing, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement, the Stock Option Agreement, the Company Disclosure Letter or as required by applicable Law):
(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 the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially all reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) the Company shall not, and it shall not (A) amend its certificate of incorporation or by-laws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock; or (D) repurchase, redeem or otherwise acquire, or 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)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the any securities convertible into or exchangeable or exercisable for any shares of its capital stock of stock;
(iii) neither it nor any of its SubsidiariesSubsidiaries shall knowingly take any action that would prevent the merger from qualifying as a tax-free "reorganization" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties herein to become untrue in any material respect;
(iv) neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans or Stock Plans or increase the salary, wage, bonus or other securities compensation of any directors, officers or employees or take any action which would result in an acceleration of benefits or vesting under the Stock Plans as a result of the consummation of the Merger which would not otherwise occur pursuant to the terms and conditions of such benefits or Stock Plan grants, awards or options as in effect on the date hereof;
(v) neither it nor any of its Subsidiaries shall issue any preferred stock or incur any indebtedness for borrowed money (other than indebtedness in the ordinary course of business consistent with past practice, indebtedness incurred solely for the purpose of funding the Escrow Account or the replacement or refinancing of existing short-term indebtedness); or guarantee any such indebtedness;
(vi) neither it nor any of its Subsidiaries shall make any capital expenditures in an aggregate amount in excess of the aggregate amount reflected in the Company's capital expenditure budget heretofore delivered to Keystone;
(vii) except as contemplated by Section 6.1(a)(iv), neither the Company nor any of its Subsidiaries shall issue, deliver, sell, or encumber shares of any class of its common stock or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such sharesshares except the option granted under the Stock Option Agreement, securities options and performance share programs outstanding on the date hereof under the Stock Plans, and shares issuable pursuant to such options and performance share programs;
(viii) neither it nor any of its Subsidiaries shall acquire any business, whether by merger, consolidation, purchase of property or convertible securities assets or otherwise;
(ix) neither it nor any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon its Subsidiaries shall agree prior to the exercise of Options outstanding as Effective Time to do any of the foregoing after the Effective Time.
(b) Keystone covenants and agrees as to itself and its Subsidiaries that, after the date hereofhereof and prior to the Effective Time (unless the Company shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement or in the Keystone Disclosure Letter or as required by applicable Law):
(i) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use all reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(ii) it shall not (A) amend its certificate of incorporation or by-laws in any manner that would prohibit or hinder, impede or delay in any material respect the Merger or the consummation of the transactions contemplated hereby; (iiB) declare, set aside or pay any dividend or other distribution payable in cash or property in respect of any capital stock; or (C) 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 incorporationpurchase or otherwise acquire, except in open market transactions or bylaws or (iii) splitin connection with the Keystone Stock Plans, combine or reclassify any shares of its capital stock, and shall not permit stock or any of its Subsidiaries to split, combine securities convertible into or reclassify exchangeable 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 by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices);
(eiii) neither the Company it nor any of its Subsidiaries shall (i) grant or agree to knowingly take any increase in any manner action that would prevent the compensation or benefits Merger from qualifying as a tax-free "reorganization" within the meaning 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(e368(a) 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 Code or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or that would cause any of its Subsidiariesrepresentations and warranties herein to become untrue in any material respect, or (iii) except as set forth in Section 5.01(e) provided, however, that nothing contained herein shall limit the ability of Keystone to exercise its rights under 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;Stock Option Agreement; and
(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 it 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, will 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 an 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) Keystone and the Company agree that any written approval obtained under this Section 6.1 may be relied upon by the other party if signed by the Chief Executive Officer or the Chief Financial Officer of the other party.
Appears in 1 contract
Sources: Merger Agreement (Keystone Automotive Industries 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 hereof and prior to the Effective Time (unless SBC shall otherwise approve in writing, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement Agreement, disclosed in accordance with Article 7 hereofthe Company Disclosure Letter or required by applicable Law):
(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 the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially all reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations 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 and to preserve the goodwill of their respective businessesassociates;
(bii) it shall not (A) amend its certificate of incorporation or by-laws or amend, modify or terminate the Rights Agreement; provided, however, that nothing in this Agreement shall prevent the Company from reducing below 20% the beneficial ownership threshold in the definition of an Acquiring Person (as defined in the Rights Agreement) or extending the Final Expiration Date of the Rights Agreement (as defined therein) or adopting a new rights agreement having substantially similar terms as the Rights Agreement and not inconsistent with (x) this proviso, (y)Section 5.1(o) (assuming references therein are to such a new rights agreement) or (z) the transactions contemplated by this Agreement; (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 in amounts consistent with its past practice or rights to purchase Company shall notShares or Company Preference Shares pursuant to any successor agreement to the Rights Agreement, and shall not adopted in accordance with the terms of this Agreement; or (D) repurchase, redeem or otherwise acquire or 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)otherwise acquire, pledge or otherwise encumber except in open market transactions in connection with the Company Stock Plans, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, but subject to the Company's obligations under subparagraph (iii) below.
(iii) neither it nor any of its Subsidiaries shall knowingly take any action that would prevent the Merger from qualifying for "pooling of interests" accounting treatment or as a "reorganization" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties herein to become untrue in any material respect;
(iv) neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards 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) for grants or awards to directors, officers and employees of it or its Subsidiaries under existing Company Compensation and Benefit Plans in such amounts and on such terms as are consistent with past practice, (B) 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 promoted or newly hired 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 it institute a broad based change in compensation, unless it shall have used its reasonable best efforts to provide SBC with prior notice of any such change or, if the Company was unable to provide such prior notice, the Company shall provide SBC with notice as soon as practicable following any such change, or (C) for actions necessary to satisfy existing contractual obligations under Company Compensation and Benefit Plans existing as of the date hereof;
(v) neither it nor any of its Subsidiaries shall issue any Company Preferred Shares or Company Preference Shares or incur any indebtedness for borrowed money or guarantee any such indebtedness if it should reasonably anticipate that after such incurrence any of its or any of its Subsidiaries' outstanding senior indebtedness would be rated A or lower by Standard & Poor's;
(vi) neither it nor any of its Subsidiaries shall make any capital expenditures in any period of twelve consecutive months following the date hereof in an aggregate amount in excess of 150% of the aggregate amount reflected in the Company's capital expenditure budget for such year, a copy of which has been provided to SBC;
(vii) neither it nor any of its Subsidiaries shall transfer, lease, license, sell, mortgage, pledge, encumber or otherwise dispose of any of its or its Subsidiaries property or assets (including capital stock of any of its Subsidiaries) with a fair market value in excess of $1 billion in the aggregate in any period of twelve consecutive months following the date hereof except for transfers, leases, licenses, sales, mortgages, pledges, encumbrances, or other dispositions in the ordinary course of business consistent with past practice;
(viii) neither it nor any other securities of its Subsidiaries shall issue, deliver, sell, or encumber shares of any class of its common stock or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares except, (A) any such shares issued pursuant to options and other awards outstanding on the date hereof under the Company Stock Plans, awards of options and other awards granted hereafter under the Company Stock Plans in accordance with this Agreement and shares issuable pursuant to such awards, and (B) up to an aggregate amount of $3.6 billion of such shares, securities securities, rights, warrants or convertible securities or any other securities or equity equivalents options (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding valued at their fair market value as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock agreement to make such acquisition) in any period of twelve consecutive months following the date hereof to fund, in whole or other equity interests in part, the cost of the Company any acquisition or any acquisitions permitted under clause (ix) below following reasonable notice to SBC of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind intention 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 take such Options were granted or (C) in connection with terminating the Options and the Stock Plansaction;
(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);
(eix) neither the Company it 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 spend in excess of $25,000 individually or $50,000 3.6 billion in the aggregate other than in any period of twelve consecutive months following the date hereof to acquire any business, whether by merger, consolidation, purchase of property or assets or otherwise (i) pursuant to existing contracts and commitments described in Section 5.01(g) valuing any non-cash consideration at its fair market value as of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) date of the Company Disclosure Scheduleagreement for such acquisition); provided, (iii) Permitted Liensthat no such acquisition would prevent, (iv) Liens relating materially delay or materially impair its ability 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 consummate the transactions contemplated by this Agreement. Notwithstanding the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) foregoing, neither the Company it nor any of its Subsidiaries shall adopt or put into effect a plan acquire any business the acquisition of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization which would subject SBC and its Subsidiaries following the consummation of the Company Merger to any Commercial Mobile Radio Service spectrum aggregation limit restriction pursuant to the provisions of 47 C.F.R. Section 20.6 or any of place SBC and its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) following the consummation 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 Merger 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) violation 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.Cellular Cross Ownership
Appears in 1 contract
Interim Operations. Except as otherwise expressly contemplated by this Agreement or Agreement, as required by applicable Law, as set forth in Section 5.01 5.1 of the Company Disclosure Schedule Schedule, or as consented agreed to in writing by ParentPurchaser (which agreement shall not be unreasonably withheld, delayed or conditioned), the Company covenants Company, the Stockholder, and agrees that during the period from the date of this Agreement Asset Sellers covenant and agree that, prior to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):Closing:
(a) the business and operations of the Company and its Subsidiaries The Business 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 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 consistent 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 businessespast practice;
(b) The Company and the Asset Sellers shall use commercially reasonable efforts to keep intact the rights, properties and assets, and vendor, supplier, customer, franchisee and other business relationships of the Business;
(c) 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 other equity interests of the capital stock of any of its Subsidiaries, any other securities or any Company (including securities convertible or exercisable into, or any rights, warrants rights or options to acquire, any such shares, securities capital stock or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interestsinterests of the Company), 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, including securities exchangeable forconvertible into, or options, warrants, calls, commitments rights or rights of any kind options to acquire, capital stock or other equity interests of the Company or any of its SubsidiariesCompany); , 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 stockbylaws;
(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 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, including by merging or consolidating with, or purchasing the assets or capital stock or other equity interests of, or by in any other manner, any business or any corporation, partnership, association or other business organization or division thereof thereof, or make any capital expenditures or commitments in an amount in excess of $25,000 in the aggregate, 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 possessionspursuant to existing agreements;
(ge) the The Company shall not, and not hire any employees;
(f) The Company 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 license, subject to any Lien (other than a Permitted Lien) or otherwise encumber or dispose of, of (including through any sale-leaseback or agree to sell, lease or subject to any Lien or otherwise dispose of, similar transaction) any of its properties or assets in excess assets, and no Asset Seller shall take any such action with respect to any of $25,000 individually or $50,000 in the aggregate Purchased Assets, 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)agreements, 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 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 1 contract
Interim Operations. (a) Except as otherwise expressly contemplated or permitted by this Agreement or Agreement, as set forth in Section 5.01 of the Company Disclosure Schedule Schedule, as required by applicable Law, or as otherwise consented to in writing by ParentParent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company covenants and agrees that during the period from the date of this Agreement to the earlier of the Effective Time (or until and the 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 the ordinary course of business consistent with past practices (including the timely filing with the SEC of all SEC Reports required to be filed by the Company under the Exchange Act or the Securities Act from the date of this Agreement to the Effective Time, and the compliance in all material respects with the applicable requirements of the Exchange Act and Securities Act, as the case may be, with respect to such SEC Reports) and the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their its current business organizationsorganization, keep available the services of their its current officers and key employees and preserve their its relationships with their its material customers, suppliers, licensors, licensees, advertisers, distributors licensees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesdistributors;
(bii) the Company shall not, and shall not permit any of its Subsidiaries to, (iA) 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 Subsidiariesstock, 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, including stock appreciation rights or phantom interests), except (x) for issuances of up to 33,750 Restricted Stock Units in the aggregate to (1) employees (other than officers) hired after the date of this Agreement by the Company pursuant to customary new hire packages entered into in the ordinary course of business consistent with past practices and current market practices; provided, that the Company shall not issue more than 5,000 Restricted Stock Units to any individual employee, and (2) current employees (other than officers) of the Company; provided, that the Company shall not issue more than 2,500 Restricted Stock Units to any individual employee and such issuances shall be made in lieu of ordinary course periodic issuances, (y) for issuances of Common Shares upon the exercise of Options or Warrants, or settlement of Restricted Stock or Restricted Stock Units, in each case, outstanding as of the date hereof; of this Agreement or with respect to Restricted Stock Units, issued in compliance with Section 5.01 and solely in accordance with the provisions of the Stock Plans and/or Option agreements, Warrant Agreements or Restricted Stock award or purchase agreements, as applicable, in each case, in effect on the date of this Agreement or entered into in compliance with Section 5.01 or (iiz) for issuances of Common Shares to participants in the Company ESPP pursuant to the terms thereof and issued in compliance with the terms of this Agreement, including Section 2.02(e), (B) 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, including 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) except for forfeitures of Common Shares issued pursuant to Restricted Stock award or any purchase agreements in effect on the date of its Subsidiaries); this Agreement or (iii) amendfor Tax withholdings and exercise price settlements upon exercise of Options or Warrants or with respect to Restricted Stock or Restricted Stock Units, modify or waive any term of any in each case, outstanding security as of the Company or any date 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 incorporationbylaws, or bylaws or (iiiD) split, combine or reclassify any shares of its capital stockstock or (E) amend or otherwise change the terms of any Options, and shall not permit any of its Subsidiaries to splitWarrants, combine Restricted Stock Units or reclassify any shares of its capital stockRestricted Stock;
(diii) 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, (A) 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 or (B) acquire or agree to acquire any asset (except for dividends paid by direct raw materials, inventory or indirect wholly owned Subsidiaries to supplies in the Company or to other wholly owned Subsidiaries ordinary course of the Company business consistent with past practicespractices and capital expenditures permitted by Section 5.01(a)(xi)), business line, division, capital stock or other equity interest of any Person;
(eiv) neither except as otherwise permitted by Section 5.01(a)(ii), the Company nor any of its Subsidiaries shall not (iA) grant or agree to any increase increase, in any manner manner, in the compensation compensation, severance benefits or fringe benefits of of, or pay any severance or bonus to, any current or former director, officer or employee, except ; provided that compensation increases may be made only to employees (other than officers of the Company) in the ordinary course of business consistent with past practice, increases practices and bonuses expressly consistent with current market practices pursuant to the terms of any Benefit Plan in effect on the date of this Agreement or entered into as 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 Plansby this Agreement, (iiB) enter into any new or materially amend amend, modify or supplement any Contract (including any existing employment, consulting, severance, termination, change of control or indemnification Contract), transaction, commitment or arrangement with any current or former director, officer, employee or other affiliate of the Company, provided that the Company or any may enter into offer letters with new employees (other than officers) providing for customary new hire packages consistent with the Benefit Plans in effect on the date of its Subsidiaries, or this Agreement and may pay severance and provide other termination benefits to employees (iii) except as set forth in Section 5.01(eother than officers) of the Company Disclosure Scheduleas may be required by the Benefit Plans in effect on the date of this Agreement, in each case, in the ordinary course of business consistent with past practices and current market practices, (C) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in required by this Agreement (including, without limitation, including Section 2.02 hereofand Section 5.17), become obligated under any Benefit Plan that was not in existence on the date hereof of this Agreement or amend or amend, modify or terminate, or pay any benefit that is not required by, terminate any Benefit Plan or other employee benefit plan or any agreementContract, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereofof this Agreement or (D) except as may be required to comply with applicable Law and except as provided or otherwise required by this Agreement (including Section 2.02 and Section 5.17), pay any benefit not required by any plan or arrangement (including any Benefit Plan) as in effect as of the date of this Agreement (including the granting of, acceleration of exercisability of or vesting of stock options, stock appreciation rights, restricted stock or restricted stock units; provided, however, that the foregoing restriction shall not exclude the grant of any stock options, restricted stock or restricted stock units granted (in accordance with the terms of Section 5.01(a)(ii)) to any employee (other than any officer) newly hired by the Company after the date of this Agreement);
(fv) the Company shall notnot sell, and shall not permit lease, license, mortgage or otherwise encumber or subject to any Lien (other than Permitted Liens) or otherwise dispose of any of its Subsidiaries toproperties or assets that are material, (x) enter into any new line of businessindividually or in the aggregate, 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 Company other than acquisitions or purchases made with the prior written consent sales of the Parent (each an “Approved Acquisition”) inventory and other than non-taxable transfers by or among assets in 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 ordinary course of the United States and its territorial possessionsbusiness consistent with past practices;
(gvi) the Company shall not, and shall not permit any of its Subsidiaries to, (xA) incur, assume, be responsible for or pre-pay pay, discharge or satisfy any Indebtedness, Indebtedness or enter into any agreement to, Contract to incur, assume, be responsible for or pre-pay pay, discharge or satisfy any Indebtedness, other than in the ordinary course of business consistent with past practices pursuant to letters of credit, lines of credit or other credit facilities or arrangements disclosed on Section 5.01(a)(vi) of the Company Disclosure Schedule, or guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations obligation of another personPerson, or 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 SubsidiariesCompany, guarantee any debt securities of others, enter into any “keep well” or other agreement Contract to maintain any financial statement condition of another person Person or enter into any Contract or arrangement having the economic effect of any of the foregoing; foregoing or (yB) sellmake or forgive any loans, leaseadvances or capital contributions to, license or subject to any Lien or otherwise dispose guarantees for the benefit of, or agree to sell, lease or subject to any Lien or otherwise dispose ofinvestments in, any of its properties or assets in excess of $25,000 individually or $50,000 in the aggregate Person, other than (i) pursuant cash advances 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 Subsidiariesemployees for reimbursable travel and other business expenses incurred in the ordinary course of business consistent with past practices;
(hvii) neither the Company nor any of its Subsidiaries shall not 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)Company;
(iviii) 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 modify, elect not to renew or supplement terminate or waive, release or assign any Contract outside the ordinary course of business consistent with past practice under which rights under, any Material Contract, provided, however, that the Company may (A) amend, modify, elect not to renew or terminate or waive, release or assign any rights under, any Material Contract described in subparagraphs (ii), (iii), (vii), (xii), (xiii), (xvi), (xix) and (xx) of its Subsidiaries shall have monetary obligations Section 3.16(a)) in excess of $25,000 (except as may be necessary for a manner that is not adverse to 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 which is in the ordinary course of business consistent with past practices disclosed and (B) enter into any new Material Contract of the type described in subparagraphs (ii), (iii), (vii), (xii), (xiii), (xvi), (xix) and (xx) of Section 3.16(a) in the ordinary course of business consistent with past practices.
