Interim Operations. (a) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall ensure that (i) the business and operations of the Acquired Companies shall be conducted (A) in the ordinary and usual course and (B) in compliance with all applicable Laws and the requirements of all Material Contracts, and (ii) to the extent consistent therewith, each Acquired Company shall use its respective reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates. (b) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall not, and shall cause each of the other Acquired Companies not to: (i) (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend or waive or propose to amend or waive any provision of its certificate of incorporation or bylaws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, accrue, 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, except as may be required by the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock; (ii) (A) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); (B) transfer, lease (other than leases for equipment entered into in the ordinary course for construction, maintenance and facilities development projects), 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 indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any Person; (iii) (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of any Acquired Company except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice, (B) increase the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans to directors, officers or employees of any Acquired Company; (iv) commence or settle or compromise any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (except with respect to non-material disputes as may arise from time to time in the ordinary course of business of such Acquired Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h), in amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017); (v) (A) modify, amend, enter into or terminate any material Company Contract other than in the ordinary course of business or waive, release or assign any material rights or claims with respect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearance; (vi) make any Tax election, settle or compromise any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment; (vii) 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; (viii) 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; (ix) authorize or enter into any ▇▇▇▇▇▇; (x) enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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; (xi) enter into any new business line; (xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and (xiii) authorize, commit or enter into an agreement to do any of the foregoing. (c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations. (d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder.
Appears in 2 contracts
Sources: Merger Agreement (Willbros Group, Inc.\NEW\), Merger Agreement (Primoris Services Corp)
Interim Operations. (a) From the date of this Agreement until hereof through the Effective Time (unless Parent Closing, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Seller shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), cause the Company shall ensure that (i) the and its subsidiaries to conduct their business and operations of the Acquired Companies shall be conducted (A) in the ordinary and usual course and (B) in compliance with all applicable Laws and the requirements of all Material Contracts, and (ii) to the extent consistent therewith, each Acquired Company shall use its respective reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.
(b) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall not, and shall cause each of the other Acquired Companies not to:
(i) (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend or waive or propose to amend or waive any provision of its certificate of incorporation or bylaws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, accrue, 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, except as may be required by the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ii) (A) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); (B) transfer, lease (other than leases for equipment entered into in the ordinary course for construction, maintenance and facilities development projects), 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 indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any Person;
(iii) (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of any Acquired Company except, in the case of employees who are not officers, in the ordinary course of business consistent with past practicepractice and to preserve intact its present business organization and maintain good relationships with its customers, (B) increase the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement suppliers lenders and others having material business relationships with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans to directors, officers or employees of any Acquired Company;
(iv) commence or settle or compromise any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (except with respect to non-material disputes as may arise from time to time in the ordinary course of business of such Acquired Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h), in amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017);
(v) (A) modify, amend, enter into or terminate any material Company Contract other than in the ordinary course of business or waive, release or assign any material rights or claims with respect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearance;
(vi) make any Tax election, settle or compromise any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(vii) 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;
(viii) 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;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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;
(xi) enter into any new business line;
(xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(xiii) authorize, commit or enter into an agreement to do any of the foregoing.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effectit. Without limiting the generality of the foregoing, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Seller shall cause the Company shall promptly advise Parent and each of its subsidiaries not to:
(a) amend its charter, certificate or articles of incorporation or formation, bylaws, operating agreement or other constituent or organizational document (whether by merger, consolidation or otherwise);
(b) split, combine or reclassify any Capital Stock of the Company or any of its subsidiaries (whether by merger, consolidation or otherwise);
(c) declare, set aside or pay any dividend or other distribution (whether in writing cash, stock or property or any combination thereof) in respect of the Capital Stock of the Company or any of its subsidiaries (whether by merger, consolidation or otherwise);
(d) redeem, repurchase or otherwise acquire any Capital Stock of the Company or any of its subsidiaries (whether by merger, consolidation or otherwise);
(e) issue, deliver or sell any Capital Stock of the Company or any of its subsidiaries (whether by merger, consolidation or otherwise), other than the issuance of any Capital Stock of any wholly owned subsidiary of the Company to the Company or any other wholly owned subsidiary of the Company;
(f) amend any term of any Capital Stock of the Company or any of its subsidiaries (whether by merger, consolidation or otherwise);
(g) increase the compensation or benefits of any current or former director, officer, employee or consultant of the Company or any of its subsidiaries;
(h) grant or increase any severance, retention, change-of-control or similar payments to any current or former director, officer, employee or consultant of the Company or any of its subsidiaries;
(i) Legal Proceeding create, incur, assume or material claim threatenedguarantee any indebtedness for borrowed money, commenced other than borrowings in the ordinary course of business under any credit facility in effect as of the date of this Agreement; or
(j) agree, commit or asserted against or with respect offer to do any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunderforegoing.
Appears in 2 contracts
Sources: Stock Purchase Agreement, Stock Purchase Agreement (HC2 Holdings, Inc.)
Interim Operations. (a) From Except as set forth on Schedule 5.08, since the date of this Agreement until Interim Financial Statement Date: the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated Business has been conducted by this Agreement), the Company shall ensure that (i) the business and operations of the Acquired Companies shall be conducted (A) only in the ordinary and usual course consistent with past practices; there has not occurred any change, event or circumstance that has had, or could reasonably be expected to have, a Material Adverse Effect; the Company has not: paid, discharged or satisfied any claims, liabilities or obligations (absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary and usual course of business and consistent with past practice of liabilities and obligations incurred in the ordinary and usual course of business and consistent with past practice; borrowed any amount or incurred or become subject to any other liabilities (B) absolute or contingent), other than trade payables in compliance with all applicable Laws and the requirements ordinary course of all Material Contractsbusiness, and (ii) except as set forth on Schedule 5.08(c)(ii); declared or made any payment or distribution of cash or other property to Seller or purchased or redeemed, or made any agreements to purchase or redeem, any of its equity securities; issued, delivered, sold, pledged or encumbered, or authorized, proposed or agreed to the extent consistent therewithissuance, each Acquired Company shall use its respective reasonable efforts delivery, sale, pledge or encumbrance of, any shares of capital stock or bonds or any other security (or any right to preserve its business organization intact and maintain its existing relations and goodwill with customersacquire such capital stock or other security, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.
(bincluding options) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall not, and shall cause each of the other Acquired Companies not to:
(i) (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries, or any right, options or warrants with respect thereto; (B) amend effected any recapitalization, reclassification or waive or propose to amend or waive any provision like change in the capitalization of its certificate of incorporation or bylaws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, accrue, 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, except as may be required by the Company Stock Plans, or permit any of its Subsidiaries to purchase Subsidiaries, or otherwise acquiredeclared or paid dividends on, or made other distributions in respect of, any shares of its capital stock stock, or issued or authorized the issuance of any other securities convertible into in respect of, in lieu of or exchangeable or exercisable in substitution for any shares of its capital stock;
(ii) (A) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into repurchased, redeemed or exchangeable or exercisable forotherwise acquired, or options, warrants, calls, commitments modified or rights of any kind to acquireamended, any shares of its capital stock of the Company or any class of its Subsidiaries or any other property securities thereof or assets (any rights, warrants or options to acquire any such shares or other securities; canceled any debts owing to the Company or waived any claims or rights; sold, transferred, or otherwise disposed of, any of the Assets; disposed of, failed to take reasonable steps to protect, or permitted to lapse, any rights for the use of, any Intellectual Property, or disposed of, failed to take reasonable steps to protect, or disclosed to any Person any Proprietary Information or Confidential Information; made any change in any its methods of accounting or accounting practices; written off as uncollectible any notes or accounts receivable, other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); (B) transfer, lease (other than leases for equipment entered into in the ordinary course for construction, maintenance and facilities development projects), 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 indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any Person;
(iii) (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of any Acquired Company except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice; made any capital expenditures or capital expenditure commitments in excess of $10,000 individually or $25,000 in the aggregate, (B) increase except as set forth on Schedule 5.08(c)(xi); entered into any transaction or series of related transactions providing for payments by or to the compensationCompany in excess of $25,000 in the aggregate, bonus whether or pension, welfare, profit-sharing, severance or other benefits of, pay not in the ordinary course of business; made any bonus to, or make any new equity awards to any director, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions products or services have been developed or marketed; had any labor dispute or received notice of any grievance with respect thereto; loaned or advanced any amount to, or made any payments to such plans are made or the basis on which such contributions are determinedreceived any payments from, or sold, transferred or leased any of its assets to, any Affiliate, except as may be required by GAAPin the ordinary course of business; discharged or satisfied any Encumbrance or paid any obligation or liability (absolute or contingent), or (H) forgive any loans to directors, officers or employees of any Acquired Company;
(iv) commence or settle or compromise any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (except with respect to non-material disputes as may arise from time to time other than current liabilities paid in the ordinary course of business consistent with past practices; made any change in the cash management or working capital management of such Acquired the Company that involve only other than in the payment ordinary course of monetary damages not in excess business; (A) of $100,000 individually terminated, canceled or $250,000 in the aggregate and requested any material change in, or agreed to any material change in, any Subsisting Contract, or (B) in the case of such disputes disclosed on Section 6.1(h)entered into any contract which would constitute a Subsisting Contract as defined herein, in amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017);
(v) (A) modify, amend, enter into or terminate any material Company Contract other than in the ordinary course of business consistent with past practices, in either case, other than as set forth on Schedule 5.08(c)(xviii); adopted, agreed to adopt, or waivemade any announcement regarding the adoption of (A) any new pension, release retirement or assign any material rights other employee benefit plan, program or claims with respect thereto; policy or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearance;
(vi) make any Tax election, settle or compromise any Tax claim or Liability, change (or make a request amendment to any Governmental Entity to change) existing plan, policy or program; increased the compensation, bonuses or benefits of any employee, officer, director, or consultant of the Company or any of its Subsidiaries, other than annual increases in the ordinary course of business consistent with past practices at the regularly scheduled times, other than as set forth on Schedule 5.08(c)(xx); amended or modified any of the organizational documents of the Company; made any material aspect of election with respect to Taxes or made any change in any such election; made any change in its method methods of accounting for Tax purposesin effect at November 30, file 2005, except as required by changes in GAAP as agreed to by the Company's independent public accountants or as required by applicable law; made any amended Tax Returncharitable contributions or pledges, prepare other than as set forth on Schedule 5.08(c)(xxiv); settled any Tax Return in Legal Proceeding to which the Company is or was a manner inconsistent with the past practice party, other than as set forth on Schedule 5.08(c)(xxv); or suffered or agreed to take any of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of actions set forth in this subparagraph (c); the limitation period applicable to any material Tax claim or assessment;
(vii) permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except Business has been conducted by the Company only in the ordinary and usual course of business;
(viii) 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;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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;
(xi) enter into any new business line;
(xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(xiii) authorize, commit or enter into an agreement to do any of the foregoing.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, past practices; the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior has taken no steps to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect seek protection pursuant to any of the Acquired Companiesbankruptcy law, (ii) commencement of an involuntary case against Seller has no reason to believe that any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations creditors of the Company contained in this Agreement or intend to initiate involuntary bankruptcy proceedings against the Company, and Seller has no knowledge of any fact which would reasonably lead a creditor to do so; and none of the remedies available to Parent hereunderAssets has suffered any damage, destruction or casualty loss (as a result of fire, explosion or otherwise), whether or not covered by insurance.
Appears in 2 contracts
Sources: Stock Purchase Agreement (Cyber Digital Inc), Stock Purchase Agreement (Cyber Digital Inc)
Interim Operations. (a) From During the period from the date of this Agreement until to the Effective Time (unless Parent shall otherwise approve in writing in its sole discretionTime, and except as otherwise expressly contemplated by this Agreement), as set forth on the Disclosure Schedule, as expressly permitted by Section 4.1 or as otherwise approved in writing by the Purchaser, the Company shall ensure that (i) the business and operations of the Acquired Companies shall be conducted (A) in the ordinary and usual course and (B) in compliance with all applicable Laws and the requirements of all Material Contracts, and (ii) to the extent consistent therewith, each Acquired Company shall use its respective reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.
(b) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall not, not and shall cause each of the other Acquired Companies its subsidiaries not to:
(i) (Ax) issuedeclare, sellset aside or pay any dividends on, pledgeor make any other distributions in respect of, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; capital stock, other than dividends and distributions by a direct or indirect wholly owned subsidiary of the Company to its parent, (B) amend or waive or propose to amend or waive any provision of its certificate of incorporation or bylaws; (Cy) split, combine or reclassify its outstanding shares of capital stock; (D) declare, accrue, 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, except as may be required by the Company Stock Plans, or permit any of its Subsidiaries to purchase capital stock or otherwise acquireissue or authorize the issuance of any other securities in respect of, any in lieu of or in substitution for shares of its capital stock or (z) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries or any other securities convertible into thereof or exchangeable any rights, warrants or exercisable for options to acquire any such shares or other securities;
(ii) grant, issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock;
(ii) (A) issue, sell, pledge, dispose of any other voting securities or encumber any shares ofsecurities convertible into, or securities convertible into any rights, warrants or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind options to acquire, any shares of its capital stock such shares, voting securities or convertible securities, except upon exercise of any class or any other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); (B) transfer, lease (other than leases for equipment entered into in the ordinary course for construction, maintenance and facilities development projects), 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 indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any PersonOption;
(iii) amend its certificate of incorporation, by-laws or other comparable organizational documents;
(iv) acquire or agree to acquire (x) by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, limited liability company, partnership, joint venture, association or other business organization or division thereof or (y) any assets or services of any kind other than (A) grant pursuant to written purchase orders issued in the ordinary course of business and in customary amounts consistent with past practices or provide any severance (B) acquisitions of assets or termination payments services in the ordinary course of business and in customary amounts consistent with past practices that, individually, do not exceed $25,000;
(v) sell, lease, license, mortgage or benefits otherwise encumber or subject to any director, officer Lien or employee otherwise dispose of any Acquired Company exceptof its properties or assets, in the case of employees who are not officers, other than in the ordinary course of business consistent with past practice, that are material to the Company and its subsidiaries taken as a whole;
(Bvi) incur any indebtedness, except for borrowings for working capital purposes not in excess of recent past practice and current lending arrangements;
(vii) make or agree to make any new capital expenditure or capital expenditures which in the aggregate are in excess of $100,000;
(viii) pay (or commit to pay) any bonus or other incentive compensation to any officer, director, partner or other employee or grant (or commit to grant) to any officer, director, partner or employee any other increase the in compensation, bonus except, in the case of employees who are not executive officers or pensiondirectors, welfarenormal salary increases consistent with recent practice;
(i) enter into, adopt or amend (or commit to enter into, adopt or amend) any employment, retention, change in control, collective bargaining, deferred compensation, severance, retirement, bonus, profit-sharing, stock option or other equity, pension or welfare plan or agreement maintained for the benefit of any officer, director, partner or employee, except as required by law, or (ii) except as required by agreements set forth on the Disclosure Schedule, grant or pay (or commit to grant or pay) any severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of termination compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan officer, director, partner or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans to directors, officers or employees of any Acquired Companyemployee;
(ivx) commence make any tax election inconsistent with past practices or settle or compromise any claims or litigation to which an Acquired Company is a party or is threatened to be made a party material income tax liability;
(xi) except with respect to non-material disputes as may arise from time to time in the ordinary course of business of such Acquired Company that involve only or except as would not reasonably be expected to have a Material Adverse Effect on the payment of monetary damages not in excess (A) of $100,000 individually or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h)Company, in amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017);
(v) (A) modify, amend, enter into amend or terminate any material contract or agreement to which the Company Contract other than in the ordinary course of business or any subsidiary is a party or waive, release or assign any material rights or claims with respect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearance;
(vi) make any Tax election, settle or compromise any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(vii) 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;
(viii) 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;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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;
(xi) enter into any new business linethereunder;
(xii) (A) adopt a plan make any material change to its accounting methods, principles or agreement of complete or partial liquidationpractices, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Companyexcept as may be required by generally accepted accounting principles; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; andor
(xiii) authorize, or commit or enter into an agreement agree to do take, any of the foregoingforegoing actions.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder.
Appears in 2 contracts
Sources: Merger Agreement (Defiance Inc), Merger Agreement (General Chemical Group Inc)
Interim Operations. (a) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretionClosing Time, and except as otherwise set forth in Section 5.1 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement), unless the Parent has consented in writing thereto, the Company shall ensure that (i) the business and operations of the Acquired Companies shall be conducted (A) in the ordinary and usual course and (B) in compliance with all applicable Laws and the requirements of all Material Contracts, and (ii) to the extent consistent therewith, each Acquired Company shall use its respective reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.
(b) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall notshall, and shall cause each of the other Acquired Companies not its subsidiaries to:
(ia) conduct its business and operations only in the ordinary course of business consistent with past practice;
(Ab) use reasonable efforts to preserve intact the business, organization, goodwill, rights, licenses, permits and franchises of the Company and its subsidiaries and maintain their existing relationships with customers, suppliers and other persons having business dealings with them, the loss of any of which would be reasonably likely to result in a Material Adverse Effect on the Company;
(c) use reasonable efforts to keep in full force and effect adequate insurance coverage and maintain and keep its properties and assets in good repair, working order and condition, normal wear and tear excepted;
(d) not amend or modify its respective charter or certificate of incorporation, by-laws, or other charter or organization documents;
(e) not authorize for issuance, issue, sell, pledgegrant, dispose of deliver, pledge or encumber or agree or commit to issue, sell, grant, deliver, pledge or encumber any shares of any class or series of capital stock owned by it in of the Company or any of its Subsidiaries; (B) amend subsidiaries or waive any other equity or propose to amend voting security or waive equity or voting interest in the Company or any provision of its certificate subsidiaries, any securities convertible into or exercisable or exchangeable for any such shares, securities or interests, or any options, warrants, calls, commitments, subscriptions or rights to purchase or acquire any such shares, securities or interests (other than issuances of incorporation or bylaws; Shares upon exercise of Company Stock Options granted prior to the date of this Agreement and disclosed pursuant to Section 3.2 to directors, officers, employees and consultants of the Company in accordance with the Company Option Plans as currently in effect);
(Cf) not (i) split, combine or reclassify its outstanding any shares of capital its stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its stock; , (Dii) in solely the case of the Company, declare, accrue, set aside or pay any dividend payable in cashdividends on, stock or property make other distributions in respect of, any of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries; the Company's stock, or (Eiii) repurchase, redeem or otherwise acquire, except as may be required by the Company Stock Plansor agree or commit to repurchase, or permit any of its Subsidiaries to purchase redeem or otherwise acquire, any shares of its capital stock or other equity or debt securities or equity interests of the Company or any securities convertible into or exchangeable or exercisable for any shares of its capital stocksubsidiaries;
(iig) (A) issue, sell, pledge, dispose of not amend or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights otherwise modify the terms of any kind to acquire, any shares of its capital stock of any class Company Stock Options or any other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than Option Plans, the sale by a Subsidiary effect of the Company of assets pursuant which shall be to a Contract executed prior make such terms more favorable to the date of this Agreement); (B) transfer, lease (other than leases holders thereof or persons eligible for equipment entered into in the ordinary course for construction, maintenance and facilities development projects), 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 indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any Personparticipation therein;
(iiih) (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of any Acquired Company except, in the case of employees who are not officers, other than regularly scheduled seniority increases in the ordinary course of business consistent with past practice, (B) not increase the compensation payable or to become payable to any directors, officers or employees of the Company or any of its subsidiaries, or grant any severance or termination pay to, or enter into any employment or severance agreement with any director or officer of the Company or any of its subsidiaries, or establish, adopt, enter into or amend in any material respect or take action to accelerate any material rights or benefits under any collective bargaining, bonus, profit sharing, thrift, compensation, bonus or stock option, restricted stock, pension, welfareretirement, profit-sharingdeferred compensation, employment, termination, severance or other benefits ofplan, pay any bonus toagreement, trust, fund, policy or make any new equity awards to arrangement for the benefit of any director, officer or employee of the Company of any Acquired Companyof its subsidiaries;
(i) not acquire or agree to acquire (including, without limitation, by merger, consolidation, or acquisition of stock, equity securities or interests, or assets) any corporation, partnership, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets of any other person outside the ordinary course of business consistent with past practice or any interest in any real properties (Cwhether or not in the ordinary course of business);
(j) enter intonot incur, adoptassume or guarantee any indebtedness for borrowed money (including draw-downs on letters or lines of credit) or issue or sell any notes, extendbonds, amend debentures, debt instruments, evidences of indebtedness or renew other debt securities of the Company or any employmentof its subsidiaries or any options, severancewarrants or rights to purchase or acquire any of the same, except for (i) renewals of existing bonds and letters of credit in the ordinary course of business not to exceed $1,000,000 in the aggregate; and (ii) advances, loans or other indebtedness in the ordinary course of business consistent with past practice in an aggregate amount not to exceed $1,000,000;
(k) not sell, lease, license, encumber or otherwise dispose of, or agree to sell, lease, license, encumber or otherwise dispose of, any material properties or assets of the Company and its subsidiaries taken as a whole;
(l) not authorize or make any capital expenditures (including by lease) in excess of $1,000,000 in the aggregate for the Company and all of its subsidiaries;
(m) not make any material change in controlany of its accounting or financial reporting (including tax accounting and reporting) methods, termination, deferred compensation principles or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedpractices, except as may be required by GAAP, GAAP or (H) forgive any loans to directors, officers or employees of any Acquired Companyapplicable tax laws;
(ivn) commence not make any material tax election or settle or compromise any claims material United States or litigation to which an Acquired Company is a party or is threatened to be made a party foreign tax liability;
(o) except with respect to non-material disputes as may arise from time to time in the ordinary course of business of such Acquired Company that involve only the payment of monetary damages consistent with past practice, not in excess (A) of $100,000 individually or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h), in amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017);
(v) (A) modify, amend, enter into modify or terminate any material Contract required to be listed in Section 3.15 of the Company Contract other than in the ordinary course of business Disclosure Schedule or waive, release or assign any material rights or claims with respect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearancethereunder;
(vip) make any Tax election, settle or compromise any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(vii) 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;
(viii) 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;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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;
(xi) enter into any new business line;
(xii) (A) not adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part any of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Companysubsidiaries; and
(xiiiq) authorizeexcept as to subsections (a), (b) and (c) of this Section 5.1, not agree or commit in writing or enter into an agreement otherwise to do any of the foregoing.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder.