(ix) the Company shall not renew any of its distribution agreements for a period of more than one (1) year from the date of expiration of the then current term of any such distribution agreement;
(x) except for customer (including distribution) Contracts entered into in the ordinary course of business consistent with past practices, the Company shall not renegotiate or enter into any new Material Contract or arrangements relating to any Proprietary Rights;
(xi) the Company shall not make any capital expenditure or commitments not consistent with expenditures in the Company’s capital budget for 2010 or 2011 provided to Parent prior to the date hereof and summarized in Section 5.01(j5.01(a)(xi) of the Company Disclosure Schedule by categorySchedule;
(xii) or the Company shall not make any commitments with respect to capital expenditures or other planned capital expenditures material changes in its standardized sales terms and conditions other than in the ordinary course of business consistent with past practices in excess of $500,000 in the aggregatepractices;
(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;
(mxiii) the Company shall notnot enter into any settlement, and conciliation or similar Contract with any Governmental Authority;
(xiv) the Company shall not permit (A) settle or compromise any pending or threatened Claim, except with respect to the settlement or compromise of its Subsidiaries toany such Claim (x) where the full amount paid or to be paid is covered by insurance coverage maintained by the Company (subject to any applicable deductibles or retention amounts) or (y) that is not covered by insurance and where the full amount paid or to be paid does not exceed $25,000 individually, (B) change any of the accounting policies, practices or procedures (including tax material Tax accounting methods, periods, policies, practices and or procedures) used by the Company or any of its Subsidiaries as methods of the date hereofreporting income, deductions or other items for financial accounting purposes, except as may be required as a result of a change in applicable Law or in GAAP;
(n) GAAP enacted after the Company shall not, and shall not permit any date 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 or (C) except in the ordinary course of business consistent with past practices, make, change or rescind 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 Returnelection, enter into any material closing agreementagreement relating to Taxes, settle or compromise any material Tax claimliability, assessment audit, Claim, proceeding or liability relating to the Company or assessment, file any of its Subsidiariesmaterial amended Tax Return, or surrender any right to claim a refund of material Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, or 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 material Tax liability or materially decreasing any present or future Tax benefit of the Company or any of its Subsidiariesassessment;
(pxv) the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries not allow any material Company Proprietary Rights 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 become abandoned or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, expired for failure to make required filings 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; andpay required fees;
(qxvi) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit to do any of the foregoingforegoing (other than as permitted by clause (i) above); and
(xvii) the Company shall use commercially reasonable efforts to maintain its inventory of supplies and components necessary for the manufacture of the Company's products at adequate levels as required to operate the business.
(b) If the Company shall desire to take an action which would be prohibited pursuant to Section 5.01(a) without the written consent of Parent, prior to taking such action the Company shall request such written consent by sending an email or facsimile to each of the following individuals, and may not take such action until such consent (which consent shall not be unreasonably withheld, conditioned or delayed) in writing has been received from any of the following individuals: C▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Director, New Business Development Email: c▇▇▇.▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇ J▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Vice President and General Manager (Bard Canada, Inc.) Email: j▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇ In each case, with a copy (which shall not constitute notice) to: J▇▇ ▇▇▇▇▇▇▇ Group Vice President Email: j▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Appears in 1 contract
Sources: Merger Agreement (Senorx 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 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 this Agreement in accordance with Article 7 hereof):
(a) Time, 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 and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially reasonable respective best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them associates, and to preserve the goodwill of their respective businesses;
(b) neither the Company shall not, and shall not permit nor any of its Subsidiaries toshall take any action or omit to take any action that would cause any of its representations and warranties herein to become untrue in any material respect. By way of amplification of the foregoing and not limitation, neither the company nor any of its Subsidiaries shall, between the date of this Agreement and the Effective Time, directly or indirectly, take any action, including but not limited to the following, except with the prior consent of a Designated Officer (as defined below):
(a) it shall not (i) authorize for issuanceamend its articles of incorporation or by-laws, issue, deliver, sell or agree or commit except as may be required to issue, sell or deliver (whether through increase the issuance or granting number of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock Common Stock in connection with the conversion of the Convertible Loan, the Series A Preferred or the capital stock of any of its SubsidiariesSeries B Preferred, 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 in each case outstanding as of the date hereof; (ii) split, combine or reclassify its outstanding shares of capital stock; (iii) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock; or (iv) repurchase, redeem or otherwise acquire any shares of the capital stock acquire, or other equity interests of the Company or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(includingb) neither it nor any of its Subsidiaries shall (i) issue, without limitationsell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other equity interests property or assets, except for (x) issuances of Common Stock upon conversion of the Company Convertible Loan, the Series A Preferred or the Series B Preferred, in each case outstanding on the date hereof, and (y) issuances of Series B Preferred upon exercise of warrants outstanding on the date hereof; (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries); or (iii) amendmake or authorize or commit for any capital expenditures or, modify by any means, make any acquisition of, or waive investment in, assets or stock of or other interest in, any term of any outstanding security of the Company other Person 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 Plansentity;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by neither it in nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or alter through mergerawards under, 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 modify, any -23- Company Compensation and Benefit Plans (including, without limitation, any grant or issuance of incorporation new Options, any amendment or bylaws changes to the terms of any Options or permit any repricing of its Subsidiaries to amend its articles of incorporationOptions), or bylaws increase the salary, wage, bonus or (iii) split, combine or reclassify other compensation of any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockemployees;
(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 neither it nor any of its Subsidiaries toshall settle or compromise any material claims or litigation or modify, declare, set aside amend or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, terminate any of its capital stock (except for dividends paid by direct material Contracts or indirect wholly owned Subsidiaries to the Company waive, release or to other wholly owned Subsidiaries of the Company consistent with past practices)assign any material rights or claims;
(e) neither the Company it 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 Tax election 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 a beneficiary or loss loss-payable payee to be canceled cancelled or terminated, (iii) maintain all Leased Real Property (including, without limitation, terminated except in the furniture, fixtures, equipment ordinary 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 usual course 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;
(lf) except as set forth in Section 5.01(lmake any change, other than required by GAAP, to its accounting principles or procedures; and
(g) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, (i) materially amend any currently existing labor will authorize 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 an 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. For the purposes of this Section 6.1, "Designated Officer" shall mean ------------------ any of ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, each of whom is an officer of the Parent.
Appears in 1 contract
Sources: Merger Agreement
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 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 (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(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 and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially respective reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) the Company shall not, and it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws or, amend, modify or terminate the Rights Agreement; (iii) split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries and other than regular quarterly cash dividends not in excess of $0.055 per Share; or (v) repurchase, redeem or otherwise acquire, except in connection with the Stock Plans, or 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)otherwise acquire, 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 into or exchangeable 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 its capital stock or other equity interests of the Company or stock;
(c) neither it nor any of its Subsidiaries shall (includingi) issue, without limitationsell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other equity interests property or assets (other than in accordance with the Rights Agreement and other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Stock Plans); (ii) other than in the ordinary and usual course of the Company business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries)) or incur or modify any material indebtedness or other liability; or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required make or authorize or commit for any capital expenditures other than capital expenditures (a) in the aggregate amount remaining in the capital appropriations/spending budgets set forth in the Company LA_LAN01:179306.23 Disclosure Schedule after deducting amounts previously authorized or committed by this Agreementthe Company with respect to calendar year 2005 and (b) in amounts not in excess of $2 million individually and $10 million in the aggregate with respect to all unbudgeted capital expenditures, or (B) by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity for consideration in excess of (a) in the aggregate amount remaining in the acquisitions budget set forth in the Company Disclosure Schedule after deducting amounts previously spent by the Company with respect to acquisitions and investments in calendar year 2005 and (b) in amounts not in excess of $2 million individually and $10 million in the aggregate with respect to all unbudgeted acquisitions; and (iv) enter into any joint venture agreement, partnership agreement or similar agreement with any Person;
(d) except as set forth in Section 5.01(bSections 5.1(h)(i) and 5.1(h)(xii) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent or as otherwise 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) sellapplicable Law, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by neither 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 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 employeeEmployee of the Company or any of its Subsidiaries except, except increases in the case of Employees who are not officers, 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 increase the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus to, or make any new or materially amend equity awards to any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee officer or affiliate Employee of the Company or any of its Subsidiaries, or except for increases in base salary in the ordinary course of business consistent with past practice for Employees who are not officers, (iii) except as set forth enter into, adopt, extend or renew any employment, severance, change in Section 5.01(e) of the Company Disclosure Schedulecontrol, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (includingtermination, 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 deferred compensation or other employee benefit plan or similar agreement with 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 Employee 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 establish, adopt, amend, suspend, terminate or otherwise being contested in good faith and as to which appropriate reserves have been established by exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company in accordance with GAAP and Options or Company Awards, (v) take any action to fund or in any other than non-taxable transfers by way secure the payment of compensation or among benefits under any Company Benefit Plan, (vi) take any action to accelerate the vesting or payment of any compensation or benefits under any Company and Benefit Plan, to the Company’s Subsidiaries;
extent not already provided for under any such Company Benefit Plan, (hvii) neither the Company nor change any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization actuarial 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 assumptions used to calculate funding 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 any Company Benefit Plan or other planned capital expenditures other than to change the manner in which contributions to such plans are made or 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 basis on which such types and in such amounts as contributions 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 hereofdetermined, except as may be required as a result of a change in applicable Law by GAAP; or in GAAP;
(nviii) the Company shall notforgive any loans to directors, and shall not permit any of its Subsidiaries to, take, officers 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 Employees of the Company or any of its Subsidiaries;
(pe) prior to making any written or oral communications to any of its or its Subsidiaries’ directors, officers or Employees pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, it shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the intended communication, and Parent and the Company shall cooperate in providing any such communication;
(if) use its commercially reasonable efforts toexcept in the ordinary and usual course of business, 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 neither it nor any of its Subsidiaries thanshall settle or compromise any material claims or litigation or LA_LAN01:179306.23 modify, the terms amend or terminate any of such Contract prior to the making its material Contracts or waive, release or assign any material rights or claims;
(g) neither it nor any of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, shall make any Tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the ordinary and usual course of business;
(h) neither it nor any of its Subsidiaries shall take any action or omit to take any action that would cause any of its representations and warranties herein to become untrue in any material respect;
(i) neither it nor any of its Subsidiaries will authorize or enter into, or materially amend, modify or supplement, into any Lease or ▇▇▇▇▇▇;
(j) neither it nor any of its Subsidiaries will enter into any agreement that limits (other Material Contract under which than in an insignificant manner) the costs or obligations ability of the Company or any Subsidiary of the Company, or would limit (other than in an insignificant manner) the ability of Parent or any Subsidiary of Parent after the Effective Time, to compete in or conduct any line of business or compete with any Person in any geographic area or during any period, it being understood that any restriction that by its terms does not extend more than six months beyond the Effective Time shall be deemed to be insignificant;
(k) neither it nor any of its Subsidiaries resulting will enter into any marketing Contract with respect to natural gas for a term longer than 31 days from the date of such amendment, modification Contract (or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements six months in the aggregatecase of Bolivia);
(l) neither it nor any of its Subsidiaries will enter into any marketing Contract with respect to crude oil for a term longer than two full months from the last day of the calendar month in which such Contract is entered into; and
(qm) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, agree will authorize or commit enter into an agreement 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 During the period from March 31, 1998 and continuing until the date of this Agreement to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):Closing:
(a) The Shareholders agree (except as expressly contemplated by or disclosed within this Agreement, including any Exhibits and Schedules hereto, or to the extent that Buyer shall otherwise consent in writing) that as to the Company:
(1) The Company shall carry on 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 usual, regular and ordinary course of business and in substantially the Company and its Subsidiaries shall same manner as heretofore conducted and, to the extent consistent with such business, use their commercially all reasonable best efforts to preserve intact their current its present 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;organization,
(b2) the The Company shall not, not and shall not permit propose to: (a) declare, set aside or pay any dividend, on, or make other distributions in respect of, any of its Subsidiaries tocapital stock, (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 redeem any shares of its capital stock other than a cash dividend to be distributed to the Shareholders in an amount equal to the Shareholders' liability for federal and state taxes on the earnings from operations of the Company during 1998 through the Closing Date (exclusive of any income or gain on sale associated with the transactions covered by this Agreement) as more fully described at Section 5.4 hereafter; (b) split, combine or reclassify any of its capital stock or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; (c) redeem, repurchase or otherwise acquire any shares of its capital stock; or (d) otherwise change its capitalization.
(3) Except as contemplated by this Agreement, the Company shall not sell, issue, pledge, authorize or propose the sale or issuance of, pledge or purchase or propose the purchase of, any shares of its capital stock of any of its Subsidiaries, any other securities class 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;convertible securities.
(c4) the The Company shall not amend its articles of incorporation or its Bylaws.
(i5) The Company shall not sell, transfer or lease, pledge, encumber or otherwise dispose of or agree to sell, transfer or lease, 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 encumber 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 dispose of, any of its capital stock (assets that are material 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 prior practice and bonuses expressly required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e) of no event amounting in 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 aggregate 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;more than $75,000.
(f6) the The Company shall not, and shall not permit incur any of its Subsidiaries to, (x) enter into any new line of business, indebtedness for borrowed money 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, guarantee any such Indebtedness 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 sell 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 others other than in the ordinary course of business consistent with past practices prior practice and in excess of $500,000 no event (disregarding for these purposes ordinary trade accounts payable and operating accruals) amounting in the aggregate;aggregate to more than $75,000.
(k7) 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 The Company shall not, and shall not permit any of its Subsidiaries to, (i) materially adopt or 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 any collective bargaining agreement or Employee Benefit Plan.
(8) The Company shall not grant to any Shareholder-employee any increase in compensation or in severance or termination pay, or enter into any employment agreement with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitment, except, in each case, as required by Law;executive officer.
(m9) the The Company shall notnot acquire (by merger, and consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or subdivision thereof, or make any investment by either purchase of stock or securities, contributions to capital, property transfer or, except in the ordinary course of business, purchase of any property or assets, of any other individual or entity.
(10) The Company 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 claimmaterial federal, assessment state, local 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;foreign tax liability.
(p11) the The Company shall (i) use its commercially reasonable efforts tonot waive, and shall cause its Subsidiaries to use their respective commercially reasonable efforts torelease, prevent the termination grant or transfer any rights of any Contract with any Significant Customer, (ii) not, and shall cause its Subsidiaries not to, amend material value or modify or change in any material respect any Material 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; andordinary course of business and consistent with past practice.
(q12) the The Company shall not, and shall not permit enter into any of its Subsidiaries to, agree agreement or commit arrangement to do any of the foregoing. The Company shall not take any action, or fail to take any action, that is reasonably likely to result in any of the representations and warranties of the Company set forth in this Agreement becoming untrue in any material respect.