Appears in 2 contracts
Sources: Merger Agreement (Ion Beam Applications S A), Merger Agreement (Ion Beam Applications S A)
Interim Operations. (a) From After the date of this Agreement until hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing in Closing, Seller covenants and agrees to cause each Acquired Entity to conduct its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall ensure that (i) the business and operations of the Acquired Companies shall be conducted (A) in the ordinary and usual course and (B) in compliance with all applicable Laws and the requirements of all Material Contractsand, and (ii) to the extent consistent therewith, Seller shall cause each Acquired Company shall Entity to use its respective commercially reasonable efforts to (x) preserve its business organization organizations intact and maintain its existing relations and goodwill with all Governmental Entities, customers, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.
associates and (by) From keep available the services of its present key employees and key agents. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the Effective Time Closing, except (unless Parent shall otherwise approve in writing in its sole discretion, and except A) as otherwise expressly contemplated by this Agreement), the Company shall not(B) as Buyer may approve in writing or (C) for transactions set forth on Schedule 5.1, and Seller shall cause each of the other Acquired Companies Entity not to:
(i) (A) issueadjust, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend or waive or propose to amend or waive any provision of its certificate of incorporation or bylaws; (C) split, combine or reclassify its outstanding capital stock, (B) grant (whether or not for consideration) any Person any option or other right to acquire any shares of capital stock or other securities, (C) issue (whether or not for consideration) any shares of capital stock or other securities, or (D) enter into any Contract with respect to the sale, voting, registration or repurchase of capital stock or other securities;
(ii) declare or pay any non-cash dividend or make any non-cash distribution in respect of, or repurchase or redeem, any shares of capital stock; ;
(Diii) declaredirectly or indirectly sell, accruetransfer, set aside pledge, otherwise create any Encumbrance on or pay otherwise dispose of any dividend payable assets, except for sale of products and services in cash, the ordinary course of business;
(iv) amend its governing documents;
(v) merge or consolidate with any other Person;
(vi) acquire assets (other than in the ordinary course of business) or capital stock or property in respect other securities of any capital stock other than dividends from its direct Person;
(vii) enter into or indirect whollymaterially modify any material employment, consulting, severance, stay-owned Subsidiaries; pay, termination or (E) repurchasesimilar Contracts with, redeem or grant any bonuses, equity awards, salary increases, severance, pension, retirement or termination pay to, any Employee, or otherwise acquirematerially increase the compensation or benefits provided to any Employee, except as may be required by the Company Stock Plans, existing Contract 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;
(ii) (A) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); (B) transfer, lease (other than leases for equipment entered into in the ordinary course for construction, maintenance and facilities development projects), 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 indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any Person;
(iii) (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of any Acquired Company except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice, business;
(Bviii) increase the compensation, bonus enter into or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus to, or make adopt any new equity awards to any director, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or materially increase benefits under or renew, amend or terminate any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans to directors, officers or employees of any Acquired Companyapplicable Law;
(ivix) commence or settle or compromise hire any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (new Employees, except with respect to non-material disputes as may arise from time to time in the ordinary course of business of such Acquired Company that involve only the payment of monetary damages with respect to Employees with an annual base salary and incentive compensation opportunity not in excess to exceed $100,000;
(A) make any material Tax election (other than such elections which are consistent with the most recent past practice of $100,000 individually the relevant Acquired Entity) or $250,000 in the aggregate and rescind or change any material Tax election or adopt or change any method of accounting, (B) in the case enter into any settlement of such disputes disclosed on Section 6.1(h)or compromise any material Tax liability, in amounts not exceeding 25% (C) change any annual Tax accounting period, (D) enter into a closing agreement for any material amount of the amount accrued Tax, (E) surrender any right to any material Tax refund or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017)(F) file any amended Tax Return or refund claim with respect to any material Tax;
(vxi) (A) modifymaterially amend or terminate, amend, enter into or terminate any material Company Contract other than in the ordinary course of business or waive, release or assign any material rights or claims with respect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearance;
(vi) make any Tax election, settle or compromise any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any Material Contract or material aspect of its method of accounting for Tax purposesPermit, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(vii) permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled or terminated except other than in the ordinary and usual course of business;
(viiixii) take enter into any action or omit to take any action Contract that would cause constitute a Material Contract, other than in the ordinary course of business;
(xiii) enter into, amend, terminate or waive any provision of any Contract with Seller or any of its representations and warranties herein to become untrue in any material respect;
(ix) authorize Subsidiaries or enter into any ▇▇▇▇▇▇new transaction with Seller or any of its Subsidiaries, other than in the ordinary course of business;
(xxiv) enter into, amend, renew, terminate or materially increase benefits under any labor or collective bargaining agreement;
(xv) incur any indebtedness for borrowed money, other than in the ordinary course of business;
(xvi) change any method of accounting or accounting practice or policy used by the Acquired Entities, other than such changes required by GAAP;
(xvii) fail to exercise any rights of renewal with respect to any material Leased Real Property that by its terms would otherwise expire;
(xviii) settle or compromise any material Claims;
(xix) forgive or cancel any material Debts or terminate or waive any material rights;
(xx) incur any capital expenditure or commitment in excess of the annual capital expenditure budget of the Acquired Entities previously provided to Buyer;
(xxi) enter into any agreement that limits the ability of any Acquired Companycommodity hedging, or would limit the ability of Parent foreign exchange hedging or any Subsidiary other type of Parent (including any Acquired Company) after financial instrument other than in the Effective Time, to compete in or conduct any line ordinary course of business or compete with any Person in any geographic area or during any period;business; or
(xixxii) enter into any new business line;
(xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent agree to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(xiii) authorize, commit or enter into an agreement to do take any of the foregoingforegoing actions.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder.
Appears in 1 contract
Sources: Stock Purchase Agreement (Aleris International, Inc.)
Interim Operations. During the period from March 31, 1998 and continuing until the Closing:
(a) From the date of this Agreement until the Effective Time The Shareholders agree (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise 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 ensure that (i) the carry on its business and operations of the Acquired Companies shall be conducted (A) in the usual, regular and ordinary and usual course and (B) in compliance with all applicable Laws and substantially the requirements of all Material Contractssame manner as heretofore conducted and, and (ii) to the extent consistent therewithwith such business, each Acquired Company shall use its respective all reasonable efforts to preserve intact its present business organization intact and maintain its existing relations and goodwill with customers, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.organization,
(b2) From The Company shall not and shall not propose to: (a) declare, set aside or pay any dividend, on, or make other distributions in respect of, any of its capital stock, or purchase or redeem any shares of its capital stock other than a cash dividend to be distributed to the date Shareholders in an amount equal to the Shareholders' liability for federal and state taxes on the earnings from operations of this Agreement until the Effective Time Company during 1998 through the Closing Date (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated exclusive of any income or gain on sale associated with the transactions covered by this Agreement), the Company shall not, and shall cause each of the other Acquired Companies not to:
(i) (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiariesas more fully described at Section 5.4 hereafter; (B) amend or waive or propose to amend or waive any provision of its certificate of incorporation or bylaws; (Cb) split, combine or reclassify its outstanding shares of capital stock; (D) declare, accrue, 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, except as may be required by the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or issue, authorize or propose the issuance of any other securities convertible into in respect of, in lieu of or exchangeable in substitution for shares of its capital stock; (c) redeem, repurchase or exercisable for otherwise acquire any shares of its capital stock;; or (d) otherwise change its capitalization.
(ii3) (A) Except as contemplated by this Agreement, the Company shall not sell, issue, sell, pledge, dispose of authorize or encumber any shares propose the sale or issuance of, pledge or securities convertible into purchase or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquirepropose the purchase of, any shares of its capital stock of any class or securities convertible into, or rights, warrants or options to acquire, any such shares or other property convertible securities.
(4) The Company shall not amend its articles of incorporation or assets its Bylaws.
(other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the 5) The Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); (B) transfer, lease (other than leases for equipment entered into in the ordinary course for construction, maintenance and facilities development projects), license, guarantee, shall not sell, mortgagelease, pledge, encumber or otherwise dispose of or agree to sell, lease, pledge, encumber any other property or assets (including capital stock of otherwise dispose of, any of its Subsidiaries) or incur or modify any indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any Person;
(iii) (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of any Acquired Company except, in the case of employees who that are not officers, material except in the ordinary course of business consistent with past practice, prior practice and in no event amounting in the aggregate to more than $75,000.
(B6) increase the compensation, bonus The Company shall not incur any indebtedness for borrowed money or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by guarantee any such indebtedness or issue or sell any debt securities of the Company Benefit Plan, (G) change or guarantee any actuarial or debt securities of others other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans to directors, officers or employees of any Acquired Company;
(iv) commence or settle or compromise any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (except with respect to non-material disputes as may arise from time to time than in the ordinary course of business of such Acquired Company that involve only the payment of monetary damages not consistent with prior practice and in excess no event (Adisregarding for these purposes ordinary trade accounts payable and operating accruals) of $100,000 individually or $250,000 amounting in the aggregate and to more than $75,000.
(B7) The Company shall not adopt or amend 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 executive officer.
(9) The Company shall not acquire (by merger, 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 case ordinary course of such disputes disclosed on Section 6.1(h)business, in amounts not exceeding 25% purchase of the amount accrued any property or reserved against in the unaudited consolidated balance sheet assets, of the Acquired Companies as of September 30, 2017);any other individual or entity.
(v10) (A) modify, amend, enter into or terminate The Company shall not make any material tax election or settle or compromise any material federal, state, local or foreign tax liability.
(11) The Company shall not waive, release, grant or transfer any rights of material value or modify or change in any material respect any Material Contract other than in the ordinary course of business or waive, release or assign any material rights or claims and consistent with respect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearance;past practice.
(vi12) make any Tax election, settle or compromise any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(vii) 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;
(viii) 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;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) The Company shall not enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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;
(xi) enter into any new business line;
(xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(xiii) authorize, commit or enter into an agreement arrangement to do any of the foregoing.
(c) Nothing contained . 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 shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy becoming untrue in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunderrespect.
Appears in 1 contract
Interim Operations. (a) From During the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement)Interim Period, the Company shall ensure that (i) the conduct its business and operations of the Acquired Companies shall be conducted (A) in the ordinary course consistent with past practice and usual course and (B) in compliance with all applicable Laws and the requirements of all Material Contracts, and (ii) to the extent consistent therewith, each Acquired Company shall use its respective reasonable best efforts to preserve intact its and the Company Subsidiaries' business organization intact organizations and maintain relationships with third parties and its existing relations present officers and goodwill with customersemployees. Without limiting the generality of the foregoing, strategic partnersfrom the date hereof until the Closing Date, suppliersexcept as set forth on Schedule 6.01, distributors, creditors, lessors, employees and business associates.neither the Company nor any Company Subsidiary will:
(a) adopt or propose any change in its organizational documents;
(b) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall not, and shall cause each of the other Acquired Companies not to:
(i) (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend or waive or propose to amend or waive any provision of its certificate of incorporation or bylaws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, accrue, 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, except as may be required by the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ii) (A) issue, sell, pledge, dispose of or encumber any shares ofof its capital stock, or any securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, directly or indirectly, any shares of its capital stock of any class or any other property or assets assets;
(c) merge or consolidate with any other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); Person;
(Bd) transfersell, lease (other than leases for equipment entered into in the ordinary course for construction, maintenance and facilities development projects)lease, license, guarantee, sell, mortgage, pledge, pledge or otherwise dispose of or encumber any other assets or property or assets (including capital stock of any of its Subsidiaries) or incur or modify any indebtedness or other Liability in amounts greater than an amount exceeding $75,000 individually and $500,000 25,000 in the aggregate; , except pursuant to existing contracts or commitments which have been disclosed to Parent or in the ordinary course consistent with past practice;
(Ce) make any commitments for, or make or authorize or commit for any capital expenditures other than pursuant to outside the ordinary course of business consistent with past practice, or make any commitments for, or make or authorize any capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed expenditures for capital equipment for use by the Company at its premises in excess of $10,000 individually or $25,000 in the aggregate, except pursuant to existing contracts or commitments which have been disclosed to the Buyer or in the ordinary course consistent with respect to calendar year 2018 or, past practice;
(f) by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any Person;
(iiig) settle or compromise any material claims or litigation or, modify, amend or terminate any of the Material Contracts or waive, release or assign any material rights or claims;
(Ah) grant permit any insurance policy naming the Company as a beneficiary or provide any severance loss-payable payee to be canceled or termination payments or benefits to any director, officer or employee terminated;
(i) increase the compensation of any Acquired Company except, employee or amend any Benefit Plan in the case of employees who are not officers, a manner which would increase benefits thereunder except in the ordinary course of business consistent with past practice, (B) increase the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans to directors, officers or employees of any Acquired Company;
(iv) commence or settle or compromise any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (except with respect to non-material disputes as may arise from time to time in the ordinary course of business of such Acquired Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h), in amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017);
(v) (A) modify, amend, enter into or terminate any material Company Contract other than in the ordinary course of business or waive, release or assign any material rights or claims with respect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearance;
(vi) make any Tax election, settle or compromise any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(vii) 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;
(viiij) take any action or omit to take any action that would be reasonably likely, taking into account the Company's current credit evaluation practices, to cause any of its representations and warranties herein to become untrue in any material and adverse respect;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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;
(xi) enter into any new business line;
(xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(xiiik) authorize, agree or commit or enter into an agreement to do any of the foregoing.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder.
Appears in 1 contract
Interim Operations. Except as set forth in Schedule 6.1, during the period from the date hereof and continuing until the earlier of the termination of this Agreement pursuant to Article IX or the Closing, except as expressly provided in this Agreement or as may be consented to in writing by Parent (such consent not to be unreasonably withheld or delayed):
(a) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall ensure that and each of the Company Subsidiaries shall: (i) conduct its business in the business and operations of the Acquired Companies shall be conducted (A) same manner as heretofore conducted, only in the ordinary and usual course and (B) in material compliance with all applicable Laws and the requirements of all Material Contracts, and Laws; (ii) to the extent consistent therewithpay its debts, each Acquired Company shall taxes and other liabilities when due and perform other material obligations when due; and (iii) use its respective commercially reasonable efforts to (A) preserve intact its present business organization, (B) except as provided in (f) below keep available the services of its present officers and employees and (C) preserve its business organization intact and maintain its existing relations and goodwill relationships with customers, strategic partners, suppliers, distributors, creditorslicensors, lessors, employees licensees and other Persons with which it has significant business associates.dealings;
(b) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the no Company shall not, and shall cause each of the other Acquired Companies not toSubsidiary shall:
(i) amend its Certificate of Incorporation or Bylaws or similar organizational documents;
(Aii) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend or waive or propose to amend or waive any provision of its certificate of incorporation or bylaws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, accrue, 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, except as may be required by the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ii) (A) issue, selltransfer, pledge, dispose of or encumber any shares ofof any class or series of its capital stock, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of any class or series of its capital stock (except for the issuance of any class or any other property or assets (other than Shares capital stock issuable pursuant to upon the exercise of options and other stock-based awards outstanding on as of the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreementhereof); (B) transfer, lease (other than leases for equipment entered into in the ordinary course for construction, maintenance and facilities development projects), 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 indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any Person;
(iii) set aside or pay any dividend or other distribution payable in cash, stock or property with respect to any shares of any class or series of its capital stock;
(Aiv) grant split, combine or provide reclassify any severance shares of any class or termination payments series of its stock; or
(v) redeem, purchase or otherwise acquire directly or indirectly any shares of any class or series of its capital stock, or any instrument or security which consists of or includes a right to acquire such shares;
(c) neither the Company nor any Company Subsidiary shall: (i) incur or assume any Indebtedness, modify the terms of any Indebtedness or other liability; (ii) assume or guarantee the obligations of any other Person; (iii) enter into any "keep well" or other agreement to maintain any financial statement condition of any other Person (other than any Company Subsidiary); or (iv) enter into any arrangement having the economic effect of any of the foregoing; provided, however, notwithstanding the foregoing, the Company shall not be restricted from incurring additional Indebtedness pursuant to the terms of the Convertible Notes;
(d) neither the Company nor any Company Subsidiary shall make changes in the compensation (including equity compensation, whether payable in cash or otherwise) or benefits payable or to become payable to any directorof their employees, officer or employee of any Acquired Company except, in the case of employees who are not officers, except in the ordinary course of business consistent with past practice, (B) increase but in no event which shall in the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans to directors, officers or employees of any Acquired Companyaggregate exceed $250,000;
(ive) commence or settle or compromise neither the Company nor any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (except with respect to non-material disputes as may arise from time to time in the ordinary course of business of such Acquired Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h), in amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017);