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of on the Company Disclosure Schedule or as consented agreed to in writing by ParentMelita (which consent shall not be unreasonably conditioned, withheld or delayed), 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) except as otherwise described in Section 5.01(a) of the Company Disclosure Schedule, the business and operations of the Company and its Subsidiaries subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, conducted only in the ordinary course of business and the Company and its Subsidiaries 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 Subsidiariessubsidiaries, 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, including without limitation, limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of on or prior to the date hereof; hereof or (ii) repurchase, redeem or otherwise acquire acquire, or permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries 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 Subsidiariessubsidiaries); 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) for the purchase of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options Common Shares pursuant 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’s buy-back program;
(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 material subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiariessubsidiaries, except as otherwise provided on Section 5.01(c) of the Company Disclosure Schedule, (ii) amend or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries subsidiaries to amend its articles certificate of incorporation, or bylaws or equivalent organizational documents or
(iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries 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 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 from as to itself and its Subsidiaries that, after the date of this Agreement hereof and prior to the Effective Time date on which Purchaser's nominees comprise a majority of the Board of Directors of the Company (or until termination of unless Praxair shall otherwise approve in writing and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(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 the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially its reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) it shall not (A) sell or pledge any capital stock owned by it in any of its Subsidiaries; (B) amend the Company shall notCharter or its by-laws or amend, modify or terminate the Rights Agreement; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any Shares or Preferred Shares other than regular quarterly or semi-annual cash dividends not in excess of $0.12 per Share and shall not regular quarterly or semi-annual cash dividends on the Preferred Shares; or (E) repurchase, redeem or otherwise acquire, or 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)otherwise acquire, 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 into or exchangeable 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 its capital stock or other equity interests except in connection with the ordinary course of operations of the Company or CBI Salaried Employee Stock Ownership Plan (1987);
(iii) neither it nor any of its Subsidiaries shall except as disclosed in Section 7.1(a) of the Company Disclosure Letter (includingA) issue, without limitationsell, pledge, dispose of or encumber, or authorize or propose the issuance, sale, pledge, disposition or encumbrance of, any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other equity interests property or assets (other than Shares issuable pursuant to options outstanding on the date hereof under the Stock Plan or upon conversion of Convertible Preferred Shares; (B) other than in the Company ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of any other property or assets or encumber any property or assets (including capital stock of any of its Subsidiaries)) or incur or modify any material indebtedness or other liability; or (iiiC) amendmake any commitments for, modify make or waive authorize any term of any outstanding security of the Company or any of its Subsidiariescapital expenditures other than existing capital expenditures required to be made pursuant to existing capital projects, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b7.1(a)(iii) of the Company Disclosure ScheduleLetter, in connection with accelerating the vesting schedules which have been previously authorized or, by any means, make any acquisition of, or investment in, assets or stock of the Options to the extent required by the Stock Plans any other Person or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansentity;
(civ) the Company shall not (iexcept as disclosed in Section 7.1(a) 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) Disclosure Letter, neither the Company it 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 byestablish, 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 toadopt, enter into, make any new grants or materially amendawards under, modify amend or supplementotherwise modify, any Lease Compensation and Benefit Plans or increase the salary, wage, bonus or other Material Contract under which the costs or obligations compensation 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 employees other than increases in compensation 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.ordinary course
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 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, which approval shall not be unreasonably withheld or until termination of delayed, or except as otherwise expressly contemplated by this Agreement Agreement, the Stock Option Agreement, disclosed in accordance with Article 7 hereofthe Company Disclosure Letter or required by applicable Law):
(ai) the The business and operations of the Company it and its Subsidiaries shall be conductedconducted in the ordinary and usual course and, and to the books and records of the Company extent consistent therewith, it and its Subsidiaries shall be maintaineduse their reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, only suppliers, regulators, distributors, creditors, lessors, licensors and licensees, employees and business associates;
(ii) It shall not: (A) amend its certificate of incorporation or bylaws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock, other than regular quarterly cash dividends not in excess of $.225 per Company Share; or (D) repurchase, redeem or otherwise acquire, except in connection with commitments under or the express terms of the Company Stock Plans as in effect on the date of this Agreement but subject to the Company's obligations under subparagraph (iii) below, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(iii) Neither it nor any of its Subsidiaries shall take any action that would prevent the Merger from qualifying for "pooling-of-interests" accounting treatment in accordance with the requirements of APB No. 16 or as a "re▇▇▇▇▇▇▇▇▇▇on" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties in this Agreement to become untrue in any material respect;
(iv) Neither it nor any of its ERISA Affiliates shall: (A) make any contribution to the Company Benefits Protection Trust (the "Rabbi Trust") in excess of $5,000,000; (B) accelerate, amend or change the period of exerciseability of or terminate, establish, adopt, enter into, increase, make any new grants or awards of stock-based compensation or other benefits under any Compensation and Benefit Plans; (C) amend or otherwise modify or increase the benefits under any Compensation and Benefit Plans; or (D) increase the salary, wage, bonus or other cash compensation of any directors, officers or key employees, in the case of (B), (C) and (D), except for actions necessary to satisfy existing contractual obligations under Compensation and Benefit Plans existing as of the date of this Agreement and in the case of (D) except in the ordinary course of business and consistent with past practice and neither it nor any of its ERISA Affiliates shall take any actions that would or could have the effect of any of the foregoing; provided, however, that after the date of this Agreement and prior to the Effective Time, the Company and its Subsidiaries shall use their commercially reasonable best efforts may (I) establish a transition retention program which provides non-equity based retention incentives (not to preserve intact their current business organizationsexceed a maximum value of $20,000,000 in the aggregate), keep available the services criteria for which, including the criteria for the timing of their current officers and employees and preserve their relationships with their material customerspayments thereunder, suppliers, licensors, licensees, advertisers, distributors and other material third parties having business dealings with them are reviewed in advance by Parent; (II) make new grants or awards of stock-based compensation to the extent permitted under Section 6.1(a)(vii); (III) take actions to appoint the Administrative Committee under the Rabbi Trust and to preserve establish reasonable compensation for members of the goodwill Administrative Committee who are not employees of their respective businessesthe Company or its affiliates for services rendered as members of the Administrative Committee; and (IV) in the event that the Effective Time has not occurred prior to the next regularly scheduled meeting of the Company's shareholders and provided that the amendment would not prevent the Merger from qualifying for pooling-of-interest accounting treatment in accordance with APB No. 16, to seek approval from the Company's shareholders of an amendment to the 1997 Company Long-Term Incentive Plan to provide for the issuance of additional shares of Company Common Stock for grants and awards in the ordinary course of business and consistent with past practice as described in Section 6.1(a)(vii);
(bv) the Company shall not, and shall not permit Neither it nor any of its Subsidiaries toshall incur, repay or retire prior to maturity or refinance prior to maturity any indebtedness for borrowed money or guarantee any such indebtedness or issue, sell, repurchase or redeem prior to maturity any debt securities or warrants or rights to acquire any debt securities or guarantee any debt securities of others, in all such cases in excess of, in the aggregate, $500,000,000;
(ivi) authorize Neither it nor any of its Subsidiaries shall make any capital expenditures in an aggregate amount in excess of the aggregate amount reflected in the Company's capital expenditure budget for issuance, the applicable fiscal year;
(vii) Neither it nor any of its Subsidiaries shall 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)sell, pledge or otherwise encumber shares of any shares class of its capital 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, or any bonds, debentures, notes or other debt obligations having the right to vote or convertible into or exercisable for any such shares, securities or convertible securities or any other securities or equity equivalents (includingprovided, without limitationhowever, 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 that the Company or may award equity-based compensation under the Company Stock Plans provided such awards are made in the ordinary course of business and are consistent (including the value of such awards, determined on an individual basis) with past practices;
(viii) Neither it nor any of its Subsidiaries (includingshall consummate, without limitationauthorize, securities exchangeable forpropose or announce an intention to authorize or propose, or optionsenter into an agreement with respect to, warrantsany merger, callsconsolidation, commitments joint venture or rights business combination (other than the Merger), or any purchase, sale, lease, license or other acquisition or disposition of any kind to acquirebusiness or of a material amount of assets or securities except (in the case of assets) for transactions entered into in the ordinary and usual course of its business;
(ix) It shall not make any material change in its accounting policies or procedures, capital stock other than any such change that is required by GAAP;
(x) It shall not release, assign, settle or other equity interests of the Company compromise any material claims or litigation or make any material tax election or settle or compromise any material federal, state, local or foreign tax liability; and
(xi) Neither it nor any of its Subsidiaries); Subsidiaries shall authorize or (iii) amend, modify or waive enter into any term of agreement to do any outstanding security 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, which approval shall not be unreasonably withheld or any of its Subsidiariesdelayed, or except (A) as required otherwise expressly contemplated by this Agreement, disclosed in the Parent Disclosure Letter or required by applicable Law):
(i) It shall not: (A) reclassify its outstanding shares of capital stock; 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 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 dividend payable in cash, stock (other than Parent Common Stock) or other property)property in respect of any capital stock, except (x) for regular quarterly cash dividends not in excess of $.87 per share of Parent Common Stock, or make any other distributions in respect of, any of its capital stock (except y) for dividends paid a dividend that would be received by direct or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries holders of the Company consistent with past practices)Common Stock on an equivalent basis per share of Parent Common Stock after the Effective Time;
(eii) neither the Company Neither it nor any of its Subsidiaries shall (i) grant take any action that would prevent the Merger from qualifying for "pooling-of-interest" accounting treatment in accordance with the requirements of APB No. 16 or agree to any increase in any manner as a "re▇▇▇▇▇▇▇▇▇▇on" within the compensation or benefits meaning 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(e368(a) 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 Code or materially amend any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee or affiliate of the Company or that would cause any of its Subsidiaries, or representations and warranties in this Agreement to become untrue in any material respect;
(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 It shall not permit any make acquisitions 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 businesses or enter into any arrangement having the economic effect joint ventures, except for acquisitions of any businesses or joint ventures engaged in businesses 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 type listed in Section 5.01(g6.1(b)(iii) of the Company Parent Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) Letter. If Parent seeks the consent of the Company Disclosure Schedule)to make other acquisitions of businesses or enter into other joint ventures, (iii) Permitted Liensthe decision whether to grant such consent shall be made solely by the Company's Chief Executive Officer, who shall treat any information provided to him in connection with the request confidentially and shall not share such information, or the fact of the request, with any other Person; provided, however, that the Company's Chief Executive Officer may share such information, and disclose the fact of the request, with such of the Company's outside legal advisors as are reasonably necessary to enable the Chief Executive Officer to make an informed decision with respect to the requested consent.
(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 Neither it 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.
(c) Parent and the Company agree that any written approval obtained under this Section 6.1 must be signed by the Chief Executive Officer or Chief Financial Officer if signing for Parent and by the Chief Executive Officer if signing for the Company.
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 consent in writing, which consent will not unreasonably be withheld or delayed, and except as otherwise expressly set forth in or contemplated by this Agreement or as set forth in Section 5.01 7.1 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 hereofSchedule):
(a) the business and operations of the Company it and its Subsidiaries shall will 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 Company extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseesstrategic partners, advertiserscreditors, distributors lessors, employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(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 it shall not (i) issue, sell, transfer or pledge, dispose of or agree to sell, transfer or pledge, encumber any equity interest capital stock 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 by-laws (or permit any of its Subsidiaries to amend its articles of incorporationequivalent governing instruments), or bylaws or (iii) split, combine or reclassify any its outstanding shares of its capital stock, and shall not (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries, or (v) purchase, redeem or otherwise acquire, except for the acquisition of shares of Company Common Stock from holders of Company Stock Options in full or partial payment of the exercise price payable by such holder upon exercise of Company Stock Options to the extent required or permitted under the terms of such Company Stock Options, or permit any of its Subsidiaries to splitpurchase or otherwise acquire, combine any shares of its capital stock or reclassify any securities convertible into or exchangeable 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 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 (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 date on which Purchaser's nominees comprise a majority of the Board of Directors of the Company (or until termination of unless Praxair shall otherwise approve in writing and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(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 the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially its reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing rela- tions and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businesses;associates; 27
(bii) it shall not (A) sell or pledge any capital stock owned by it in any of its Subsidiaries; (B) amend the Company shall notCharter or its by-laws or amend, modify or terminate the Rights Agreement; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any Shares or Preferred Shares other than regular quarterly or semi- annual cash dividends not in excess of $0.12 per Share and shall not regular quarterly or semi-annual cash dividends on the Preferred Shares; or (E) repurchase, redeem or otherwise acquire, or 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)otherwise acquire, 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 into or exchangeable 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 its capital stock or other equity interests except in connection with the ordinary course of operations of the Company or CBI Salaried Employee Stock Ownership Plan (1987);
(iii) neither it nor any of its Subsidiaries shall except as disclosed in Section 7.1(a) of the Company Disclosure Letter (includingA) issue, without limitationsell, pledge, dispose of or encumber, or authorize or propose the issuance, sale, pledge, disposition or encumbrance of, any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other equity interests property or assets (other than Shares issuable pursuant to options outstanding on the date hereof under the Stock Plan or upon conversion of Convertible Preferred Shares; (B) other than in the Company ordinary and usual course of busi- ness, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of any other property or assets or encumber any property or assets (including capital stock of any of its Subsidiaries)) or incur or modify any material indebtedness or other liability; or (iiiC) amendmake any commitments for, modify make or waive authorize any term of any outstanding security of the Company or any of its Subsidiariescapital expenditures other than existing capital expenditures required to be made pursuant to existing capital projects, except (A) as required by this Agreement, (B) as set forth in Section 5.01(b7.1(a)(iii) of the Company Disclosure ScheduleLetter, in connection with accelerating the vesting schedules which have been previously authorized or, by any means, make any acquisition of, or investment in, assets or stock of the Options to the extent required by the Stock Plans any other Person or the agreements pursuant to which such Options were granted or (C) in connection with terminating the Options and the Stock Plansentity;
(civ) the Company shall not (iexcept as disclosed in Section 7.1(a) 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) Disclosure Letter, neither the Company it nor any of its Subsidiaries shall (i) grant terminate, establish, adopt, enter into, make any new grants or agree to awards under, amend or otherwise modify, any Compensation and Benefit Plans or increase in any manner the salary, wage, bonus or other compensation or benefits of any current or former director, officer or employee, except employees other than increases in compensation in the ordinary course 28 of business business, in each case, consistent with past practice, increases practices with regard to frequency 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 hereofamount;
(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 it nor any of its Subsidiaries shall adopt settle or put into effect a plan compromise any material claims or litigation or, except in the ordinary and usual course of complete business modify, amend or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or terminate any of its Subsidiaries (other than material Contracts or waive, release or assign any transaction specifically contemplated by this Agreement)material rights or claims;
(ivi) 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 neither it nor 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 Tax election 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 a beneficiary or loss loss-payable payee to be canceled cancelled or terminated, (iii) maintain all Leased Real Property (including, without limitation, terminated except in the furniture, fixtures, equipment ordinary 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 usual course 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;business; and
(lvii) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, (i) materially amend any currently existing labor will authorize 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 an 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) The Company agrees that, between the date of this Agreement and the Effective Time, except (i) as otherwise expressly contemplated by this Agreement or Agreement, (ii) as set forth in Section 5.01 7.1(a) of the Company Disclosure Schedule Letter, (iii) as required by applicable Law, or as consented (iv) to the extent Parent otherwise consents in writing by Parent(which consent shall not be unreasonably withheld, conditioned or delayed), 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 businesses of the Company and its the 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 consistent with past practice. Without limiting the generality of the foregoing, except (A) as expressly contemplated by this Agreement, (B) as set forth in Section 7.1(a) of the Company Disclosure Letter, (C) as required by applicable Law or (D) to the extent Parent otherwise consents in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the Company agrees that neither the Company nor any Subsidiary shall, between the date of this Agreement and the Company and Effective Time, do any of the following:
(i) amend or restate the articles of incorporation or bylaws of the Company, or such similar organizational or governing documents of each of 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 businessesSubsidiaries;
(bii) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuancegrant, issue, deliver, sell or agree or commit to issuesell, sell or deliver (whether through the issuance or granting of optionstransfer, commitments, subscriptions, rights to purchase or otherwise)dispose of, pledge or otherwise encumber any shares of its capital stock the Company’s or the capital stock of any of its Subsidiaries’ capital stock or equity interests, any other voting securities or any securities convertible into or exercisable intoexchangeable for, or any rights, warrants or options to acquire, any such sharesshares of capital stock or equity interests, voting securities or convertible securities or any securities, other securities or equity equivalents (including, without limitation, stock appreciation rights or phantom interests), except for issuances than the issuance of Common Shares issuable upon the exercise of Company Options or upon the vesting of RSUs outstanding under the Stock Plans as of the date hereof; of this Agreement or issued as required by the employment agreements and the Stock Plans;
(iiiii) repurchasedeclare, redeem authorize, set aside, make or otherwise acquire pay any shares dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of the its capital stock or other equity interests of interests, except for dividends paid by any direct or indirect wholly owned Subsidiary to the Company or to any of its Subsidiaries other direct or indirect wholly owned Subsidiary;
(includingiv) reclassify, without limitationcombine, securities exchangeable forsplit, subdivide or optionsredeem, warrants, calls, commitments purchase or rights of any kind to otherwise acquire, directly or indirectly, any capital stock or other equity interests of the Company or any of its Subsidiaries); ;
(v) (A) acquire (including by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business or business organization, any division or business unit thereof or any material assets, (B) incur, create, assume or otherwise become liable for any amount of Indebtedness or other liability or issue any debt securities or any right to acquire debt securities or assume, guarantee, endorse or otherwise become responsible or liable for any liability of any other Person other than (1) in the ordinary course of business consistent with past practice or (iii2) amend, modify draws on any existing credit facility or waive any term line of any outstanding security credit of the Company or any of its SubsidiariesSubsidiaries solely for working capital purposes, 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;
enter into any new line of business, (cD) the Company shall not (i) sellmake any loans, transfer advances or pledgecapital contributions to, or agree to sellinvestments in, 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) Persons 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 and 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 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 (yE) sell, lease, license or subject to any Lien license, encumber or otherwise dispose ofof or transfer (by merger, consolidation, sale of stock or agree to sell, lease assets or subject to otherwise) any Lien or otherwise dispose of, any amount of its properties assets other than in the ordinary course of business consistent with past practice;
(vi) make or assets commit to make any capital expenditure (not including capital expenditures for rental instruments) other than in respect of those capital expenditure projects that are (A) contemplated by the Company’s fiscal year 2012 forecast or (B) not in excess of $25,000 individually or $50,000 5,000,000 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;
(hvii) 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 Subsidiary (other than the Merger);
(viii) (A) increase the salary, wages, benefits, bonuses or other compensation payable or to become payable to its current or former directors, officers or Employees, except for increases required under employment agreements existing on the date hereof, (B) enter into or amend or otherwise alter any transaction specifically employment, change of control, retention or severance agreement with, or establish, adopt, enter into or amend any Benefit Plan (other than ordinary course changes to any ERISA plan other than severance plans), (C) except as required under any employment agreement existing on the date hereof or as may be required to implement the actions contemplated by this Agreement);
(i) except as set forth in , including Section 5.01(i) 4.3 and Section 7.8, accelerate the vesting or payment of the Company Disclosure Schedule, the Company shall not, and shall not permit any of its Subsidiaries to, (i) enter into, compensation or materially amend, modify or supplement benefit under 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)Benefit Plan, or (iiD) waivetake any action to fund the payment of compensation or benefits under any Benefit Plan, releaseexcept, grantin the case of clauses (C) and (D), 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 practice, or as may be required by the terms of any Benefit Plan in effect on the date hereof or to comply with applicable Law, including Section 5.01(j) 409A 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 aggregateCode;
(kix) unless otherwise required by Law, enter into any collective bargaining agreement or other contract with a labor union, works council or other labor organization;
(x) make any material change to its methods of accounting, principles or practices (or change an annual accounting period) in effect as of the Company shalldate of this Agreement, and shall cause its Subsidiaries to, (i) continue except as required by changes in force insurance with good and responsible insurance companies adequately covering risks of such types and in such amounts GAAP or Law or by the SEC or as are consistent with recommended 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 faithindependent registered public accounting firm;
(lxi) except as set forth in Section 5.01(l(A) of the Company Disclosure Schedulemake, the Company shall notchange or rescind (or file a request to make, and shall not permit change or rescind) any of its Subsidiaries tomaterial Tax election, (iB) materially amend settle or compromise any currently existing labor material Tax liability, audit claim or collective bargaining agreementassessment, memorandum (C) surrender any right to claim for a Tax refund, (D) change in any material respect (or understandingfile a request to make any such change) any accounting method in respect of Taxes, grievance settlement (E) file any amendment to an income or any other agreement or commitment to or relating to any labor unionmaterial Tax Return, or (iiF) enter into any labor or collective bargaining closing agreement, memorandum settle or understandingcompromise any material claim or material assessment in respect of Taxes, grievance settlement or any other agreement or commitment to or relating (G) consent to any labor union which is different extension or waiver of the statute of limitations applicable to any claim or assessment in any material respect with any currently existing collective bargaining agreement, memorandum or understanding, grievance settlement or commitmentof Taxes, except, in each case, as required by Law;
(mxii) write up, write down or write off the Company shall not, and shall not permit book value of any of its material assets, other than (A) in the ordinary course of business and consistent with past practice or (B) as may be required by GAAP;
(xiii) (A) waive, settle, satisfy or compromise any claim against the Company (which shall include any pending or threatened action), except to the extent subject to reserves existing on the date of this Agreement, or (B) waive, settle, satisfy or compromise any material claim by the Company, except in the ordinary course of business consistent with past practice;
(xiv) other than in the ordinary course of business consistent with past practice and on terms not materially adverse to the Company and the Subsidiaries totaken as a whole, change enter into, amend, modify, cancel, waive any rights under or consent to the termination of any Material Contract or any Contract that would be a Material Contract if in effect on the accounting policiesdate of this Agreement;
(xv) enter into, practices renew or procedures (including tax accounting policiesamend in any material respect any transaction, practices and procedures) used by Contract, arrangement or understanding between the Company or any of its Subsidiaries as Subsidiaries, on the one hand, and any Affiliate of the date hereofCompany (other than any of the Company’s Subsidiaries), on the other hand, of the type that would be required to be disclosed under Item 404 of Regulation S-K promulgated under the Exchange Act, except as may be required as a result for any agreement, renewal or amendment made in the ordinary course of a change in applicable Law business consistent with past practice or in GAAPcontemplated by the Company’s fiscal year 2012 budget;
(nxvi) the Company shall not(A) assign, and shall not permit any of its Subsidiaries totransfer, takelicense or sublicense, mortgage 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 encumber 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 Intellectual Property owned by the Company or any of its Subsidiaries, except for non-exclusive licenses or surrender non-exclusive sublicenses of such Intellectual Property in the ordinary course of business consistent with past practice, or (B) fail to pay any right fee, take any action, protect any trade secret, or make any filing reasonably necessary to claim a refund of Taxes, except as set forth in Section 5.01(o) maintain its ownership of the material Intellectual Property owned by the Company Disclosure Schedule, consent or any of its Subsidiaries; or
(xvii) agree in writing to do any extension or waiver of the limitation period applicable foregoing.