(v) (A) modify, amend, enter into or terminate Subsidiary shall hire any material Company Contract employees other than in the ordinary course of business consistent with past practice; provided, however, that no Company or waiveCompany Subsidiary shall hire any employee whose annual compensation would exceed $100,000 without the prior approval of Parent, release which such approval shall not be unreasonably withheld or assign any material rights or claims with respect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearancedelayed;
(vif) make neither the Company nor any Tax election, settle or compromise Company Subsidiary shall terminate any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any material aspect of its method their employees other than in the ordinary course of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent business consistent with the past practice without the prior approval of Parent, which such approval shall not be unreasonably withheld; provided, however, that if the Acquired CompaniesCompany or any Company Subsidiary shall terminate any of their employees prior to the Closing other than as directed by Parent, surrender any claim for a refund the Company shall pay all severance and other costs resulting from or arising out of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessmentsuch termination;
(viig) neither the Company nor any Company Subsidiary shall voluntarily permit any insurance policy naming it as a beneficiary or loss-a loss payable payee to be cancelled or terminated except in the ordinary and usual course of businessterminated;
(viiih) take neither the Company nor 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;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Company Subsidiary of Parent (including any Acquired Company) 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;
(xi) enter into any new business line;
(xii) (A) shall adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization, or otherwise acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any Person or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to its business;
(i) neither the Company nor any Company Subsidiary shall change in any material reorganization respect any of such Acquired Company; the accounting methods used by it unless required or permitted by GAAP;
(Bj) no Company Subsidiary shall make or change any Tax election, change an annual accounting period, adopt or change any material Tax accounting method, file any amended Tax Return, enter into any closing agreement, settle or consent to any Tax claim, surrender any right to claim a refund of Taxes, or support consent to the commencement extension or waiver of an involuntary case against the statutory period of limitations applicable to any material Tax claim;
(k) neither the Company nor any Company Subsidiary shall voluntarily take, or agree to or commit to take, any action that would result in any of the conditions to the Closing set forth in Article VIII not being satisfied, or would make any representation or warranty of the Company contained herein inaccurate in any material respect at, or as of any time prior to, the Closing Date, or that would materially impair the ability of the parties hereto to consummate the Transactions in accordance with the terms hereof or materially delay such Acquired consummation;
(l) neither the Company nor any Company Subsidiary shall enter into any material partnership arrangements, material joint software development agreements, material joint ventures or other material strategic alliances or material strategic collaborations, except, in any case, as such are terminable upon not more than thirty (30) days notice without material payment or penalty of any kind;
(m) neither the Company nor any Company Subsidiary shall sell, lease, license, mortgage or otherwise encumber or dispose of any properties or assets which are material, individually or in the aggregate, to its business, except sales, licenses or other dispositions in the ordinary course of business consistent with past practice;
(n) neither the Company nor any Company Subsidiary shall make any loans, advances or capital contributions to, or investments in, any other Person, other than loans or investments by the Company, or any Company Subsidiary, to or in the Company or any Company Subsidiary;
(o) neither the filing Company nor any Company Subsidiary shall settle any claim, action or proceeding involving money damages, except to the extent subject to reserves reflected in the Financial Statements;
(p) neither the Company nor any Company Subsidiary shall subject itself, or the Parent, to any non-compete on any of an involuntary petition seeking bankruptcytheir respective businesses;
(q) neither the Company nor any Company Subsidiary shall enter into any Contract the effect of which would be to grant to a third party following the Closing Date any actual or potential right of license to any of its Intellectual Property, winding upexcept for non-exclusive licenses of Trademarks or Copyrights in the ordinary course of business consistent with past practice granted in connection with, dissolutionor incidental to, liquidationthe provision of services in the ordinary course of business consistent with past practice;
(r) neither the Company nor any Company Subsidiary shall grant any exclusive rights with respect to any of its Intellectual Property;
(s) neither the Company nor any Company Subsidiary shall enter into, administrationmodify or amend in a manner adverse in any material respect to such party any material Contract, moratoriumterminate any material Contract, reorganization or waive, release or assign any material rights or claims under any material Contract; provided, however, that neither this covenant nor any other relief provision in respect this Agreement shall restrict the ability of such Acquired the Company or its debtsany Company Subsidiary from entering into advertising or paid inclusion agreements, Internet search services agreements or agreements involving payments by the Company of a substantial part less than $75,000, in each such case, which are entered into in the ordinary course of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Companybusiness and consistent with past practice; and
(xiiit) authorize, commit or neither the Company nor any Company Subsidiary shall enter into an agreement any Contract to do any of the foregoing.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder.
Appears in 1 contract
Interim Operations. (a) From and after the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement)hereof, the Seller shall cause the Company shall ensure that (i) to conduct the business and operations of the Acquired Companies shall be conducted (A) Business in the ordinary course consistent with past practice and usual course and (B) in compliance with all applicable Laws and the requirements of all Material Contracts, and (ii) to the extent consistent therewith, each Acquired Company shall use its respective commercially reasonable efforts to preserve its business organization intact the assets, properties and maintain its existing relations and goodwill relationships with customers, strategic partners, suppliers, distributors, creditors, lessors, employees and third parties having material business associates.
dealings with the Company. Without limiting the generality of the foregoing, except (a) as otherwise required by this Agreement, (b) From for actions approved by the Purchaser (which approval shall not be unreasonably withheld, conditioned or delayed), (c) as required to comply with applicable Law or (d) as set forth on Section 5.1 of the Disclosure Schedule, from and after the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement)hereof, the Company Seller shall notnot (solely with respect to the Company), and shall cause each the Company not to take any of the other Acquired Companies not tofollowing actions:
(i) (A) issueadopt any change in its certification of incorporation, sell, pledge, dispose of bylaws or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend other similar organizational or waive or propose to amend or waive any provision of its certificate of incorporation or bylaws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, accrue, 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, except as may be required by the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stockgoverning documents;
(ii) (A) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); (B) transfer, lease (other than leases for equipment entered into in the ordinary course for construction, maintenance and facilities development projects), 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 indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any Person;
(iii) (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of any Acquired Company except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice, (B) increase the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans to directors, officers or employees of any Acquired Company;
(iv) commence or settle or compromise any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (except with respect to non-material disputes as may arise from time to time in the ordinary course of business of such Acquired Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h), in amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017);
(v) (A) modify, amend, enter into or terminate any material Company Contract other than in the ordinary course of business or waive, release or assign any material rights or claims with respect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearance;
(vi) make any Tax election, settle or compromise any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(vii) 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;
(viii) 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;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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;
(xi) enter into any new business line;
(xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, merger, consolidation, restructuring, recapitalization or other material reorganization reorganization;
(iii) (A) issue, sell, transfer, pledge, dispose of such Acquired Company; or encumber the Equity Interests or any other equity or similar interests of the Company or (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcygrant any option, winding up, dissolution, liquidation, administration, moratorium, reorganization warrant or other relief right to purchase or obtain, or otherwise dispose of or encumber, the Equity Interests or any other equity or similar interests of the Company;
(iv) enter into or consummate any transaction or series of transactions involving the acquisition of the business, stock, assets or other properties of any other Person, whether by merger, consolidation, purchase or otherwise, for consideration in excess of $250,000, individually, or $250,000, in the aggregate;
(v) sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber, or subject to any Encumbrance (other than Permitted Encumbrance) or otherwise dispose of any portion of its properties or assets with a value or purchase price in the aggregate in excess of $250,000 other than (A) in the ordinary course of business, (B) pursuant to existing agreements in effect prior to the date hereof, (C) as may be required by applicable Law or any Governmental Authority in order to permit or facilitate the consummation of the transactions contemplated by this Agreement, or (D) dispositions of obsolete or worthless assets;
(vi) incur, assume, guarantee, prepay or otherwise become liable for any Indebtedness, other than (A) in the ordinary course of business, and (B) Indebtedness incurred pursuant to agreements in effect prior to the execution of this Agreement;
(vii) enter into, renew, amend or modify in any material respect, or terminate any Material Contract, other than in the ordinary course of business, or increase in any material respect the benefits under any Company Plan or modify any Company Plan where such modification has a material cost impact on the Company;
(viii) (A) incur or commit to any capital expenditures other than as set forth on the cap expenditure budget set forth on Section 5.1(viii) of the Disclosure Schedule, (B) omit to incur any capital expenditure set forth on the cap expenditure budget set forth on 5.1(viii) of the Disclosure Schedule or (C) enter into any new line of business;
(A) make, change or revoke any material Tax election, (B) file any amended Tax Return, or (C) settle or compromise any material liability for Taxes or surrender any material claim for a refund of Taxes;
(x) settle or compromise any pending or threatened action, suit, investigation, arbitration or administrative or other proceeding for an amount in excess of a specific accrual and reserve established in the Financial Statements in respect of such Acquired matter, except for any settlement or compromise that arises in the ordinary course to the extent such settlement or compromise does not involve the incurrence or expenditure by the Company of cash payments (or payment commitments) of more than $100,000 in the aggregate;
(xi) take any action or omit to take any action that could reasonably be expected to cause any Permit to be suspended or revoked; or
(xii) change its debts, financial accounting policies or of a substantial part procedures or any of its assetsmethods of reporting income, under any federaldeductions or other items for financial accounting purposes, state except as required by GAAP or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effectapplicable Law; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; andor
(xiii) authorize, or agree or commit to do, whether in writing or enter into an agreement to do otherwise, any of the foregoing.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder.
Appears in 1 contract
Sources: Equity Purchase Agreement (Primus Telecommunications Group Inc)
Interim Operations. (a) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by earlier of the Funding Date or the termination of this Agreement), unless the prior written consent of the Investors shall have been obtained, the Company shall ensure covenants and agrees that (i) the business and operations of the Acquired Companies shall be conducted (A) in the ordinary and usual course and (B) in compliance with all applicable Laws and the requirements of all Material Contracts, and (ii) it will not do or agree or commit to the extent consistent therewith, each Acquired Company shall use its respective reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.
(b) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall not, and shall cause each of the other Acquired Companies not to:
(i) (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend or waive or propose to amend or waive any provision of its certificate of incorporation or bylaws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, accrue, 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, except as may be required by the Company Stock Plansdo, or permit any of its Subsidiaries to purchase do or agree or commit to do, any of the following:
(a) amend the Company’s Certificate of Incorporation or bylaws or the certificate of incorporation or bylaws (or corresponding organizational documents) of any Company Subsidiaries,
(b) incur or guarantee any additional Indebtedness except for (i) intercompany Indebtedness, (ii) borrowings under the Company’s credit facilities as in effect on the date of this Agreement and overnight borrowing in the ordinary course of business consistent with past practice.
(c) repurchase, redeem, or otherwise acquireacquire or exchange, directly or indirectly, any shares of its capital stock shares, or any securities convertible into any shares, of the capital stock of the company or exchangeable or exercisable for any shares of its Subsidiaries, or make any other distribution in respect of the Company’s capital stock, except for repurchases made in connection with any Benefit Plan or cash dividends on Common Stock not to exceed $0.01 per share for each fiscal quarter;
(iid) (A) except for this Agreement, or pursuant to the exercise of stock options outstanding as of the date hereof and pursuant to and in accordance with the Benefit Plans as in existence on the date hereof, issue, sell, pledge, dispose of encumber, authorize the issuance of, enter into any contract to issue, sell, pledge, encumber, or encumber any shares authorize the issuance of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind otherwise permit to acquirebecome outstanding, any additional shares of its Common Stock or any other capital stock of any class the Company or any Subsidiaries, or any stock appreciation rights, or any option, warrant, or other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on right in respect of the date hereof under the Company Stock Plans and other than the sale by a Subsidiary capital stock of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); (B) transfer, lease (other than leases for equipment entered into in the ordinary course for construction, maintenance and facilities development projects), 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 indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any Person;
(iiie) (A) grant adjust, split, combine or provide reclassify any severance capital stock of the Company or termination payments any of its Subsidiaries or benefits to any director, officer issue or employee authorize the issuance of any Acquired other securities in respect of or in substitution for shares of Common Stock or any other capital stock of the Company exceptor any of its Subsidiaries, or sell, lease, mortgage, permit any Lien (other than, in the case of employees who the following subclause (ii), Permitted Liens that are not officersmaterial individually or in the aggregate), or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any Company Subsidiaries or (ii) any material asset other than in the ordinary course of business consistent with past practice;
(f) purchase any securities or make any material investment, either by purchase of stock or securities, contributions to capital, asset transfers, or purchase of any assets, in any Person other than a Company Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in the ordinary course of business consistent with past practice;
(i) other than as required by the agreements executed in connection with this Agreement and identified on the Disclosure Schedule, grant any increase in compensation or benefits to the employees or officers of the Company or any of its Subsidiaries, except for merit-based salary increases for employees other than officers in the ordinary course in accordance with past practice; (ii) pay any (x) severance or termination pay or (y) any bonus, in either case other than as required by written severance policies or written contracts in effect on the date of this Agreement or in the ordinary course of business consistent with past practice; (iii) enter into or amend any severance agreements with employees or officers of the Company or any of its Subsidiaries; (iv) grant any increase in fees or other increases in compensation or other benefits to directors of the Company or any of its Subsidiaries except in the ordinary course of business consistent with past practice; or (v) waive any stock repurchase rights, accelerate, amend or change the period of exercisability of any stock options or other equity rights or restricted stock, or reprice any stock options or other equity rights granted under a Benefit Plan or authorize cash payments in exchange for any stock options or other equity rights;
(h) enter into or amend any employment contract between the Company or any of its Subsidiaries and any Person that the Company or such Subsidiary does not have the unconditional right to terminate without liability (other than liability for services already rendered);
(i) adopt any new Benefit Plan or terminate or withdraw from, or make any change in or to, any Benefit Plans other than any such change that is required by law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such Benefit Plans, except as required by law, the terms of such Benefit Plans as in effect on the date hereof or in the ordinary course of business consistent with past practice;
(j) make any significant change in any accounting methods or systems of internal accounting controls, except as required by GAAP;
(k) make, change or revoke any material Tax election, (ii) change any of its methods of accounting for Tax purposes, (iii) settle or compromise any material Tax liability or any Tax disputes, claims, audits, examinations, or other proceedings, (iv) file any material amended Tax return or (v) enter into a “closing agreement” described in Section 7121 of the Code (or any corresponding or comparable provision of state, local or foreign Law);
(l) commence any litigation other than in the ordinary course of business consistent with past practice, or settle any litigation (Bi) increase the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, pay involving any bonus to, or make any new equity awards to any director, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, liability to the extent not already required by Company or any such of its Subsidiaries for money damages in excess of $500,000 or materially restricting or otherwise affecting the business or operations of the Company Benefit Plan, (G) change or any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, of its Subsidiaries or (Hii) forgive any loans relating to directors, officers or employees of any Acquired Companythe transactions contemplated hereby;
(ivm) commence or settle or compromise any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (except with respect to non-material disputes as may arise from time to time in the ordinary course of business of such Acquired consistent with past practice, enter into, modify, amend or terminate any Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually Significant Agreement or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h)waive, in amounts not exceeding 25% of the amount accrued release, compromise or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017)assign any material rights or claims;
(vn) (A) modify, amend, enter into any new line of business or terminate change in any material respect its lending, investment, risk and asset-liability management, interest rate or fee pricing with respect to depository accounts, hedging and other material banking or operating policies except as required by law or by rules or policies imposed by a Governmental Entity;
(o) make or commit to make any capital expenditure, except (i) capital expenditures of the Company Contract other than and its Subsidiaries in the ordinary course of business or waive, release or assign any material rights or claims with respect theretoon information technology used in the ordinary course of business not exceeding $5,000,000; or and (Bii) capital expenditures of the Company and its Subsidiaries in the ordinary course of business (1other than capital expenditures described in the foregoing clause (i)) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearancenot exceeding $3,000,000;
(vip) except as required by law or applicable regulatory authorities, make any Tax electionmaterial changes in its credit administration policies or loan rating system, settle or compromise any Tax claim or Liability, change (or otherwise make a request to any Governmental Entity to change) any material aspect of changes to its method of accounting for Tax purposespolicies and practices with respect to underwriting, file any amended Tax Returnpricing, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companiesoriginating, surrender any claim for a refund of a material amount of Taxesacquiring, selling, servicing, or consent buying or selling rights to any extension or waiver of the limitation period applicable to any material Tax claim or assessmentservice, loans;
(viiq) permit purchase or lease any insurance policy naming it as a beneficiary real property in respect of any branch or loss-payable payee other facility, or, without previously notifying and consulting with Investors, make any application to be cancelled open, relocate or terminated close, or open, relocate or close any branch or other facility;
(r) sell, transfer or otherwise dispose of any property or assets that are, individually or in the aggregate, material, except for the sale of, in each case in the ordinary and usual course of business, (i) Small Business Administration Loans, (ii) OREO and (iii) loans through the Mortgage Purchasing Department of the Bank;
(viiis) take any action without previously notifying and consulting with Investors, except for Loans or omit to take any action commitments for Loans that would cause any of its representations and warranties herein to become untrue in any material respect;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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;
(xi) enter into any new business line;
(xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(xiii) authorize, commit or enter into an agreement to do any of the foregoing.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made have previously been approved by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or Bank prior to the date of this Agreement; , make or acquire any Loan or issue a commitment (iiior renew or extend an existing commitment) for any Loan relationship aggregating in excess of $1,000,000, or amend or modify in any material breach respect any existing Loan relationship, that would result in total credit exposure to the applicable borrower (and its affiliates) in excess of $1,000,000;
(t) fail to comply with Regulatory Agreements or the C&D Order; or
(u) agree to take, make any covenant commitment to take, or obligation adopt any resolutions of the Company; and (iv) any event’s Board of Directors in support of, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to actions prohibited by this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder3.1.
Appears in 1 contract
Interim Operations. (a) From Except as otherwise expressly permitted by this Agreement, Holdco agrees, that, after the date of this Agreement until hereof and prior to the Effective Time Closing (unless Parent Buyer shall otherwise approve in writing in its sole discretionwriting, such approval not to be unreasonably withheld, conditioned or delayed) and except as otherwise expressly contemplated required by this Agreement)applicable Laws, the Company shall ensure that (i) the business and operations of the Acquired Companies shall be conducted (A) in the ordinary and usual course and (B) in compliance with all applicable Laws and the requirements of all Material Contracts, and (ii) to the extent consistent therewith, each Acquired Company shall use its respective reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.
(b) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall not, and Holdco shall cause each of the other Acquired businesses utilizing the Brand Assets to be operated in the Ordinary Course. Without limiting the generality of, and in furtherance of, the foregoing, from the date hereof until the Closing, except as otherwise contemplated by this Agreement or as Buyer may approve in writing (such approval not to be unreasonably withheld, conditioned or delayed), none of the Company nor (to the extent related to any business utilizing the Brand Assets) any Brand Companies shall, and Holdco and its Affiliates shall cause the Company and (to the extent related to any business utilizing the Brand Assets) each such Brand Company not to, do any of the following:
(ia) amend its articles of organization or limited liability company agreement;
(Ab) issueacquire any assets of a type or in a manner that is inconsistent with the scope and purpose of its business;
(c) merge or consolidate with any other Person, sellor recapitalize;
(d) sell all or substantially all of its assets;
(e) issue additional membership interests or admit additional Persons as members;
(f) borrow money, take any loans or refinance any borrowings, or execute and deliver on its own behalf any obligations, agreements, instruments or other documents of any character relating to any indebtedness, loans or other borrowings, including, mortgages, notes, deeds, trust indentures, guarantees and assignments, or pledge, dispose of mortgage or encumber any capital stock owned by it in its membership interests or any of its Subsidiaries; assets as security for any such borrowings, loans, guarantees or other assistance (B) amend or waive or propose to amend or waive any provision of its certificate of incorporation or bylaws; (C) splitin each case, combine or reclassify its outstanding shares of capital stock; (D) declare, accrue, 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, except as may be required contemplated by the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ii) (A) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); (B) transfer, lease (other than leases for equipment Licenses entered into in the ordinary course for construction, maintenance and facilities development projectsOrdinary Course), 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 indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (Dg) enter into any joint venture agreement, partnership agreement or similar agreement Contract with any Person;
(iii) (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of any Acquired Company except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice, (B) increase the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans to directors, officers or employees of any Acquired Company;
(iv) commence or settle or compromise any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (except with respect to non-material disputes as may arise from time to time in the ordinary course of business of such Acquired Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h), in amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017);
(v) (A) modify, amend, enter into or terminate any material Company Contract other than in the ordinary course of business or waive, release or assign any material rights or claims with respect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearance;
(vi) make any Tax election, settle or compromise any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(vii) 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;
(viii) 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;
(ix) authorize or enter into any ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or any Entity, other than other than as contemplated by the Transaction Documents;
(xh) make any material Tax election or change any method of Tax accounting;
(i) directly or indirectly: (i) sell, convey, transfer, pledge or otherwise encumber or dispose of the Transferred JV Interest, (ii) deposit such Transferred JV Interest into a voting trust or enter into a voting agreement or arrangement with respect to such Transferred JV Interest or grant any proxy with respect thereto or (iii) enter into any agreement that limits Contract with respect to the ability direct or indirect acquisition or sale, assignment, transfer or other disposition of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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 periodsuch Transferred JV Interest;
(xij) enter into declare, set aside, make or pay any new business line;dividend or other distribution, payable in cash, stock, property or otherwise; or
(xiik) (A) adopt a plan agree, authorize or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(xiii) authorize, commit or enter into an agreement to do any of the foregoing.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder.