(b) Without the prior written consent of the Company, Parent and Merger Sub shall not, and shall cause the Guarantor and their respective Affiliates to not, (i) enter into discussions or negotiations regarding any Tax claim Contracts or assessment relating arrangements or understandings (whether oral or written) or commitments to enter into Contracts, arrangements or understandings (whether oral or written) or (ii) amend or otherwise supplement any Contracts, arrangements or understandings (whether oral or written) in existence on the date of this Agreement, in the case of clauses (i) and (ii) that are between Parent, Merger Sub, the Guarantor or any of their Affiliates, on the one hand, and any officer or director of the Company or any of its Subsidiaries, or take on the other hand.
(c) If the Company identifies 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 activities of the Company or any of its Subsidiaries;
(p) , including those activities of their respective directors, officers, managers, employees, independent contractors, representatives or agents, that the Company reasonably believes to be in violation of the FCPA, the Company shall (i) use its commercially reasonable best efforts to, and shall to 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 each of its Subsidiaries than, the terms of and Affiliates to cease such Contract prior to the making of such amendment activities and take any additional remedial action reasonably requested by Parent 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 that 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 reasonably deems appropriate under 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 foregoingcircumstances.
Appears in 1 contract
Sources: Merger Agreement (Immucor Inc)
Interim Operations. Except The Company covenants and agrees as otherwise contemplated by to itself and its Subsidiaries that, from the date of this Agreement until the Effective Time, except as specifically permitted by any other provision of this Agreement (or as set forth in Section 5.01 7.1 of the Company Disclosure Schedule Letter) or as consented required by applicable Law or the regulations or requirements of any stock exchange or regulatory organization applicable to in writing by the Company or except with Parent’s prior written approval, which approval shall not be unreasonably withheld, 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 and 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 intact their current business organizations, keep available the services of their current officers and employees protect and preserve their relationships the scope and breadth of its assets and the Company Intellectual Property and to preserve its business organization intact and maintain its existing relations and goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors outside counsel, clinical trial investigators or managers of its clinical trials, employees and other material third parties having business dealings with them consultants. Without limiting the generality of the foregoing, and to preserve the goodwill of their respective businesses;
(b) as an extension thereof, the Company shall not, not and shall not permit any of its Subsidiaries to, (i) authorize for issuancefrom the date of this Agreement until the Effective Time, issuedirectly or indirectly, deliverdo, sell or agree to do, any of the following without the prior written consent of Parent:
(a) amend or commit propose to issueamend the certificate of incorporation or bylaws or other comparable governing instruments of the Company or any of its Subsidiaries or amend, sell modify or deliver waive any provision of the Rights Agreement;
(whether through b) acquire (including, without limitation, by merger, consolidation, or acquisition of stock, assets or Intellectual Property or any other business combination) any corporation, partnership, other business organization or any division thereof or any assets or interest in any assets from any other Person in excess of $500,000 individually or $1,000,000 in the issuance aggregate;
(c) split, combine or granting reclassify its outstanding shares of optionscapital stock of the Company nor enter into any agreement with respect to voting of any of its capital stock, commitmentsor any securities convertible into or exchangeable for such shares;
(d) declare, subscriptionsset aside or pay any dividend or other distribution, rights payable in cash, stock, property or otherwise, in respect of the capital stock of the Company or any of its Subsidiaries, other than dividends from its wholly-owned Subsidiaries;
(e) purchase, redeem or otherwise acquire, except in connection with the Company Option Plan, the Preferred Stock or the AZ Note, or permit any of its Subsidiaries to purchase or otherwise), pledge or otherwise encumber acquire any shares of its capital stock or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exchangeable 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 stock;
(f) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or other equity interests encumber any material property or assets or interest therein of the Company or any of its Subsidiaries (includingincluding (i) Intellectual Property material to the business of the Company and its Subsidiaries, without limitationbut excluding non-exclusive Intellectual Property licenses granted in the ordinary course of business to third parties, and (ii) capital stock of any of the Company’s Subsidiaries);
(g) incur any indebtedness for borrowed money or issue any debt securities or warrants or other rights to acquire debt securities of the Company or any of its Subsidiaries or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any other Person, in the case of any of the foregoing, involving an aggregate principal amount or potential guaranteed amount in excess of $500,000 or otherwise incur or modify any material indebtedness or liability;
(h) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests 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 stock of any of its Subsidiaries to split, combine class 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 Voting Debt 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 property 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 Agreementin accordance with the Rights Agreement and other than shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Stock Plan or upon conversion of the Convertible Notes, the AZ Note or the Preferred Stock);
(i) make or agree to make any capital expenditures other than any such expenditure (A) not in excess of $200,000 individually or $1,000,000 in the aggregate or (B) in conformance with the Draft ET Meeting 2006 Plan Review, dated December 7, 2005, furnished to Parent prior to the date hereof;
(j) waive any benefits of, agree to modify in any respect, fail to enforce or consent to any matter with respect to which consent is required under any (i) standstill or similar agreement containing provisions prohibiting a third party from purchasing the capital stock or assets of the Company or any of its Subsidiaries or otherwise seeking to influence or exercise control over the Company or any of its Subsidiaries and to which the Company or any of its Subsidiaries is a party or (ii) confidentiality, non-solicitation or similar agreements to which the Company or any of its Subsidiaries is a party, excluding, however, waivers of confidentiality relating to non-material Intellectual Property in the ordinary course of business consistent with past practice;
(k) make any change in accounting practices, policies or principles, except as required by GAAP or by Law or a Governmental Entity as concurred to by the Company’s independent auditors;
(l) enter into, modify, amend or terminate, or waive, release or assign any material rights or claims under (i) any Contract pursuant to which the Company, any of its Subsidiaries or any other party thereto has material continuing obligations, rights or interests relating to research, development, clinical trial, distribution, supply, manufacturing, marketing or co-promotion of, or collaboration with respect to, any product or product candidate for which the Company or any of its Subsidiaries is currently engaged in research and development (excluding (A) clinical study agreements with clinical trial sites, (B) non-disclosure agreements (other than non-disclosure, standstill and exclusivity agreements relating to potential business combinations or acquisitions involving the Company or any of its Subsidiaries or similar transactions), (C) Contracts with independent contractors or vendors providing for services to the Company or any of its Subsidiaries (other than material manufacture or supply services Contracts or material Contracts with contract research organizations for clinical trials related services), and (D) customary material transfer Contracts (other than material transfer Contracts for pre-clinical products or clinical products of the Company or any of its Subsidiaries with commercial, pharmaceutical or biotechnology companies), in the case of each of the foregoing (A), (B), (C) or (D), entered into in the ordinary course of business consistent with past practice); or (ii) any Contract pursuant to which the Company, any of its Subsidiaries or any other party thereto has, or will have, material continuing obligations, rights or interests;
(m) make any material loan, advance, capital contribution to, or investment in, any Person other than (i) loans, advances or capital contributions to, or investments in, wholly-owned Subsidiaries of the Company and (ii) loans, advances or capital contributions to, or investments in, any other Person in an amount not in excess of $250,000 in the aggregate;
(n) enter into, modify, amend or terminate any Contract or waive, release or assign any rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, released or assigned would be reasonably likely to (i) adversely affect the Company (or, following the Merger, Parent or any Affiliates of Parent) in any material respect, (ii) impair the ability of the Company to perform its obligations under this Agreement in any material respect, (iii) prevent or materially delay or impair the consummation of the Merger and the other transactions contemplated by this Agreement or (iv) limit or restrict the Surviving Corporation, any Affiliate of the Surviving Corporation or any of their successors and assigns from engaging or competing in any line of business, including the research, development and commercialization of any antibody or therapeutic agent directed at a specific antigen or other target or in any therapeutic area, or in any geographic area;
(o) pre-pay any long-term debt or accelerate or delay any material payments or the collection of payment due to the Company, except in the ordinary course of business consistent with past practice;
(p) unless reasonably determined to be beneficial to the Company’s prosecution of its patent or Trademark applications, (i) grant, extend, amend (except as required in the diligent prosecution of the Company Intellectual Property), waive or modify any material rights in or to the Company Intellectual Property, Co-Owned Intellectual Property or Licensed Intellectual Property, (ii) fail to diligently prosecute the Company’s and its Subsidiaries’ patent applications, or (iii) fail to exercise a right of renewal or extension under any material Licensed Intellectual Property;
(q) (i) increase the number of employees of the Company and the Company Subsidiaries by more than 4.5%, based on the number of employees employed by the Company and the Company Subsidiaries as of the date hereof, or (ii) enter into an employment agreement or relationship, other than an “at will” employment relationship, with any Person;
(r) except as required pursuant to existing written, binding agreements in effect prior to the date hereof and set forth in Section 5.01(i) 5.8 of the Company Disclosure ScheduleLetter, the Company shall not, and shall not permit any as provided in Section 4.5 of its Subsidiaries tothis Agreement or as otherwise required by applicable Law or tax qualification requirement, (i) enter intogrant or provide or adopt a plan intended to grant or provide any retention, severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or materially amendmake any new equity awards to any director, modify officer or supplement employee of the Company or any Contract outside of its Subsidiaries, except for increases in base salary in the ordinary course of business consistent with past practice under which for employees who are not officers that do not exceed, on average, 5.0% of the Company or any base salary 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 those receiving such rights or claims arise under a Contract or otherwise);
(j) the Company shall notsalary increases, and shall that the increases are 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 being given 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 terminatedpromotional increases, (iii) maintain all Leased Real Property (includingestablish, without limitationadopt, amend or terminate any Company Benefit Plan or amend the furnitureterms of any outstanding equity-based awards, 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) paytake any action to accelerate the vesting or payment, prior or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, to the imposition of extent not already provided in 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 toBenefit Plan, (iv) materially amend change any currently existing labor actuarial or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment assumptions used to or relating calculate funding obligations with respect to any labor union, Company Benefit Plan or (ii) enter into any labor to change the manner in which contributions to such plans are made or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union the basis on 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 hereofsuch contributions are determined, except as may be required as a result of a change in by GAAP or applicable Law Laws; or in GAAP;
(nvi) the Company shall notissue or forgive any loans to directors, and shall not permit any of its Subsidiaries toofficers, take, contractors 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 employees of the Company or any of its Subsidiaries;
(ps) communicate with Company employees regarding the compensation, benefits or other treatment they will receive in connection with the proposed Merger, unless any such communications are consistent with prior directives or documentation provided to the Company by Parent (in which case, the Company shall provide Parent with prior notice of and the opportunity to review and comment upon any such communications);
(it) use its commercially reasonable efforts tomake any material Tax election or settle or compromise any material liability for Taxes, and shall cause its Subsidiaries change any annual Tax accounting period (except as required by Law), change any Tax accounting method (except as required by Law), file any material amended Tax Return, enter into any closing agreement relating to use their respective commercially reasonable efforts toany material Tax, prevent surrender any right to claim a material Tax refund or consent to any extension or waiver of the termination statute of limitations period applicable to any material Tax claim or assessment;
(u) in respect of any Contract with any Significant CustomerContract, (ii) not, and shall cause its Subsidiaries not to, amend or modify any Contract with any Significant Customer, other than on terms substantially equivalent grant rights thereunder to, or more beneficial on balance to accept the Company designation thereunder of, any newly proposed antigen, which grant or designation would limit or restrict Parent or any of its Subsidiaries Affiliates (other than, following the Effective Date, the Company and its Subsidiaries) from researching, developing or commercializing any antibody or other therapeutic agent directed at such antigen, for any therapeutic area or in any geographic area, unless and only to the extent that any such failure to make such grant or acceptance will constitute a breach under such Contract and provided that the Company has provided to Parent at least 10 business days' prior written notice of any such grant or acceptance, which notice shall identify the antigen proposed to be designated, unless such disclosure is prohibited by 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 aggregateContract; andor
(qv) the Company shall not, and shall not permit any of its Subsidiaries to, agree authorize or commit enter into an agreement to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Amgen 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 hereof and prior to the Effective Time (unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or until termination of delayed) and except as otherwise expressly set forth in this Agreement in accordance with Article 7 hereofAgreement):
(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 the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) the Company shall not, and it shall not (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend its Organizational Documents or amend, modify or terminate the Rights Agreement; (C) other than in the case of any direct or indirect wholly owned Subsidiary, split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect A-24 wholly owned Subsidiaries and other than regular quarterly cash dividends not in excess of $0.165 per Share; (E) repurchase, redeem or otherwise acquire, except in connection with the Stock Plans, or 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)otherwise acquire, 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 into or exchangeable 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 its capital stock or other equity interests of the Company or stock;
(iii) neither it nor any of its Subsidiaries shall (includingA) issue, without limitationsell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock or other equity interests of the Company any class or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company Voting Debt or any of its Subsidiaries, other property or assets (other than Shares issuable under the Stock Plans) except (A) as required by this Agreement, (B) as set forth in Section 5.01(b6.1(a)(iii) of the Company Disclosure Schedule; (B) other than as set forth on Section 6.1(a)(iii)(B) of the Company Disclosure Schedule, products sold to customers in connection with accelerating the vesting schedules ordinary and usual course of business (without limitation as to dollar amount) or otherwise in the Options to the extent required by the Stock Plans or the agreements pursuant to which such Options were granted or (C) ordinary and usual course of business and not in connection with terminating the Options and the Stock Plans;
(c) the Company shall not (i) an aggregate amount of more than $5,000,000, transfer, lease, license, guarantee, sell, transfer or mortgage, pledge, dispose of 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 encumber any other fashion the corporate structure property or ownership assets (including capital stock of any of its Subsidiaries); (C) incur or modify any indebtedness other than tax-exempt indebtedness, (ii) amend indebtedness existing solely between the Company and its wholly owned Subsidiaries or otherwise change its certificate between such wholly owned Subsidiaries or indebtedness in an aggregate amount less than $2,000,000; provided that prior to incurring any indebtedness, if practicable, the Company shall provide Parent with a reasonable right of incorporation or bylaws or permit consultation prior to incurring any such indebtedness; provided, further, that the foregoing right of its Subsidiaries to amend its articles of incorporation, or bylaws or (iii) split, combine or reclassify any shares of its capital stock, and consultation shall not permit apply in the case of indebtedness in respect of letters of credit, guarantees or performance bonds or indebtedness existing solely between the Company and its wholly owned Subsidiaries or between such wholly owned Subsidiaries; (D) make or authorize or commit for any of its Subsidiaries to split, combine or reclassify any shares of its capital stock;
(d) expenditures other than quarterly dividends not as set forth on Schedule 6.1(a)(iii) of the Company Disclosure Schedule or which, individually, is in excess of $0.075 per Common Share declared and paid consistent with past practices1,000,000 or, in the aggregate, are in excess of $5,000,000; provided that prior to making any expenditure not set forth on Schedule 6.1(a)(iii) of the Company Disclosure Schedule, if practicable, the Company shall notprovide Parent with a reasonable right of consultation prior to making any such expenditure; and (E) by any means, and shall not permit make any of its Subsidiaries to, declare, set aside or pay any dividends on (whether in cash, stock or other property)acquisition of, or make any other distributions investment 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 stock of or agree to other interest in, any increase in any manner the compensation other Person or benefits of any current or former director, officer or employee, (ii) except increases in the ordinary and usual course of business consistent with past practice, increases and bonuses expressly required under existing employment agreements, bonus plans and assets of any 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, Person;
(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 (iiiiv) except as set forth in Section 5.01(e6.1(a)(iv) of the Company Disclosure Schedule, or 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) terms of this Agreement, neither the Company it nor any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation(A) terminate, dissolutionestablish, mergeradopt, 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, make any new grants or materially amendawards under, modify amend or supplement otherwise modify, any Contract outside Compensation and Benefit Plans except as required by law, (B) other than in the ordinary and usual course of business consistent with past practice under which and the Company or Company's compensation budget with respect to employees at a compensation level of less than $80,000 a year, increase the compensation of any employee, (C) hire any employee at a compensation level expected to be more than $100,000 a year;
(v) neither it nor any of its Subsidiaries shall have monetary obligations settle or compromise any material claims or litigation or, except in excess the ordinary and usual course of $25,000 (except as may be necessary for the Company to comply with its obligations hereunder)business modify, amend or (ii) waive, release, grant, assign, modify or transfer terminate any of its material Contracts or waive, release or assign any material rights or claims (whether such rights or claims arise under a Contract or otherwise)claims;
(jvi) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, authorize or shall make any capital expenditures (material Tax election or file any material income Tax Refund or implement or adopt any change in its accounting principles or material accounting practices, in all cases other than pursuant to commitments prior to the date hereof as may be required by applicable Laws 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 aggregateGAAP;
(kvii) 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 neither 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 nor 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 that it reasonably expects 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 cause any of its Subsidiaries;representations and warranties herein to become untrue in any material respect; and
(pviii) 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 neither it nor any of its Subsidiaries than, the terms of such Contract prior to the making of such amendment will authorize 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 into an agreement to do any of the foregoing.