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (B. Riley Financial, Inc.)
Interim Operations. (a) From The Company covenants and agrees that, after the date of this Agreement until hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall ensure that ):
(ia) the its business and operations of the Acquired Companies shall be conducted (A) in the ordinary and usual course and (B) in compliance with all applicable Laws and the requirements of all Material Contractsand, and (ii) to the extent consistent therewith, each Acquired Company it shall use its respective reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.;
(b) From the date of this Agreement until the Effective Time (unless Parent it shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall not, and shall cause each of the other Acquired Companies not to:
(i) form or acquire (Aby means of transfer, purchase or otherwise) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (Bii) amend or waive or propose to amend or waive any provision of its certificate articles of incorporation or bylawsby-laws or amend, modify or terminate the Stock Plans, other than as expressly required hereunder (including, without limitation, as set forth in Section 6.10); (Ciii) split, combine or reclassify its outstanding shares of capital stock; (Div) declare, accrue, 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, except as may be required by the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(iic) it shall not (Ai) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Voting Debt or any other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this AgreementPlans); (Bii) transfer, lease (other than leases for equipment entered into in the ordinary and usual course for constructionof business, maintenance and facilities development projects)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 indebtedness other material liability or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregatemodify any current material indebtedness; (Ciii) make or authorize or commit for any expenditures (including capital expenditures other than pursuant and expenditures relating to the capital appropriations/spending budgets set forth in use of Third-Party Intellectual Property Rights or the Company Disclosure Schedule after deducting amounts previously authorized development, marketing or committed by the Company with respect to calendar year 2018 in-licensing of any products) or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; entity in excess of (or reasonably likely to result in expenditures in excess of) $100,000 or (Div) authorize or enter into any joint venture agreement, partnership agreement or similar agreement with other commitment relating to the licensing of any Personof the Company's products or the marketing by the Company of a third-party's products;
(iiid) (A) grant it shall not terminate, establish, adopt, enter into, make any new grants or provide awards under, amend or otherwise modify, any severance Compensation and Benefit Plans or termination payments increase the salary, wage, bonus or other compensation or benefits to any director, officer or employee of any Acquired Company employees except, in the case of employees who that are not officersexecutive officers or directors of the Company, increases occurring in the ordinary and usual course of business consistent with past practice(which shall include normal periodic performance reviews and related compensation and benefit increases);
(e) it will not (x) declare, (B) increase the compensation, bonus set aside or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus todividends on, or make any new equity awards to other distributions in respect of, any directorof its capital stock, officer (y) split, combine or employee reclassify any of its capital stock or issue or authorize the issuance of any Acquired Companyother securities in respect of, in lieu of or in substitution for shares of its capital stock or (Cz) enter intopurchase, adoptredeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof (other than the acquisition of shares surrendered in whole or partial satisfaction of the exercise price for any stock options outstanding on the date hereof and properly exercised in accordance with their terms) or any rights, extend, amend warrants or renew options to acquire any employment, severance, change in control, termination, deferred compensation such shares or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans to directors, officers or employees of any Acquired Companysecurities;
(ivf) commence or it shall not settle or compromise any material claims or litigation to which an Acquired Company is a party or is threatened to be made a party (or, except with respect to non-material disputes as may arise from time to time in the ordinary and usual course of business of such Acquired Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h), in amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017);
(v) (A) modify, amend, enter into amend or terminate any of its material Company Contract other than in the ordinary course of business Contracts or waive, release or assign any material rights or claims with respect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearanceclaims;
(vig) it shall not make any Tax election, settle election or compromise any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(vii) permit any insurance policy naming it as a beneficiary or loss-payable payee to be cancelled canceled or terminated except in the ordinary and usual course of business;
(viiih) it shall continue to take all actions reasonably necessary in connection with the continued leasing or subleasing of Building One, but shall not enter into any further agreements relating to the lease or sublease of such property;
(i) it shall continue to take all actions reasonably necessary in connection with the valuation of and sale of equipment in Building One, but shall not enter into any agreements relating to the sale of any such equipment;
(j) it shall not incur additional indebtedness;
(k) it shall not 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;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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;
(xi) enter into any new business line;
(xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(xiiil) authorize, commit it will not authorize or enter into an agreement to do any of the foregoing.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder.
Appears in 1 contract
Sources: Merger Agreement (Skyepharma PLC)
Interim Operations. (a) From the date Execution Date until the earlier of Effective Time or the termination of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretionpursuant to Article 7, and except as otherwise expressly contemplated by this Agreement), the Company shall ensure that (i) the business and operations of the Acquired Companies shall be conducted (A) set forth in the ordinary and usual course and (B) in compliance with all applicable Laws and the requirements of all Material Contracts, and (ii) to the extent consistent therewith, each Acquired Company shall use its respective reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.
(b) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except Schedule 5.2 or as otherwise expressly contemplated by this Agreement)required herein, the Company shall not, and shall cause its officers, directors, employees, consultants and advisors to not (in each case without the written consent of Parent):
(a) Take any action that would constitute a breach of its representations and warranties;
(b) Take any action that would prevent it from performing or cause it not to perform its covenants or closing conditions hereunder;
(c) Enter into, become bound by, or permit any of the other Acquired Companies not to:assets owned or used by it to become bound by, any material Contract, or amend, modify or terminate, or waive or exercise any material right or remedy or grant, transfer, license or assign any material right or material claims under, any material Contract (including any Intellectual Property Contract);
(id) (A) issueAcquire, selllease or license any right or other asset from any other Person or sell encumber, convey, assign, or otherwise dispose, encumber, pledge, dispose grant or transfer, or lease or license or sublicense to any Person, or amend or modify, any material right or asset of Company or encumber any capital stock owned by it in any of its Subsidiaries; interest therein (Bincluding with respect to Intellectual Property) amend or waive or propose to amend relinquish any material right or waive enter into any provision action that could materially change the value of its certificate Company without the prior consent of incorporation or bylaws; Parent;
(Ce) split, combine or reclassify its outstanding shares of capital stock; (D) declareDeclare, accrue, set aside or pay any dividend payable in cash, stock or property make any other distribution in respect of any shares of capital stock other than dividends from its direct stock, or indirect wholly-owned Subsidiaries; or (E) repurchase, redeem or otherwise acquire, except as may be required by the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, reacquire any shares of its capital stock or any other securities convertible into or exchangeable or exercisable for any shares distribute cash outside of its capital stockthe Ordinary Course of Business;
(iif) Use the proceeds of any bridge loans from its stockholders for any purpose other than for working capital for routine operating purposes (which may include Employee Payments included in the Adjustment Statement);
(g) Sell, issue, grant or authorize the sale, issuance or grant of: (A) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement)security; (B) transferany option, lease (other than leases for equipment entered into in the ordinary course for constructioncall, maintenance and facilities development projects), license, guarantee, sell, mortgage, pledge, dispose of warrant or encumber right to acquire any other property or assets (including capital stock of any of its Subsidiaries) or incur or modify any indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any Personsecurity;
(iii) (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of any Acquired Company except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice, (B) increase the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans to directors, officers or employees of any Acquired Company;
(iv) commence or settle or compromise any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (except with respect to non-material disputes as may arise from time to time in the ordinary course of business of such Acquired Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h), in amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017);
(v) (A) modify, amend, enter into or terminate any material Company Contract other than in the ordinary course of business or waive, release or assign any material rights or claims with respect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearance;
(vi) make any Tax election, settle or compromise any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(vii) 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;
(viii) 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;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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;
(xi) enter into any new business line;
(xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(xiii) authorize, commit or enter into an agreement to do any of the foregoing.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder.
Appears in 1 contract
Interim Operations. (a) From the date Effective Date to the Closing, SMYD will not, without the prior written approval of this Agreement until the Effective Time Geldenhuys: (unless Parent shall ) amend or otherwise approve in writing in change its sole discretionArticles of Incorporation; () issue or sell or authorize for issuance or sale additional shares of any class of capital stock, and except as otherwise expressly contemplated by this Agreementor subscriptions, options (including employee stock options), warrants, rights or convertible securities or other agreements obligating it to issue shares of its capital stock; () declare, set aside, make or pay any dividend or other distribution with respect to its capital stock; () redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock; () issue any instrument that permits participation in the Company shall ensure that revenues or profits of SMYD; (i) the business and operations of the Acquired Companies shall be conducted (A) incur any indebtedness except for accounts payable in the ordinary and usual course and of its business; (B) in compliance with all applicable Laws and permit the requirements sale or encumbrance of all Material Contracts, and (ii) to the extent consistent therewith, each Acquired Company shall use its respective reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.