(b) Parent covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless the Company shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed) and except as otherwise expressly set forth in this Agreement):
(i) the business of it and its Subsidiaries shall be conducted in the ordinary course and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(ii) it shall not (A) split, combine or reclassify its outstanding shares of capital stock; or (B) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries;
(iii) it shall not (A) enter into any transaction, other than as contemplated pursuant to this Agreement, to the extent any such transaction would require approval of the stockholders of Parent under applicable law or stock exchange rules; or (B) enter into an agreement relating to any acquisition, merger, consolidation or purchase that would reasonably be expected to (I) impose any material delay in the obtaining of, or significantly increase the risk of not obtaining, any authorizations, consents, orders, declarations or approvals of any Governmental Entity necessary to consummate the Merger or the expiration or termination of any applicable waiting period, (II) significantly increase the risk of any Governmental Entity entering an order prohibiting the consummation of the Merger, or (III) significantly increase the risk of not being able to remove any such order on appeal or otherwise;
(iv) amend Parent's or Merger Sub's Organizational Documents;
(v) neither it nor any of its Subsidiaries shall take any action or omit to take any action that it reasonably expects would cause any of its representations and warranties herein to become untrue in any material respect; and
(vi) neither it nor any of its Subsidiaries will authorize or enter into an agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations. 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 by Parent, which consent, solely, with respect to clauses (e)(iv), (l), (m), (u) or, with respect to the foregoing, clause (z) below, shall not be unreasonably withheld) 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 subsidiaries shall be conducted, and the books and records of the Company and its Subsidiaries shall be maintained, conducted only in the ordinary and usual course of business and the Company and its Subsidiaries 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 organizations 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 substantially intact the goodwill of their respective businessesthose having business relationships with it;
(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 Subsidiariessubsidiaries, 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, including without limitation, limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of prior to the date hereof; hereof or (ii) repurchase, redeem or otherwise acquire acquire, or permit any of its subsidiaries to repurchase, redeem or otherwise acquire, any shares of the capital stock or other equity interests of the Company or any of its Subsidiaries 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 Subsidiariessubsidiaries); 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 subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its Subsidiariessubsidiaries, (ii) amend or otherwise change its certificate articles of incorporation or bylaws or permit any of its Subsidiaries subsidiaries to amend its articles of incorporation, bylaws or bylaws equivalent organizational documents or (iii) split, combine or reclassify any shares of its capital stock, and shall not permit any of its Subsidiaries 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 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 subsidiaries to the Company or with respect to other wholly owned Subsidiaries of the Company consistent with past practicescapital stock);
(e) except as set forth in Section 5.01(e) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries subsidiaries shall (i) grant or agree to any increase in any manner the compensation or fringe benefits of of, or pay any bonus to, any current or former director, officer or employee, employee except increases in the ordinary course of business consistent with past practice, for increases and bonuses expressly contemplated by or 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 periodic increases consistent with accelerating the vesting schedules past practice for employees other than officers and directors of the Options and terminating the Options and the Stock PlansCompany, (ii) subject to the covenants set forth in clause (i) of this Section 5.01(e), enter into any new or materially amend any existing Contractemployment, transaction, commitment severance or arrangement termination agreement with any current or former director, officer, officer or employee or affiliate of the Company or any of its SubsidiariesCompany, 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 law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 2.02 hereof)Agreement, become obligated under any Benefit Plan that was not in existence on the date hereof or amend or materially amend, modify or terminate, or pay any benefit that is not required by, terminate 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, (iv) hire any employee (A) except the replacement of any current employee of the Company or any of its subsidiaries whose employment with the Company or any of its subsidiaries is terminated for any reason (with such replacement employee receiving substantially similar compensation and benefits as such terminated employee) or (B) new employees having anticipated annual compensation (including bonuses) not exceeding $100,000 individually or $500,000 in the aggregate, or (v) except as may be required to comply with applicable law and except as provided in this Agreement, pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise contemplated by this Agreement);
(f) the Company shall not, and shall not permit any of its Subsidiaries 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 all or substantially all 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 thereof, other than acquisitions purchases of inventory or purchases made supplies 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;
(g) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets other than (xi) 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) and (iii) inventory in the ordinary course of business consistent with past practice;
(h) the Company shall not, and shall not permit any of its subsidiaries to, incur, assume, be responsible for assume or pre-pay any Indebtedness, indebtedness for borrowed money or enter into any agreement to, to incur, assume, be responsible for assume or pre-pay any Indebtednessindebtedness for borrowed money, or guarantee, or agree to guarantee, any such Indebtedness indebtedness or Liabilities or obligations obligation of another person, or 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, 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; , other than the incurrence of indebtedness under the Company’s existing revolving credit facility up to the limits of such facility as of the date hereof.
(i) the Company shall not, and shall not permit any of its subsidiaries to, make or (y) sellforgive any loans, leaseadvances or capital contributions to, license or subject to any Lien or otherwise dispose guarantees for the benefit of, or agree to sell, lease or subject to any Lien or otherwise dispose ofinvestments in, any of its properties person or assets in excess of $25,000 individually or $50,000 in the aggregate entity (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 loans between or among the Company and any of its wholly-owned subsidiaries and except for cash advances to employees for reimbursable travel and other reasonable business expenses in the Company’s Subsidiariesordinary course of business);
(hj) the Company shall not, and shall not permit any of its subsidiaries to, assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except for the obligations of the subsidiaries of the Company permitted under this Agreement;
(k) neither the Company nor any of its Subsidiaries 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 subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as Agreement or set forth in Section 5.01(i5.01(k) of the Company Disclosure Schedule, );
(l) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, (i) enter into, or materially amend, modify or supplement any Material Contract or License Agreement outside of 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), hereunder or as set forth in Section 5.01(l) of the Company Disclosure Schedule) or (ii) waive, release, grant, assign, modify assign or transfer any of its material rights or claims (whether such rights or claims arise under a Contract Material Contract, License Agreement or otherwise);
(jm) the Company shall not, and shall not permit any of its Subsidiaries 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(j5.01(m) of the Company Disclosure Schedule by categorySchedule) 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 $500,000 750,000 in the aggregateaggregate for the Company and its subsidiaries taken as a whole;
(kn) the Company shall, and its subsidiaries shall cause comply in all material respects with their obligations under the Material Contracts and License Agreements as such obligations become due;
(o) the Company and its Subsidiaries to, subsidiaries (i) shall continue in force with its existing or other reputable insurance with good and responsible companies, adequate insurance companies adequately covering risks of such types and in such amounts as are consistent with the Company’s past practices and its Subsidiaries’ past practices, (ii) use reasonable best efforts shall not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated;
(p) the Company shall not, and shall not permit any of its subsidiaries to, enter into, amend, modify or supplement any material agreement, transaction, commitment or arrangement with any current or former officer, director, employee or other affiliate of the Company or any of its subsidiaries (or any affiliate of any of the foregoing) other than agreements, transactions, commitments and arrangements (i) permitted by Section 5.01(e) hereof or (ii) as otherwise expressly contemplated by this Agreement;
(q) the Company shall not, and shall not permit any of its subsidiaries to, establish or acquire (i) any subsidiary other than wholly-owned subsidiaries or (ii) subsidiaries organized outside of the United States and its territorial possessions;
(r) the Company shall not, and shall not permit any of its subsidiaries to, amend, modify or waive any term of any outstanding security of the Company or any of its subsidiaries, except as required by this Agreement;
(s) the Company shall, and shall cause its subsidiaries to, (iiii) maintain all Leased Real Property any real property to which the Company and any of its subsidiaries have ownership or a leasehold interest (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition in all material respectscondition, subject to reasonable wear and tear and subject to any casualty or condemnation and Permitted Lienscondemnation, subject to the expiration of real property leases in accordance with their terms, and (ivii) pay, prior to the imposition of any Lien or timely pay all material penalty all taxes, water and sewage rents, assessments and insurance premiums affecting such real property or contest them and (iii) timely comply in good faithall material respects with the terms and provisions of all leases, contracts and agreements relating to such real property and the use and operation thereof;
(lt) 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 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 agreementunion, memorandum or understanding, grievance settlement or commitment, except, in each case, except as required by LawLaw or as set forth in Section 5.01(t) of the Company Disclosure Schedule;
(mu) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, settle or compromise any pending or threatened suit, action, claim or litigation (except in the ordinary course of business and with prior written notice to Parent);
(v) 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 and its Subsidiaries subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law law or in GAAPUnited States generally accepted accounting principles;
(nw) the Company shall not, and shall not permit any of its Subsidiaries 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 revalue in any material respect at, or as of any time prior to, the Effective Time or result in any of its assets, including, without limitation, writing down 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 value of inventory in any material respect at manner or the write-off of notes or accounts receivable in any such time or to prevent any such condition from not being satisfiedmaterial manner;
(ox) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, make or change any material tax election election, make or change an annual any method of accounting period with respect to Taxes, file any amended Tax Return, enter into any closing agreement, Return or 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 Subsidiariesmaterial tax liability;
(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
(qy) the Company shall not, and shall not permit any of its Subsidiaries subsidiaries to, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice; and
(z) 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 SECTION 6.01 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 ARTICLE 8 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, conducted 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, including without limitation, limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; hereof or (ii) repurchase, redeem or otherwise acquire acquire, or permit any of its Subsidiaries to 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 1 contract
Sources: Acquisition Agreement (Prentice Capital Management, LP)
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 6.01 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 8 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, conducted 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, including without limitation, limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding as of the date hereof; hereof or (ii) repurchase, redeem or otherwise acquire acquire, or permit any of its Subsidiaries to 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 charter, articles of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, bylaws or bylaws equivalent organizational documents 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 fringe benefits of of, or pay any bonus to, any current or former director, officer or employee, employee except increases in the ordinary course of business consistent with past practicepractice of less than 10% of each such individual's salary for non-officer employees, increases and bonuses expressly contemplated by or required under existing employment agreements, bonus plans and other agreements and arrangements listed or described in Section 5.01(e6.01(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 Contractemployment, transactionconsulting, commitment severance, termination, change-of-control or arrangement indemnification agreement with any current or former director, officer, officer or employee or affiliate of the Company or any of its SubsidiariesCompany, or (iii) except as set forth in Section 5.01(e6.01(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 3.02 hereof), become obligated under any Benefit Plan that was not in existence on the date hereof or amend or amend, modify or terminate, or pay any benefit that is not required by, terminate 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 (iv) except as may be required to comply with applicable Law and except as provided or otherwise contemplated in this Agreement (including, without limitation, Section 3.02 hereof), pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise contemplated by this Agreement), except in connection with accelerating the vesting schedules of the Options and terminating the Options and the Stock Plans;
(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 '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, sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets other than (xi) pursuant to existing contracts and commitments described in Section 6.01(g) of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets, including those described in Section 6.01(g) of the Company Disclosure Schedule), (iii) inventory in the ordinary course of business consistent with past practice, (iv) Permitted Liens, (v) Liens relating to Taxes that are not yet due and payable or otherwise being contested in good faith and as to which appropriate reserves have been established by the Company in accordance with U.S. generally accepted accounting principles and (vi) other than non-taxable transfers by or among the Company's Subsidiaries;
(h) the Company shall not, and shall not permit any of its Subsidiaries to, issue any letter of credit other than pursuant to the issuance of letters of credit in the ordinary course of business consistent with past practices of the Company and its Subsidiaries in an amount not to exceed $10,000,000 in the aggregate, incur, assume, be responsible for assume or pre-pay any Indebtedness, enter into any agreement to, to incur, assume, be responsible for assume or pre-pay any Indebtedness, guarantee, or agree to guarantee, any such Indebtedness or Liabilities or obligations obligation 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; ;
(i) the Company shall not, and shall not permit any of its Subsidiaries to, make or (y) sellforgive any loans, leaseadvances or capital contributions to, license or subject to any Lien or otherwise dispose guarantees for the benefit of, or agree to sell, lease or subject to any Lien or otherwise dispose ofinvestments in, any of its properties person or assets in excess of $25,000 individually or $50,000 in the aggregate entity, other than (i) loans or advances in the ordinary course of business to facilitate construction or renovation of stores pursuant to existing contracts and commitments described Material Contracts in Section 5.01(g) of an amount not to exceed $2,000,000 in the Company Disclosure Scheduleaggregate, (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 such loans between or among the Company and any of its wholly-owned Subsidiaries and (iii) cash advances to the Company’s Subsidiaries's or any such Subsidiary's employees for reimbursable travel and other business expenses incurred in the ordinary course of business consistent with past practice;
(hj) the Company shall not, and shall not permit any of its Subsidiaries to, assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except for the obligations of the Subsidiaries of the Company permitted under this Agreement;
(k) 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, 41 recapitalization or other reorganization of the Company or any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(il) 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), (ii) enter into, or materially amend, modify or supplement, any Lease or Material Contract, or (iiiii) waive, release, grant, assign, modify assign or transfer any of its material rights or claims (whether such rights or claims arise under a Contract or otherwise);
(jm) 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(j6.01(m) 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 1,000,000 in the aggregate;
(kn) except for customer contracts entered into in the ordinary course of business, the Company shallshall not, and shall cause not permit its Subsidiaries to, renegotiate or enter into any new license, agreement or arrangement relating to any Intellectual Property;
(o) the Company and its Subsidiaries (i) shall 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 's past practices and its Subsidiaries’ past practices, (ii) shall use reasonable best efforts not to permit any insurance policy naming it as beneficiary or loss payable payee to be canceled or terminated;
(p) the Company shall not, and shall not permit any of its Subsidiaries to, establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries or (ii) Subsidiaries organized outside of the United States and its territorial possessions;
(q) the Company shall not, and shall not permit any of its Subsidiaries to, amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (i) as required by this Agreement, (ii) except as set forth in Section 6.01(q) 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 (iii) in connection with terminating the Options and the Stock Plans;
(r) the Company shall, and shall cause its Subsidiaries to, (i) maintain all Leased Real Property any real property of which the Company and any of its Subsidiaries have ownership or a leasehold interest (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 terms or (ivii) 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;
(ls) 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) enter into or 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 Law;
(mt) the Company shall not, and shall not permit any of its Subsidiaries to, conduct any plant closing or layoff that could implicate the WARN Act;
(u) the Company shall not, and shall not permit any of its Subsidiaries to, settle or compromise any pending or threatened suit, action, claim or litigation, except with respect to the settlement or compromise of any such matter which does not involve equitable or injunctive relief and does not obligate the Company and its Subsidiaries to make aggregate cash payments exceeding $25,000 individually or $125,000 in the aggregate;
(v) except as set forth in Section 6.01(v) of the Company Disclosure Schedule, 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 and its Subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in GAAPU.S. generally accepted accounting principles;
(nw) the Company shall not, and shall not permit any of its Subsidiaries to, revalue in any material respect any of its assets (including, without limitation, writing down or writing off any notes or accounts receivable in any material manner), except as required by U.S generally accepted accounting principles;
(x) the Company shall not, and shall not permit any of its Subsidiaries to, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than (i) the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of Liabilities reflected on or reserved in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice, (ii) the payment of the Company's Expenses (as defined herein), including the payment of the fees and expenses of the Special Committee and the costs, fees and expenses incurred by the Special Committee or (iii) the payment of claims under any of the Benefit Plans;
(y) the Company shall not, and shall not permit any of its Subsidiaries to, knowingly and intentionally 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 to the Offer or any conditions to the Merger set forth in Article 6 7 not being satisfied, or knowingly and intentionally 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;
(oz) the Company shall not, and shall not permit any of its Subsidiaries to, to make or change any material tax election or change an annual accounting period with respect to Taxes, adopt or change any accounting method, 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(o6.01(z) 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: Acquisition Agreement (Goodys Family Clothing Inc /Tn)
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 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 this Agreement in accordance with Article 7 hereof):
(a) Time, 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 and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially reasonable respective best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them associates, and to preserve the goodwill of their respective businesses;
(b) neither the Company shall not, and shall not permit nor any of its Subsidiaries toshall take any action or omit to take any action that would cause any of its representations and warranties herein to become untrue in any material respect. By way of amplification of the foregoing and not limitation, neither the company nor any of its Subsidiaries shall, between the date of this Agreement and the Effective Time, directly or indirectly, take any action, including but not limited to the following, except with the prior consent of a Designated Officer (as defined below):
(a) it shall not (i) authorize for issuanceamend its articles of incorporation or by-laws, issue, deliver, sell or agree or commit except as may be required to issue, sell or deliver (whether through increase the issuance or granting number of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock Common Stock in connection with the conversion of the Convertible Loan, the Series A Preferred or the capital stock of any of its SubsidiariesSeries B Preferred, 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 in each case outstanding as of the date hereof; (ii) split, combine or reclassify its outstanding shares of capital stock; (iii) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock; or (iv) repurchase, redeem or otherwise acquire any shares of the capital stock acquire, or other equity interests of the Company or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(includingb) neither it nor any of its Subsidiaries shall (i) issue, without limitationsell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other equity interests property or assets, except for (x) issuances of Common Stock upon conversion of the Company Convertible Loan, the Series A Preferred or the Series B Preferred, in each case outstanding on the date hereof, and (y) issuances of Series B Preferred upon exercise of warrants outstanding on the date hereof; (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries); or (iii) amendmake or authorize or commit for any capital expenditures or, modify by any means, make any acquisition of, or waive investment in, assets or stock of or other interest in, any term of any outstanding security of the Company other Person 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 Plansentity;
(c) the Company shall not (i) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by neither it in nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or alter through mergerawards under, 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 modify, any Company Compensation and Benefit Plans (including, without limitation, any grant or issuance of incorporation new Options, any amendment or bylaws changes to the terms of any Options or permit any repricing of its Subsidiaries to amend its articles of incorporationOptions), or bylaws increase the salary, wage, bonus or (iii) split, combine or reclassify other compensation of any shares of its capital stock, and shall not permit any of its Subsidiaries to split, combine or reclassify any shares of its capital stockemployees;
(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 neither it nor any of its Subsidiaries toshall settle or compromise any material claims or litigation or modify, declare, set aside amend or pay any dividends on (whether in cash, stock or other property), or make any other distributions in respect of, terminate any of its capital stock (except for dividends paid by direct material Contracts or indirect wholly owned Subsidiaries to the Company waive, release or to other wholly owned Subsidiaries of the Company consistent with past practices)assign any material rights or claims;
(e) neither the Company it 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 Tax election 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 a beneficiary or loss loss-payable payee to be canceled cancelled or terminated, (iii) maintain all Leased Real Property (including, without limitation, terminated except in the furniture, fixtures, equipment ordinary 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 usual course 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;
(lf) except as set forth in Section 5.01(lmake any change, other than required by GAAP, to its accounting principles or procedures; and
(g) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, (i) materially amend any currently existing labor will authorize 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 an 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
Sources: Merger Agreement (Sohu Com Inc)
Interim Operations. Except (a) The Company shall, from and after the date of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing, with 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 applicable Law, conduct its business in Section 5.01 the Ordinary Course of the Company Disclosure Schedule or as consented to in writing by ParentBusiness 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 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 and its Subsidiaries shall use their commercially reasonable best efforts to to, preserve its business organization intact their current business organizationsand maintain satisfactory 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 present employees and agents. Without limiting the generality of and in furtherance of the foregoing sentence, from the date of this Agreement until the Effective Time, except as otherwise expressly required by this Agreement, required by applicable Law, required by the express terms of any Company Material Contract made available to Parent, as approved in writing by Parent (with such approval not to be unreasonably withheld, conditioned or delayed) or set forth in the corresponding subsection of Section 8.1(a) of the Company Disclosure Letter, the Company shall not:
(i) adopt or propose any change in its Organizational Documents;
(ii) form, incorporate or organize any Subsidiaries;
(iii) merge or consolidate the Company with any other Person or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material third parties having business dealings with them and to preserve the goodwill of their respective changes or restrictions on its assets, operations or businesses;
(biv) acquire assets from any other Person, other than acquisitions of goods in the Ordinary Course of Business or assets valuing less than $100,000 individually or $250,000 in the aggregate;
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of the Company, securities convertible or exchangeable into or exercisable for any such shares of capital stock, or any options, warrants or other rights of any kind to acquire any such shares of capital stock or such convertible or exchangeable securities (other than (A) the Support Agreement and (B) the issuance of shares of capital stock in respect of Company shall notEquity Awards outstanding as of the date of this Agreement or issued after the date of this Agreement in accordance with Section 8.1(a)(xxiv), in each case in accordance with their terms and, as applicable, the Incentive Plans as in effect on the date of this Agreement;
(vi) enter into any Contracts or other arrangements between the Company, on the one hand, and shall any director or executive officer of the Company or any Person beneficially owning five percent or more of the outstanding Shares or shares of common stock of any of their respective Affiliates, on the other hand, except for compensatory arrangements consistent with Section 8.1(a)(xxiv) or entered into in the Ordinary Course of Business with Company Employees consistent with Section 8.1(a)(xxiv) and transactions with Parent or its Affiliates;
(vii) create or incur any Encumbrance that is not permit incurred in the Ordinary Course of Business on any assets of the Company;
(viii) make any loans, advances, guarantees or capital contributions in excess of $50,000 to or investments in any Person;
(ix) 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 (including with respect to the Company, for the avoidance of doubt, Shares);
(ix) authorize for issuancereclassify, issuesplit, delivercombine, sell subdivide or agree or commit to issueredeem, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to 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 Subsidiaries, any other securities or any securities convertible or exchangeable into 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;
(dxi) incur any Indebtedness (including the issuance of any debt securities, warrants or other than quarterly dividends not rights to acquire any debt security) in excess of $0.075 per Common Share declared 50,000;
(xii) enter into any Contract that would have been a Company Material Contract had it been entered into prior to this Agreement, other than Contracts entered into in the Ordinary Course of Business with payment obligations not to exceed $100,000;
(xiii) other than with respect to Company Material Contracts related to Indebtedness, which shall be governed by Section 8.1(a)(xi), terminate or amend, modify, supplement or waive in any material respect, or assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Company Material Contract, except for (x) expirations of any such Contract in the Ordinary Course of Business and paid consistent in accordance with past practicesthe terms of such Contract with no further action by the Company or other party to such Contract, except for any ministerial actions, (y) non-exclusive licenses under Intellectual Property Rights owned or purported to be owned by the Company, in each case, granted in the Ordinary Course of Business or (z) terminations, amendments, modifications, assignments, conveyances, transfers or expirations where, concurrent therewith, the Company enters into a replacement Contract providing substantially similar property, products or services on substantially similar terms;
(xiv) cancel, modify or waive any debts or claims held by the Company in excess of $100,000 or waive any material rights;
(xv) except as expressly provided for by Section 8.11, amend, modify, terminate, cancel or let lapse an Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement self-insurance programs are established by the Company or replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing 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, which shall notbe governed by Section 8.15, and shall not permit settlement of trade accounts payable in the Ordinary Course of Business, settle or compromise any Proceeding for an amount in excess of its Subsidiaries to, declare, set aside $100,000 individually or pay any dividends on $250,000 in the aggregate;
(whether in cash, stock or other property), or xvii) make any other distributions in changes with respect of, any to the legal structure of its capital stock (except for dividends paid by direct or indirect wholly owned Subsidiaries to the Company or to their accounting policies or procedures, except as required by changes in applicable Law or GAAP;
(xviii) enter into any line of business in any geographic area other wholly owned Subsidiaries than the existing lines of business of the Company consistent with past practices)and lines of products and services reasonably ancillary to any existing line of business, in any geographic area for which a License (if one is required) authorizing the conduct of such business, product or service in such geographic area is held by it, or, except as currently conducted, engage in the conduct of any business in any jurisdiction that would require the receipt or transfer of any License issued by any Governmental Entity;
(exix) neither make any material changes to the existing lines of business of the Company nor or adopt or make any material modifications to the Company’s strategic plan;
(xx) make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended material Tax Return, enter into any closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a material refund or take any action which would be reasonably expected to result in an increase in the Tax liability of the Company, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent or its Subsidiaries shall Affiliates;
(ixxi) grant transfer, sell, lease, divest, cancel, allow to lapse or agree expire, or otherwise dispose of or transfer, or permit or suffer to exist the creation of any Encumbrance upon, any material assets (tangible or intangible, including any Intellectual Property Rights), Licenses, product lines or businesses of the Company, except in connection with services provided in the Ordinary Course of Business or sales of obsolete assets;
(xxii) cancel, abandon or otherwise allow to lapse or expire any Company Intellectual Property Rights, except in the Ordinary Course of Business with respect to Intellectual Property Rights that are not material to any business of the Company;
(xxiii) amend or fail to comply with the Privacy and Security Policies, or alter the operation or security of any IT Assets owned, used or held for use in the operation of the Company’s business, in each case, in a manner that would be less protective of any IT Assets, Personal Information or any other confidential or proprietary information that is in the Company’s possession or control, including any information stored on or processed by such IT Assets;
(xxiv) except as required pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement and set forth in Section 8.1(a)(xxiv) of the Company Disclosure Letter, (A) increase in any manner the compensation or benefits fees, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any current Company Employee, (B) become a party to, establish, adopt, amend, commence participation in or former director, officer terminate any Company Benefit Plan or employeeany arrangement that would have been a Company Benefit Plan had it been entered into prior to the date of this Agreement, except increases in connection with annual renewals or as required to comply with applicable Law, (C) grant any new awards, or amend or modify the ordinary course terms of business consistent with past practiceany outstanding awards, increases and bonuses expressly required under existing employment agreementsany Company Benefit Plan, bonus plans and other agreements and arrangements listed or described in (D) except as provided on Section 5.01(e5.3(a)(i) of the Company Disclosure Schedule and except in connection with accelerating Letter, take any action to accelerate the vesting schedules or lapsing of restrictions or payment, or fund or in any other way secure the Options and terminating the Options and the Stock Planspayment, of compensation or benefits under any Company Benefit Plan, (iiE) enter into change any new actuarial or materially amend other assumptions used to calculate funding obligations with respect to 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 applicable Law to be canceled funded or terminated, (iii) maintain all Leased Real Property (including, without limitation, change the furniture, fixtures, equipment and systems therein) manner in its current condition in all material respects, subject which contributions to reasonable wear and tear and subject to any casualty such plans are made 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 basis on which 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 hereofcontributions are determined, except as may be required as a result by GAAP, (F) forgive any loans or make any extensions of credit in the form of a change personal loan to any Company Employee (other than routine travel advances issued in applicable Law the Ordinary Course of Business), (G) hire any employee or engage any independent contractor (who is a natural person) with an annual salary or wage rate or consulting fees and target cash bonus opportunity in GAAPexcess of $100,000 or (H) terminate the employment of any executive officer other than for cause;
(nxxv) 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;
(xxvi) fail to maintain policies and procedures designed to ensure compliance with the FCPA and Other Anti-Bribery Laws;
(xxvii) fail to maintain policies and procedures designed to ensure compliance with the Export and Sanctions Regulations in each jurisdiction in which the Company shall not, and shall not permit operates or is otherwise subject to jurisdiction;
(xxviii) take any of its Subsidiaries to, take, action or agree or commit fail 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 IX 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) Nothing set forth in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s 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
Sources: Merger Agreement (Cafepress 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 Merger Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed), and except as otherwise contemplated by this Agreement (including the Shrimp Business Divestiture) 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):Letter:
(ai) it shall operate 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 the ordinary course of business and business, consistent with past practice, and, to the Company and extent consistent with such operation, use its Subsidiaries shall use their commercially reasonable best efforts to to: (A) preserve intact their current the present business organizations, keep available the services of their current officers organization intact; and employees and (B) preserve their all beneficial business relationships with their material all customers, suppliers, licensors, licensees, advertisers, distributors employees and other material third parties others having business dealings with them the business of it and to preserve the goodwill of their respective businessesits Subsidiaries;
(bii) it shall maintain (A) the material assets of the Company shall notin such condition and repair consistent with past practice, and (B) insurance upon all of the material assets of the Company and with respect to the conduct of the business of the Company in full force and effect, comparable in amount, scope, and coverage to that in effect on the date of this Agreement;
(iii) it shall not (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend its certificate of incorporation or bylaws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries; or (E) repurchase, redeem or otherwise acquire, or 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)otherwise acquire, 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 into or exchangeable 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 its capital stock or other equity interests of the Company or stock;
(iv) neither it nor any of its Subsidiaries shall (includingA) issue, without limitationsell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, capital stock or other equity interests 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 stockstock of any class or any Company Voting Debt; (B) grant or sell any option or right to purchase the assets of the Company, and shall not permit except regarding non-material assets in the ordinary course of business, consistent with past practice; or (C) subject any of its Subsidiaries the assets of the Company to splitany further material lien, combine charge, mortgage, pledge, security interest or reclassify any shares similar encumbrance (each, an "Encumbrance"), other than (i) as reflected, reserved or otherwise disclosed in the financial statements included in or incorporated by reference in the Company Reports and (ii) in the ordinary course of its capital stockbusiness, consistent with past practice;
(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);
(ev) neither the Company it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans or pay or promise to pay, any bonus, profit-sharing or special compensation to the Employees or make any increase in the compensation payable or to become payable to any of such employees, except (i) grant or agree for changes that are required by applicable law, (ii) to any increase in any manner satisfy obligations under the compensation or benefits terms of any current agreement or former directorplan in effect as of the date hereof, officer (iii) for increases in compensation that are made in the ordinary course of business consistent with past practice (which shall include normal periodic performance reviews and related compensation and benefit increases) and (iv) for employment arrangements for or employeegrants of awards to, newly hired employees in the ordinary course of business consistent with past practice;
(vi) 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 it nor any of its Subsidiaries shall adopt enter into or put into effect a plan of complete terminate any Company Contract, or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or make any change in any of its Subsidiaries (other than any transaction specifically contemplated by this Agreement)Company Contracts;
(ivii) 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 neither it nor 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 tax election 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 a beneficiary or loss loss-payable payee to be canceled or terminatedterminated without prior notice to Parent, (iii) maintain all Leased Real Property (including, without limitation, except in the furniture, fixtures, equipment ordinary 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 usual course 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;
(lviii) except as set forth in Section 5.01(l) of the Company Disclosure Schedule, the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, (i) materially amend any currently existing labor shall settle 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 compromise any material respect with claims or litigation or, except in the ordinary and usual course of business, waive, release or assign any currently existing collective bargaining agreement, memorandum material rights or understanding, grievance settlement or commitment, except, in each case, as required by Law;claims; and
(mix) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, change any of the accounting policies, practices shall authorize 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 an agreement to do any of the foregoing.
(b) The provisions of this Section 6.1 notwithstanding, nothing in this Agreement shall be construed or interpreted to prevent the Company or any Subsidiary from (i) making, accepting or settling intercompany advances to, from or with one another; (ii) causing any Subsidiary to pay or distribute to the Company all cash, money market instruments, bank deposits, certificates of deposit, other cash equivalents, marketable securities and other investment securities then owned or held by such Subsidiary; or (iii) engaging in any other transaction incident to the normal cash management procedures of the Company and its Subsidiaries, including, without limitation, short-term investments in bank deposits, money market instruments, time deposits, certificates of deposit and bankers' acceptances and borrowings for working capital purposes and purposes of providing additional funds to Subsidiaries made, in each case, in the ordinary course of business, consistent with past practice.
Appears in 1 contract
Sources: Merger Agreement (Baltek Corp)
Interim Operations. Except (a) The Company shall, and shall cause each of its Subsidiaries to, from and after the date of this Agreement and prior to the Effective Time (unless Parent and Merger Sub shall otherwise approve in writing, with 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 applicable Law, conduct its business in Section 5.01 the Ordinary Course of the Company Disclosure Schedule or as consented to in writing by ParentBusiness and, the Company covenants and agrees that during the period from the date of this Agreement 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 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 commercially respective reasonable best efforts to to, preserve its and their business organizations intact their current business organizationsand maintain satisfactory 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 employees and agents. Without limiting the generality of and in furtherance of the foregoing sentence, from the date of this Agreement until the Effective Time, except as otherwise expressly required by this Agreement, required by applicable Law, or as approved in writing by Parent, with such approval not to be unreasonably withheld, conditioned or delayed, the Company shall not and shall cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents other material third parties having business dealings with them and than pursuant to preserve the goodwill of their respective businessestransactions contemplated by this Agreement;
(bii) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliversell, sell or agree or commit to issuepledge, sell or deliver (whether through the issuance or granting of optionsdispose of, commitmentsgrant, subscriptionstransfer, rights to purchase or otherwise)lease, pledge license, guarantee, Encumber, or otherwise encumber enter into any Contract or understanding with respect to the voting of, any shares of its capital stock of the Company (including, for the avoidance of doubt, Company Shares) or the capital stock of any of its Subsidiaries, any other securities or any securities convertible or exchangeable into or exercisable intofor any such shares of capital stock, or any rightsoptions, warrants or options other rights of any kind to acquire, acquire any such sharesshares of capital stock or such convertible or exchangeable securities, securities other than the issuance of shares of capital stock (A) by a Wholly Owned Subsidiary of the Company to the Company or convertible securities another Wholly Owned Subsidiary of the Company, or any other securities or equity equivalents (includingB) in respect of Preferred Shares, without limitationCompany Options, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Warrants and Management Options outstanding as of the date hereof; of this Agreement or issued after the date of this Agreement in each case in accordance with their terms, (iiC) repurchaseas applicable, redeem or otherwise acquire the Incentive Plan as in effect on the date of this Agreement, and (D) the Series C Financing;
(iii) enter into any shares of the capital stock Contracts or other equity interests of arrangements between the Company or any of its Subsidiaries Subsidiaries, on the one hand, and any director or officer of the Company or any Person beneficially owning five percent or more of the outstanding Company Shares (including, without limitation, securities exchangeable for, on a fully diluted basis) or options, warrants, calls, commitments or rights shares of common stock of any kind to acquireof their respective Affiliates, capital stock on the other hand, except for compensatory arrangements entered into in the Ordinary Course of Business with Company Employees and transactions with its Affiliates;
(iv) create or other equity interests incur any Encumbrance that is not incurred in the Ordinary Course of Business on any of the assets 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;
(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 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 except for (A) dividends paid by any Wholly Owned Subsidiary 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;
(dvii) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practicesamend, the Company shall notmodify, 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, cancel or pay any benefit that is not required bylet lapse an Insurance Policy, any Benefit Plan unless simultaneous with such termination, cancellation or other employee benefit plan or any agreementlapse, 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 nonreplacement self-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 insurance programs 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 one or more of its Subsidiaries shall adopt or put into effect a plan replacement policies underwritten by insurance and reinsurance companies 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 nationally recognized standing are in Section 5.01(i) of the Company Disclosure Schedule, the Company shall not, full force 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, excepteffect, 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 required by Law;
(m) the Company shall notapplicable, 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 in effect as of the date hereofof this Agreement;
(viii) make any changes with respect to the legal structure of the Company and its Subsidiaries or to their accounting policies or procedures, except as may be required as a result of a change in applicable Law or by changes in GAAP;
(nix) the Company shall notmake, and shall not permit change or revoke any of its Subsidiaries toTax election, takechange an annual Tax accounting period, 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 Tax Return, enter into any closing agreementagreement with respect to Taxes, settle or compromise any Tax claim, audit, assessment or liability relating to the Company or any of its Subsidiariesdispute, or surrender any right to claim a refund of Taxes, except as set forth or take any action which would be reasonably expected to result in Section 5.01(o) an increase in the Tax liability 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 actionor, or omit to take any action relating to the filing in respect of any Tax Return taxable period (or portion thereof) ending after the payment of any TaxClosing Date, 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 of Parent, Merger Sub or materially decreasing their Affiliates;
(x) cancel, abandon or otherwise allow to lapse or expire any present or future Tax benefit Company Intellectual Property Rights, except in the Ordinary Course of Business with respect to Intellectual Property Rights that are not material to any business of the Company or any of its Subsidiaries;
(pxi) become 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;
(xii) fail to maintain policies and procedures designed to ensure compliance with the FCPA and Other Anti-Bribery Laws;
(xiii) fail to maintain policies and procedures designed to ensure compliance with the Export and Sanctions Regulations in each jurisdiction in which the Company shall (i) use its commercially reasonable efforts to, and shall cause its Subsidiaries operate or are otherwise subject to use their respective commercially reasonable efforts to, prevent jurisdiction;
(xiv) take any action or fail to take any action that is reasonably expected to result in any of 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 conditions 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 Merger set forth in Article VIII 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 aggregatebeing satisfied; andor
(qxv) 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 Parent’s or its Subsidiaries’ operations prior to the Effective Time.
(c) Parent shall, and shall cause each of its Subsidiaries to, from and after the date of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing, with such approval not to be unreasonably withheld, conditioned or delayed), and except as otherwise expressly required by this Agreement or as required by applicable Law, conduct its business in the Ordinary Course of Business and, to the extent consistent therewith, shall use and cause each of its Subsidiaries to use their respective reasonable best efforts to, preserve its and their business organizations intact and maintain satisfactory relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of and in furtherance of the foregoing sentence, from the date of this Agreement until the Effective Time, except as otherwise expressly required by this Agreement, required by applicable Law, required by the express terms of any material contract made available to Company, as approved in writing by Company, with such approval not to be unreasonably withheld, conditioned or delayed, or set forth in the corresponding subsection of Section 7.1(c) of the Parent Disclosure Letter, Parent shall not and shall cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate Parent or any of its Subsidiaries 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 assets, operations or businesses;
(iii) acquire assets from any other Person;
(iv) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of Parent 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 the issuance of shares of capital stock by a Wholly Owned Subsidiary of Parent to Parent or another Wholly Owned Subsidiary of Parent;
(v) enter into any Contracts or other arrangements between Parent or any of its Subsidiaries, on the one hand, and any director or officer of Parent or any Person beneficially owning five percent or more of the outstanding Company Shares or shares of common stock of any of their respective Affiliates;
(vi) create or incur any Encumbrance that is not incurred in the Ordinary Course of Business on any of the assets of Parent or any of its Subsidiaries;
(vii) make any loans, advances, guarantees or capital contributions to or investments in any Person (other than to or from Parent and any of its Wholly Owned Subsidiaries);
(viii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for (A) dividends paid by any Wholly Owned Subsidiary to Parent or to any other Wholly Owned Subsidiary of Parent;
(ix) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(x) incur any material Indebtedness (including the issuance of any debt securities, warrants or other rights to acquire any debt security);
(xi) enter into any Contract other than Contracts entered into in the Ordinary Course of Business with payment obligations not to exceed $50,000;
(xii) cancel, modify or waive any debts or claims held by Parent or any of its Subsidiaries or waive any material rights;
(xiii) amend, modify, terminate, cancel or let lapse an Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement self-insurance programs are established by Parent or one or more of its Subsidiaries or replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing 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;
(xiv) other than settlement of trade accounts payable in the Ordinary Course of Business, settle or compromise any Proceeding for an amount in excess of $20,000 individually or $50,000 in the aggregate during any calendar year;
(xv) make any changes with respect to the legal structure of the Company and its Subsidiaries or to their accounting policies or procedures, except as required by changes in GAAP;
(xvi) make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any Tax claim, audit, assessment or dispute, surrender any right to claim a refund or take any action which would be reasonably expected to result in an increase in the Tax liability of the Company or its Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent, Merger Sub or their Affiliates;
(xvii) transfer, sell, lease, divest, cancel, allow to lapse or expire, or otherwise dispose of or transfer, or permit or suffer to exist the creation of any Encumbrance upon, any assets (tangible or intangible, including any Intellectual Property Rights and Programs), Licenses, product lines or businesses of the Company or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except in connection with services provided in the Ordinary Course of Business or sales of obsolete assets;
(xviii) cancel, abandon or otherwise allow to lapse or expire any Intellectual Property Rights, except in the Ordinary Course of Business with respect to Intellectual Property Rights that are not material to any business of the Company or any of its Subsidiaries;
(xix) become 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;
(xx) fail to maintain policies and procedures designed to ensure compliance with the FCPA and Other Anti-Bribery Laws;
(xxi) fail to maintain policies and procedures designed to ensure compliance with the Export and Sanctions Regulations in each jurisdiction in which the Company and its Subsidiaries operate or are otherwise subject to jurisdiction;
(xxii) take any action or fail to take any action that is reasonably expected to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; or
(xxiii) agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. Except The Company agrees that, between the date of this Agreement and the Effective Time, except (i) as otherwise expressly contemplated by this Agreement or Agreement, (ii) as set forth in Section 5.01 7.1 of the Company Disclosure Schedule Letter, (iii) as required by applicable Law, or as consented (iv) to the extent Parent otherwise consents in writing by Parent(which consent shall not be unreasonably withheld, conditioned or delayed), the businesses of the Company covenants and agrees that during the period from Subsidiaries shall be conducted in all material respects in the date ordinary course of this Agreement business consistent with past practice and, to the Effective Time (or until termination of this Agreement in accordance with Article 7 hereof):
(a) the business and operations extent consistent therewith, each of the Company and its Subsidiaries shall be conducted, and the books and records of the Company and 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 to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees and preserve their relationships maintain its existing relations with their material customers, suppliers, licensorsemployees, licenseescreditors and business partners. Without limiting the generality of the foregoing, advertisersexcept (A) as expressly contemplated by this Agreement, distributors (B) as set forth in Section 7.1 of the Company Disclosure Letter, (C) as required by applicable Law or (D) to the extent Parent otherwise consents in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the Company agrees that neither the Company nor any Subsidiary shall, between the date of this Agreement and other material third parties having business dealings with them and to preserve the goodwill Effective Time, do any of their respective businessesthe following:
(a) amend or restate the articles of incorporation or bylaws of the Company, or such similar organizational or governing documents of the Subsidiaries;
(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 issuesell, sell or deliver (whether through the issuance or granting of optionstransfer, commitments, subscriptions, rights to purchase or otherwise)dispose of, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its Subsidiariesequity interests, any other voting securities or any securities convertible into or exercisable intoexchangeable for, or any rights, warrants or options to acquire, any such sharesshares of capital stock or equity interests, voting securities or convertible securities or any other securities phantom stock or equity equivalents (including, without limitation, stock appreciation rights or phantom interests)with respect thereto, except for issuances other than the issuance of Common Shares issuable upon the exercise of Company Options outstanding under the Stock Plans as of the date hereof; of this Agreement;
(iic) repurchasedeclare, redeem set aside, make or otherwise acquire pay any shares dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of the its capital stock or equity interests, 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;
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any capital stock or equity interests of the Company or any Subsidiary, other than Shares acquired from holders 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 Company Options in payment of the exercise price for 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)Options;
(e) neither the Company nor any of its Subsidiaries shall (i) grant acquire (including by merger, consolidation, or agree to acquisition of stock or assets or any increase in other business combination) any manner the compensation corporation, partnership, other business or benefits of business organization, any current division or former directorbusiness unit thereof or, officer or employee, 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(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 Plansany material assets, (ii) enter into incur, create, assume or otherwise become liable for any new indebtedness for borrowed money (other than in the ordinary course of business consistent with past practice or materially amend draws on any existing Contractcredit facility or line of credit of the Company or any of its Subsidiaries) or issue any debt securities or any right to acquire debt securities or assume, transactionguarantee, commitment endorse or arrangement with otherwise become responsible or liable for any current or former director, officer, employee or affiliate material liability of any other Person other than the guarantee of any liability of the Company or any of its Subsidiaries, or (iii) except as set forth in Section 5.01(e) of enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company Disclosure Scheduleor its Subsidiaries against fluctuations in commodities prices, as may be required to comply exchange rates or interest rates, other than in the ordinary course of business consistent with applicable Law past practice, (iv) make any material loans, advances or capital contributions to, or investments in, Persons other than wholly owned Subsidiaries and as provided other than in the ordinary course of business, or (v) sell, lease, license, encumber or otherwise contemplated dispose of or transfer (by merger, consolidation, sale of stock or assets or otherwise) any material amount of its assets other than 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 ordinary course of any current or former director, officer or employee in existence on the date hereofbusiness;
(f) the Company shall not, and shall not permit make or commit to make 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 expenditure other than acquisitions or purchases made with the prior written consent in respect of the Parent those capital expenditure projects that are (each an “Approved Acquisition”i) and other than non-taxable transfers contemplated by or among the Company and the Company’s Subsidiaries; or (y) establish or acquire (i) any Subsidiary other than wholly-owned Subsidiaries fiscal year 2011 forecast or (ii) Subsidiaries organized outside not in excess of $1,000,000 in the United States and its territorial possessionsaggregate;
(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 adopt 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)Subsidiary;
(ih) 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 intoincrease the salary, wages, benefits, bonuses or materially amendother compensation payable or to become payable to its current or former directors, modify officers or supplement any Contract outside the ordinary course of business consistent with past practice employees, except for increases required 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 employment agreements existing on the date hereof or other planned capital expenditures than general increases in wages to employees who are not officers, directors or Affiliates of the Company 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 shallpractice, 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 or amend or otherwise alter any labor or collective bargaining employment agreement, memorandum change of control or understanding, grievance settlement or any other severance agreement or commitment to or relating to any labor union which is different in any material respect with any currently existing collective bargaining agreementPerson, memorandum or understandingestablish, grievance settlement adopt, enter into or commitmentamend any Benefits Plan, except, in each case, (iii) except as required by Law;
(m) the Company shall not, and shall not permit under any employment or change 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 control agreement existing on the date hereofhereof or as may be required to implement the actions contemplated by this Agreement, including Sections 4.3 and 7.8, accelerate the vesting or payment of any compensation or benefit under any Benefits Plan, or (iv) except as may be required as a result by the terms of a change any such Benefit Plan in effect on the date hereof or to comply with applicable Law or in GAAPLaw, including Section 409A of the Code;
(ni) 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 change to its methods of accounting in effect as of the Company contained date of this Agreement, except as required by changes in this Agreement inaccurate in any material respect at, GAAP or Law or by the SEC or as of any time prior to, recommended by 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 satisfiedCompany’s independent registered public accounting firm;
(oj) the Company shall not, and shall not permit any of its Subsidiaries to, make or change any material tax election Tax election, settle or compromise any Tax liability, change an annual in any respect any accounting period with method in respect to of Taxes, file any amended amendment to an income or other material Tax Return, enter into any closing agreement, settle any material claim or compromise any Tax claim, material assessment or liability relating to the Company or any of its Subsidiaries, or surrender any right to claim a refund in respect of Taxes, except as set forth in Section 5.01(o) of the Company Disclosure Schedule, or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating in respect of Taxes, except, in each case, in the ordinary course of business consistent with past practice;
(k) write up, write down or write off the book value of any of its material assets, other than as may be required by GAAP;
(l) waive, settle, satisfy or compromise any material claim (which shall include any pending or threatened material action), except (i) in the ordinary course of business, (ii) to the extent subject to reserves existing on the date of this Agreement, or (iii) involving amounts outside the ordinary course of business not to exceed $250,000 individually or $1,000,000 in the aggregate;
(m) except as provided in Section 7.1(e) or (h), enter into, amend, modify, cancel or consent to the termination of any Material Contract or any Contract that would be a Material Contract if in effect on the date of this Agreement (without regard to materiality in the case of Material Contracts of the type described in Section 5.11(a)(vii)(B)), other than in the case of customer or supplier Material Contracts if entered into in the ordinary course of business consistent with past practice and on terms that in the discretion of the Company are not reasonably expected to be materially adverse to the Company and its Subsidiaries taken as a whole;
(n) enter into, amend, modify, cancel or consent to the termination of any Labor Contract or any Contract that would be a Labor Contract if in effect on the date of this Agreement;
(o) enter into, renew or amend in any material respect any transaction, Contract, arrangement or understanding between the Company or any of its Subsidiaries, or take on the one hand, and 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 (other than any of its the Company’s Subsidiaries), on the other hand;
(p) the Company shall (i) use its commercially reasonable efforts toassign, and shall cause its Subsidiaries to use their respective commercially reasonable efforts totransfer, prevent license or sublicense, mortgage or encumber any Company Intellectual Property, except for non-exclusive licenses or non-exclusive sublicenses of Company Intellectual Property in the termination ordinary course of any Contract with any Significant Customer, business or (ii) notfail to pay any fee, and shall cause take any action or make any filing in each case reasonably necessary to maintain its Subsidiaries not to, amend ownership of or modify any Contract with any Significant Customer, other than on terms substantially equivalent to, or more beneficial on balance to the protect its interests in material 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 aggregateIntellectual Property; andor
(q) the Company shall not, and shall not permit any of its Subsidiaries to, agree or commit in writing 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 (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 (unless Keystone shall 36 otherwise approve in writing, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement, the Stock Option Agreement, the Company Disclosure Letter or as required by applicable Law):
(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 the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially all reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(bii) the Company shall not, and it shall not (A) amend its certificate of incorporation or by-laws; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock; or (D) repurchase, redeem or otherwise acquire, or 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)otherwise acquire, pledge or otherwise encumber any shares of its capital stock or the any securities convertible into or exchangeable or exercisable for any shares of its capital stock of stock;
(iii) neither it nor any of its SubsidiariesSubsidiaries shall knowingly take any action that would prevent the merger from qualifying as a tax-free "reorganization" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties herein to become untrue in any material respect;
(iv) neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Compensation and Benefit Plans or Stock Plans or increase the salary, wage, bonus or other securities compensation of any directors, officers or employees or take any action which would result in an acceleration of benefits or vesting under the Stock Plans as a result of the consummation of the Merger which would not otherwise occur pursuant to the terms and conditions of such benefits or Stock Plan grants, awards or options as in effect on the date hereof;
(v) neither it nor any of its Subsidiaries shall issue any preferred stock or incur any indebtedness for borrowed money (other than indebtedness in the ordinary course of business consistent with past practice, indebtedness incurred solely for the purpose of funding the Escrow Account or the replacement or refinancing of existing short-term indebtedness); or guarantee any such indebtedness;
(vi) neither it nor any of its Subsidiaries shall make any capital expenditures in an aggregate amount in excess of the aggregate amount reflected in the Company's capital expenditure budget heretofore delivered to Keystone;
(vii) except as contemplated by
Section 6.1 (a)(iv), neither the Company nor any of its Subsidiaries shall issue, deliver, sell, or encumber shares of any class of its common stock or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such sharesshares except the option granted under the Stock Option Agreement, 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 options and performance share programs outstanding as of on 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 hereof under the Stock Plans, and shares issuable pursuant to such options and performance share programs;
(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);
(eviii) neither the Company it nor any of its Subsidiaries shall (i) grant acquire any business, whether by merger, consolidation, purchase of property or agree to any increase in any manner the compensation assets 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 hereofotherwise;
(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;
(hix) neither the Company it 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 agree 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 foregoingforegoing after the Effective Time.
(b) Keystone covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless the Company shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement or in the Keystone Disclosure Letter or as required by applicable Law):
(i) the business of it and its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it and its Subsidiaries shall use all reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, employees and business associates;
(ii) it shall not (A) amend its certificate of incorporation or by-laws in any manner that would prohibit or hinder, impede or delay in any material respect the Merger or the consummation of the transactions contemplated hereby;
Appears in 1 contract
Interim Operations. Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 of Prior to the Closing Date, unless the Company Disclosure Schedule or as has consented to in writing by Parentthereto, the Operating Company:
(i) shall conduct its operations according to its usual, regular and ordinary course in substantially the same manner as heretofore conducted;
(ii) shall use its reasonable efforts to preserve intact its business organization and goodwill and maintain satisfactory relationships with those persons having business relationships with it;
(iii) shall promptly notify the Company covenants and agrees that during of (x) any material change in its condition (financial or otherwise), business, properties, assets, liabilities or the period from the date normal course of this Agreement to the Effective Time its business or of its properties, (y) any material litigation or material governmental complaints, investigations or hearings (or until termination communications indicating that the same may be contemplated), or (z) the breach of this Agreement in accordance with Article 7 hereof):any representation or warranty contained herein;
(aiv) shall not issue any equity interest; 9
(v) shall not (w) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the business and operations obligations of the Company and its Subsidiaries shall be conductedany other individual, and the books and records of the Company and its Subsidiaries shall be maintainedcorporation or other entity, only (x) make any loans or advances to any other person, except in each case in the ordinary course of business, (y) acquire (including, without limitation, for cash or shares of stock, by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership or other business and organization or division thereof or any assets, or make any investment either by purchase of stock or securities, contributions of capital or property transfer or, except in the Company and its Subsidiaries shall use their commercially reasonable best efforts to preserve intact their current business organizationsordinary course of business, keep available consistent with past practice, purchase any property or assets of any other person or (z) effect a sale or other disposition of any of the services Assets or allow the creation 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 businessesany lien or encumbrance thereon;
(bvi) the Company shall not, and shall not permit (x) declare, set aside or make any of its Subsidiaries to, (i) authorize for issuance, issue, deliver, sell distribution or agree or commit payment with respect 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 Subsidiariesother ownership interest, any other securities than such distributions or any securities convertible payments as are consistent with past practice or exercisable into(y) directly or indirectly redeem, 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 purchase or otherwise acquire any shares of the its capital stock or other equity interests of the Company or make any of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of commitment for 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 Plansaction;
(cvii) 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, by-laws 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 stockequivalent organizational documents;
(dviii) 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 increase the compensation payable or to become payable to its officers or employees, pay any of employment related or other bonus to its Subsidiaries shareholder, or, except as presently bound to do, grant any severance or termination pay to, declare, set aside or pay enter into any dividends on (whether in cash, stock employment or other property), or make any other distributions in respect ofseverance agreement with, any of its capital stock (except for dividends paid by direct directors, officers or indirect wholly owned Subsidiaries to the Company or to other wholly owned Subsidiaries of the Company consistent with past practices)employees;
(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 take 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 action other than in the ordinary course of business and in a manner consistent with past practices in excess of $500,000 in the aggregate;practice with respect to accounting policies or procedures; and
(kx) 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, untrue or incorrect 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 foregoingClosing Date.
Appears in 1 contract
Interim Operations. (a) Except as otherwise contemplated by this Agreement or as set forth in Section 5.01 this Agreement or on Schedule 7.1, each of the Company Disclosure Schedule or as consented to in writing by Parent, Parent and 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 the other party shall otherwise approve in writing and except as otherwise expressly contemplated by this Agreement, disclosed in the Schedules attached hereto or until termination of this Agreement in accordance with Article 7 hereofrequired by applicable Law):
(ai) the 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 and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations 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 and to preserve the goodwill of their respective businessesassociates;
(bii) the Company It shall not: (A) amend its certificate of incorporation or bylaws; (B) split, and shall not combine, subdivide or reclassify its outstanding shares of capital stock; (C) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock; or (D) repurchase, redeem or otherwise acquire, except in connection with existing commitments under the Parent or Company Stock Plans but subject to the obligations under subparagraph (iii) below, or 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)otherwise acquire, 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 into or exchangeable 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;
(diii) 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 Neither it nor any of its Subsidiaries shall (itake any action that would prevent the Merger from qualifying as a "reorganization" within the meaning of Section 368(a) grant of the Code or agree that would cause any of its representations and warranties in this Agreement to any increase become untrue in any manner material respect;
(iv) Neither it nor any of its ERISA Affiliates shall: (A) accelerate, amend or change the period of exercisability of or terminate, establish, adopt, enter into, make any new grants or awards of stock-based compensation or other benefits under any Compensation and Benefit Plans; (B) amend or otherwise modify any Compensation and Benefit Plans; or (C) increase the salary, wage, bonus or other compensation of any current directors, officers or former directorkey employees, officer or employeein the case of (A), (B) and (C), except increases (x) for grants or awards to directors, officers and employees of it or its Subsidiaries under existing Compensation and Benefit Plans in the ordinary course of business such amounts and on such terms as are 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 in the United States normal and its territorial possessions;
(g) the Company shall not, and shall not permit any usual course of its Subsidiaries to, business (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 which may include normal periodic performance reviews 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 related compensation 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 benefit increases and the Company’s Subsidiaries;
(h) neither the Company nor any provision 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, individual Compensation 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 Benefit Plans consistent with past practice under which the Company for promoted 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.newly hired
Appears in 1 contract
Sources: Merger Agreement (Corzon 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 hereof and prior to the Effective Time (unless SBC shall otherwise approve in writing, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement Agreement, disclosed in accordance with Article 7 hereofthe Company Disclosure Letter or required by applicable Law):
(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 the ordinary and usual course of business and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially all reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations 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 and to preserve the goodwill of their respective businessesassociates;
(bii) it shall not (A) amend its certificate of incorporation or by-laws or amend, modify or terminate the Rights Agreement; provided, however, that nothing in this Agreement shall prevent the Company from reducing below 20% the beneficial ownership threshold in the definition of an Acquiring Person (as defined in the Rights Agreement) or extending the Final Expiration Date of the Rights Agreement (as defined therein) or adopting a new rights agreement having substantially similar terms as the Rights Agreement and not inconsistent with (x) this proviso, (y)Section 5.1(o) (assuming references therein are to such a new rights agreement) or (z) the transactions contemplated by this Agreement; (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 in amounts consistent with its past practice or rights to purchase Company shall notShares or Company Preference Shares pursuant to any successor agreement to the Rights Agreement, and shall not adopted in accordance with the terms of this Agreement; or (D) repurchase, redeem or otherwise acquire or 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)otherwise acquire, pledge or otherwise encumber except in open market transactions in connection with the Company Stock Plans, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, but subject to the Company's obligations under subparagraph (iii) below.
(iii) neither it nor any of its Subsidiaries shall knowingly take any action that would prevent the Merger from qualifying for "pooling of interests" accounting treatment or as a "reorganization" within the meaning of Section 368(a) of the Code or that would cause any of its representations and warranties herein to become untrue in any material respect;
(iv) neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards 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) for grants or awards to directors, officers and employees of it or its Subsidiaries under existing Company Compensation and Benefit Plans in such amounts and on such terms as are consistent with past practice, (B) 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 promoted or newly hired 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 it institute a broad based change in compensation, unless it shall have used its reasonable best efforts to provide SBC with prior notice of any such change or, if the Company was unable to provide such prior notice, the Company shall provide SBC with notice as soon as practicable following any such change, or (C) for actions necessary to satisfy existing contractual obligations under Company Compensation and Benefit Plans existing as of the date hereof;
(v) neither it nor any of its Subsidiaries shall issue any Company Preferred Shares or Company Preference Shares or incur any indebtedness for borrowed money or guarantee any such indebtedness if it should reasonably anticipate that after such incurrence any of its or any of its Subsidiaries' outstanding senior indebtedness would be rated A or lower by Standard & Poor's;
(vi) neither it nor any of its Subsidiaries shall make any capital expenditures in any period of twelve consecutive months following the date hereof in an aggregate amount in excess of 150% of the aggregate amount reflected in the Company's capital expenditure budget for such year, a copy of which has been provided to SBC;
(vii) neither it nor any of its Subsidiaries shall transfer, lease, license, sell, mortgage, pledge, encumber or otherwise dispose of any of its or its Subsidiaries property or assets (including capital stock of any of its Subsidiaries) with a fair market value in excess of $1 billion in the aggregate in any period of twelve consecutive months following the date hereof except for transfers, leases, licenses, sales, mortgages, pledges, encumbrances, or other dispositions in the ordinary course of business consistent with past practice;
(viii) neither it nor any other securities of its Subsidiaries shall issue, deliver, sell, or encumber shares of any class of its common stock or any securities convertible or exercisable into, or any rights, warrants or options to acquire, any such shares except, (A) any such shares issued pursuant to options and other awards outstanding on the date hereof under the Company Stock Plans, awards of options and other awards granted hereafter under the Company Stock Plans in accordance with this Agreement and shares issuable pursuant to such awards, and (B) up to an aggregate amount of $3.6 billion of such shares, securities securities, rights, warrants or convertible securities or any other securities or equity equivalents options (including, without limitation, stock appreciation rights or phantom interests), except for issuances of Common Shares upon the exercise of Options outstanding valued at their fair market value as of the date hereof; (ii) repurchase, redeem or otherwise acquire any shares of the capital stock agreement to make such acquisition) in any period of twelve consecutive months following the date hereof to fund, in whole or other equity interests in part, the cost of the Company any acquisition or any acquisitions permitted under clause (ix) below following reasonable notice to SBC of its Subsidiaries (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any kind intention 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 take such Options were granted or (C) in connection with terminating the Options and the Stock Plansaction;
(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);
(eix) neither the Company it 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 spend in excess of $25,000 individually or $50,000 3.6 billion in the aggregate other than in any period of twelve consecutive months following the date hereof to acquire any business, whether by merger, consolidation, purchase of property or assets or otherwise (i) pursuant to existing contracts and commitments described in Section 5.01(g) valuing any non-cash consideration at its fair market value as of the Company Disclosure Schedule, (ii) immaterial properties or assets (or immaterial portions of properties or assets described in Section 5.01(g) date of the Company Disclosure Scheduleagreement for such acquisition); provided, (iii) Permitted Liensthat no such acquisition would prevent, (iv) Liens relating materially delay or materially impair its ability 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 consummate the transactions contemplated by this Agreement. Notwithstanding the Company in accordance with GAAP and (v) other than non-taxable transfers by or among the Company and the Company’s Subsidiaries;
(h) foregoing, neither the Company it nor any of its Subsidiaries shall adopt or put into effect a plan acquire any business the acquisition of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization which would subject SBC and its Subsidiaries following the consummation of the Company Merger to any Commercial Mobile Radio Service spectrum aggregation limit restriction pursuant to the provisions of 47 C.F.R. Section 20.6 or any of place SBC and its Subsidiaries (other than any transaction specifically contemplated by this Agreement);
(i) except as set forth in Section 5.01(i) following the consummation 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 Merger 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) violation 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 Cellular Cross Ownership limits 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.47 C.F.R.
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 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 (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or until termination of delayed, and except as otherwise expressly contemplated by this Agreement in accordance with Article 7 hereofAgreement):
(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 and and, to the Company extent consistent therewith, it and its Subsidiaries shall use their commercially respective reasonable best efforts to preserve its business organization intact their current business organizations, keep available the services of their current officers and employees maintain its existing relations and preserve their relationships goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) the Company shall not, and it shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its certificate of incorporation or by-laws or, amend, modify or terminate the Rights Agreement; (iii) split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries and other than regular quarterly cash dividends not in excess of $0.055 per Share; or (v) repurchase, redeem or otherwise acquire, except in connection with the Stock Plans, or 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)otherwise acquire, 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 into or exchangeable 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 its capital stock or other equity interests of the Company or stock;
(c) neither it nor any of its Subsidiaries shall (includingi) issue, without limitationsell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other equity interests property or assets (other than in accordance with the Rights Agreement and other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Stock Plans); (ii) other than in the ordinary and usual course of the Company business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries)) or incur or modify any material indebtedness or other liability; or (iii) amend, modify or waive any term of any outstanding security of the Company or any of its Subsidiaries, except (A) as required make or authorize or commit for any capital expenditures other than capital expenditures (a) in the aggregate amount remaining in the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by this Agreementthe Company with respect to calendar year 2005 and (b) in amounts not in excess of $2 million individually and $10 million in the aggregate with respect to all unbudgeted capital expenditures, or (B) by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity for consideration in excess of (a) in the aggregate amount remaining in the acquisitions budget set forth in the Company Disclosure Schedule after deducting amounts previously spent by the Company with respect to acquisitions and investments in calendar year 2005 and (b) in amounts not in excess of $2 million individually and $10 million in the aggregate with respect to all unbudgeted acquisitions; and (iv) enter into any joint venture agreement, partnership agreement or similar agreement with any Person;
(d) except as set forth in Section 5.01(bSections 5.1(h)(i) and 5.1(h)(xii) of the Company Disclosure Schedule, in connection with accelerating the vesting schedules of the Options to the extent or as otherwise 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) sellapplicable Law, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by neither 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 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 employeeEmployee of the Company or any of its Subsidiaries except, except increases in the case of Employees who are not officers, 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 increase the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus to, or make any new or materially amend equity awards to any existing Contract, transaction, commitment or arrangement with any current or former director, officer, employee officer or affiliate Employee of the Company or any of its Subsidiaries, or except for increases in base salary in the ordinary course of business consistent with past practice for Employees who are not officers, (iii) except as set forth enter into, adopt, extend or renew any employment, severance, change in Section 5.01(e) of the Company Disclosure Schedulecontrol, as may be required to comply with applicable Law and as provided or otherwise contemplated in this Agreement (includingtermination, 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 deferred compensation or other employee benefit plan or similar agreement with 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 Employee 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 establish, adopt, amend, suspend, terminate or otherwise being contested in good faith and as to which appropriate reserves have been established by exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company in accordance with GAAP and Options or Company Awards, (v) take any action to fund or in any other than non-taxable transfers by way secure the payment of compensation or among benefits under any Company Benefit Plan, (vi) take any action to accelerate the vesting or payment of any compensation or benefits under any Company and Benefit Plan, to the Company’s Subsidiaries;
extent not already provided for under any such Company Benefit Plan, (hvii) neither the Company nor change any of its Subsidiaries shall adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization actuarial 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 assumptions used to calculate funding 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 any Company Benefit Plan or other planned capital expenditures other than to change the manner in which contributions to such plans are made or 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 basis on which such types and in such amounts as contributions 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 hereofdetermined, except as may be required as a result of a change in applicable Law by GAAP; or in GAAP;
(nviii) the Company shall notforgive any loans to directors, and shall not permit any of its Subsidiaries to, take, officers 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 Employees of the Company or any of its Subsidiaries;
(pe) prior to making any written or oral communications to any of its or its Subsidiaries’ directors, officers or Employees pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, it shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the intended communication, and Parent and the Company shall cooperate in providing any such communication;
(if) use its commercially reasonable efforts toexcept in the ordinary and usual course of business, 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 neither it nor any of its Subsidiaries thanshall settle or compromise any material claims or litigation or modify, the terms amend or terminate any of such Contract prior to the making its material Contracts or waive, release or assign any material rights or claims;
(g) neither it nor any of such amendment or modification, and (iii) not, and shall cause its Subsidiaries not to, shall make any Tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except in the ordinary and usual course of business;
(h) neither it nor any of its Subsidiaries shall take any action or omit to take any action that would cause any of its representations and warranties herein to become untrue in any material respect;
(i) neither it nor any of its Subsidiaries will authorize or enter into, or materially amend, modify or supplement, into any Lease or ▇▇▇▇▇▇;
(j) neither it nor any of its Subsidiaries will enter into any agreement that limits (other Material Contract under which than in an insignificant manner) the costs or obligations ability of the Company or any Subsidiary of the Company, or would limit (other than in an insignificant manner) the ability of Parent or any Subsidiary of Parent after the Effective Time, to compete in or conduct any line of business or compete with any Person in any geographic area or during any period, it being understood that any restriction that by its terms does not extend more than six months beyond the Effective Time shall be deemed to be insignificant;
(k) neither it nor any of its Subsidiaries resulting will enter into any marketing Contract with respect to natural gas for a term longer than 31 days from the date of such amendment, modification Contract (or supplement would exceed $25,000 per annum individually or $100,000 per annum for all such amendments, modifications and supplements six months in the aggregatecase of Bolivia);
(l) neither it nor any of its Subsidiaries will enter into any marketing Contract with respect to crude oil for a term longer than two full months from the last day of the calendar month in which such Contract is entered into; and
(qm) the Company shall not, and shall not permit neither it nor any of its Subsidiaries to, agree will authorize or commit enter into an agreement 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 Seller and the Company covenant and agree that after June 30, 1997 and prior to the Closing (unless Buyer shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed), 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 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):Agreement:
(a) the Company's 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 the Company and its Subsidiaries shall use their commercially reasonable its best efforts to preserve intact their current its business organizations, keep available the services of their current officers manufacturing license, pioneer status and employees manufacturing warehouse license intact and preserve their relationships maintain its existing relations and goodwill with their material customers, suppliers, licensorsdistributors, licenseescreditors, advertiserslessors, distributors employees and other material third parties having business dealings with them and to preserve the goodwill of their respective businessesassociates;
(b) the Company shall not, and shall not permit any of its Subsidiaries to, (i) authorize for issuance, issue, deliversell, sell pledge, dispose of 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 of, or the capital stock of any of its Subsidiaries, any other securities or any securities convertible into or exchangeable 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, any shares of its capital stock or other equity interests of the Company any class or any of its Subsidiaries); or (iii) amend, modify or waive any term of any outstanding security of the Company voting debt 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 other property 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, assets; (ii) amend its Memorandum and Articles of Association or otherwise change its certificate of incorporation or bylaws or permit any of its Subsidiaries to amend its articles of incorporation, or bylaws or by-laws; (iii) split, combine or reclassify its outstanding shares of capital stock; (iv) declare, set aside or pay any dividend or make any distribution payable in cash, stock or property in respect of any capital stock; or (v) repurchase, redeem or otherwise acquire any shares of its capital stock, and shall not permit stock or any of its Subsidiaries to split, combine securities convertible into or reclassify exchangeable or exercisable for any shares of its capital stock;
(dc) other than quarterly dividends not in excess of $0.075 per Common Share declared and paid consistent with past practices, the Company shall not, other than in the ordinary and usual course of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets or incur or modify any material indebtedness or other liability; (iii) except as disclosed in budgets provided to the other party hereto prior to the date hereof, make any commitments for, make or authorize any capital expenditures other than in the ordinary and usual course of business and in amounts less than the equivalent of US $5,000 individually and US $25,000 in the aggregate or, by any means, make any acquisition of, or investment in, assets or stock of any other person or entity; or (iv) enter into any joint venture, merger or other similar agreement with any person;
(d) the Company shall not permit terminate, establish, adopt, enter into, make any of its Subsidiaries tonew grants or awards under, declareamend or otherwise modify, set aside any compensation or pay any dividends on (whether in cashbenefit plan, stock or increase the salary, wage, bonus or other property), or make compensation of any other distributions employee except increases occurring in respect of, any the ordinary and usual course of its capital stock business in accordance with established past practice (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 practiceswhich shall include normal periodic performance reviews and related compensation and benefit increases);
(e) neither the Company nor shall not settle or compromise any material claims or litigation or, except in the ordinary and usual course of business modify, amend or terminate any of its Subsidiaries shall (i) grant material contracts or agree to waive, release or assign any increase in any manner the compensation material rights 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 hereofclaims;
(f) the Company shall not, and shall not make any tax election or permit any of its Subsidiaries to, (x) enter into any new line insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated except in the ordinary and usual course of business, 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;and
(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 authorize 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 an 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
Sources: Stock Purchase Agreement (Praegitzer Industries Inc)