(b) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall not, and shall cause each any of the other Acquired Companies not assets of SMYD; () enter into any employment or severance agreements or similar agreements with any person; or () agree to, make, engage in or allow to occur or continue any of the following:
(i) (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend or waive or propose to amend or waive any provision of its certificate of incorporation or bylaws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, accrue, 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, except as may be required by the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stockAny material transaction;
(ii) (A) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); (B) transfer, lease (other than leases for equipment entered into in the ordinary course for construction, maintenance and facilities development projects), 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 indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant expenditure except a capital expenditure for cash up to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any PersonUS$5,000;
(iii) Any changes in its condition (A) grant financial or provide any severance or termination payments or benefits to any directorotherwise), officer or employee of any Acquired Company exceptliabilities, in the case of employees who are not officers, in the ordinary course of business consistent with past practice, (B) increase the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus toassets, or make any new equity awards to any directorbusiness that, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans to directors, officers or employees of any Acquired Company;
(iv) commence or settle or compromise any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (except with respect to non-material disputes as may arise from time to time in the ordinary course of business of such Acquired Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h), in amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017);
(v) (A) modify, amend, enter into or terminate any material Company Contract other than in the ordinary course of business or waive, release or assign any material rights or claims with respect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearance;
(vi) make any Tax election, settle or compromise any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(vii) 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;
(viii) 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;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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;
(xi) enter into any new business line;
(xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(xiii) authorize, commit or enter into an agreement to do any of the foregoing.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, when considered individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality material adverse change;
(iv) The destruction of, damage to, or loss of any asset (regardless of whether covered by insurance) as a direct or indirect result of the foregoingaction or inaction of SMYD, that, when considered individually or in the Company shall promptly advise Parent aggregate, has a material adverse change upon the condition (financial or otherwise) or business of SMYD;
(v) Any change in writing of accounting methods or practices (including, without limitation, any change in depreciation or amortization policies or rates);
(ivii) Legal Proceeding Any increase in the salary or material claim threatened, commenced other compensation payable or asserted against or with respect to become payable to any of the Acquired Companiesits officers or directors, (ii) commencement of an involuntary case against any Acquired Company or the filing declaration, payment, or commitment or obligation of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization any kind for the payment of a bonus or other relief in respect additional salary or compensation to any such person;
(viii) The material amendment or termination of such Acquired Company or its debtsany material Contract, agreement, or of license to which it is a substantial part of its assetsparty;
(ix) Any loan to any person or entity, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence the guaranteeing of any default underloan;
(x) Any mortgage, and as defined in, the Bank of America Facility pledge or the KKR Facility or the occurrence other encumbrance of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit asset of SMYD by SMYD or otherwise affect any as a direct or indirect result of the representations, warranties, covenants action or obligations inaction of the Company contained in this Agreement SMYD; or
(xi) The waiver or release of any right or claim of the remedies available to Parent hereunderSMYD by SMYD.
Appears in 1 contract
Interim Operations. (a) From During the period from the date of this Agreement until to the Effective Time Closing (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly provided, contemplated or permitted by the terms of this Agreement), the Company shall ensure that (i) the carry on its business and operations of the Acquired Companies shall be conducted (A) in the usual, regular and ordinary and usual course and (B) in compliance with all applicable Laws and substantially the requirements same manner as conducted at the date of all Material Contractsthis Agreement, and (ii) and, to the extent consistent therewith, each Acquired Company shall use its respective reasonable commercial efforts to preserve intact its current business organization intact organizations, keep available the services of its current officers and maintain employees and preserve its existing relations and goodwill relationships with customers, strategic partners, suppliers, distributorslicensors, creditorsgovernmental entities, lessorslicensees, employees distributors and others having business associates.
(b) From dealings with the date Company with respect to its business, in each case consistent with past practice. Without limiting the generality of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretionforegoing, and except as otherwise expressly contemplated provided or permitted by this Agreement), prior to the Closing, the Company shall not, and shall cause each not permit any of its Subsidiaries to, without the prior written consent of the other Acquired Companies Buyer (which consent shall not to:be unreasonably withheld, conditioned or delayed):
(a) (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, (Aii) 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 or (iii) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof or any rights (including convertible debt), warrants or options to acquire any such shares or other securities;
(b) issue, deliver, grant, sell, pledge, dispose of or otherwise encumber any capital stock owned by it in any of its Subsidiaries; (B) amend or waive or propose to amend or waive any provision of its certificate of incorporation or bylaws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, accrue, 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, except as may be required by the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(ii) (A) issue, sell, pledge, dispose of or encumber any shares ofinto, or securities convertible into any rights, warrants or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind options to acquire, any such capital stock, other than (i) the issuance of shares of its capital stock Common Stock upon the exercise of any class rights (including convertible debt), warrants or any other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement, (ii) options to purchase common stock issuable pursuant to the Company's policy of awarding options to its non-employee directors on the anniversary of their election to the Company's Board, (iii) modifications to or grants of directors' options as needed to prevent the forfeiture thereof upon a resignation of a director as contemplated by this Agreement (which modifications are described in the Company's Disclosure Schedule); or (Biv) transferCommon Stock or rights to purchase Common Stock triggered or issuable pursuant to antidilution provisions in warrants or other rights outstanding on the date of this Agreement;
(c) amend the Company's articles of incorporation or bylaws;
(d) acquire or agree to acquire (i) by merging or consolidating with, lease or by purchasing a substantial portion of the stock, or other ownership interests in, or substantial portion of assets of, or by any other manner, any business or any corporation, partnership, association, joint venture, limited liability company or other entity or division thereof or (other than leases for ii) any assets that would be material, individually or in the aggregate, to the Company, except purchases of supplies, equipment entered into and inventory in the ordinary course for constructionof business consistent with past practice;
(e) sell, maintenance and facilities development projects)lease, licensetransfer, guarantee, sellsublicense, mortgage, pledge, ▇▇▇▇▇ ▇ ▇▇▇▇, mortgage, pledge, security interest, charge, claim or other encumbrance of any kind or nature on or otherwise encumber or dispose of or encumber any other property or assets (including capital stock of any of its Subsidiariesproperties or assets, except in the ordinary course of business consistent with past practice;
(f) or (i) incur or modify any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other Liability in amounts greater than $75,000 individually and $500,000 in rights to acquire any debt securities of the aggregate; (C) make or authorize or commit for Company, guarantee any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 ordebt securities of another person, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership "keep well" or other agreement to maintain any financial statement condition of another person or similar agreement with enter into any Person;
(iii) (A) grant or provide any severance or termination payments or benefits to any director, officer or employee arrangement having the economic effect of any Acquired Company exceptof the foregoing, except for (x) working capital borrowings and increases in the case letters of employees who are not officers, credit under revolving credit facilities incurred in the ordinary course of business consistent with past practice, (By) increase indebtedness incurred to refund, refinance or replace indebtedness for borrowed money outstanding on the compensationdate of this Agreement and (z) indebtedness existing solely between the Company and its wholly-owned Subsidiaries or between such Subsidiaries or (ii) make any loans, bonus advances or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus capital contributions to, or make any new equity awards to any directorinvestments in, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans to directors, officers or employees of any Acquired Companyperson;
(ivg) commence except for capital expenditures in compliance with the amounts and timing included in the Company's written capital expenditure plan previously made available to the Buyer, make or settle or compromise incur any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (capital expenditure, except with respect to non-material disputes as may arise from time to time in the ordinary course of business of such Acquired Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h), in amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017)consistent with past practice;
(vh) (A) modifychange any method of tax accounting, amendmake or change any material election relating to taxes, file any amended tax return, settle or compromise any material tax liability, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of taxes, enter into any closing agreement with respect to taxes, or terminate surrender any right to claim a tax refund;
(i) except to the extent permitted by Section 5.2 of this Agreement, waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which the Company is a party;
(j) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, restructuring, recapitalization or reorganization;
(k) enter into any new collective bargaining agreement;
(l) change any accounting principle used by it, except as required by applicable laws or generally accepted accounting principles;
(m) settle or compromise any material litigation, including any litigation that is brought by any current, former or purported holder of any capital stock or debt securities of the Company Contract or any of its Subsidiaries relating to the transactions contemplated by this Agreement, or, except in the ordinary course of business consistent with past practice or as otherwise required pursuant to contracts existing on or prior to the date of this Agreement or entered into in the ordinary course consistent with past practice after the date of this Agreement, and so long as such settlement would not impose any injunctive or similar order on the Company or restrict in any way the business of the Company, pay, discharge or satisfy any material claims, liabilities or obligations;
(n) except as set forth in the Company Disclosure Schedule, (i) enter into any new, or amend any existing, severance agreement or arrangement, deferred compensation arrangement or employment agreement with any officer, director or employee whose annual base salary exceeds $150,000, (ii) adopt any new incentive, retirement or welfare benefit arrangements, plans or programs for the benefit of current, former or retired employees or amend any existing Company compensation or benefit plan (other than amendments required by law or to maintain the tax qualified status of such plans), (iii) grant any increases in employee compensation, other than in the ordinary course consistent with past practice (which shall include normal individual periodic performance reviews and related compensation and benefit increases and bonus payments consistent with past practices) provided that any such increase shall not include increases in compensation to officers or any employee whose annual base salary exceeds $150,000 or (iv) grant any stock options or stock awards;
(o) cancel any debts or waive any claims or rights of substantial value (including the cancellation, compromise, release or assignment of any indebtedness owed to, or claims held by, the Company), except for cancellations made or waivers granted with respect to claims other than indebtedness in the ordinary course of business consistent with past practice which, in the aggregate, are not material or for claims other than indebtedness which are cancelled or waived in connection with the settlement of the actions referred to in, and to the extent permitted by, clause (m) above;
(p) except as set forth in the Company Disclosure Schedule, (i) enter into any contract, agreement or other arrangement, or series of contracts, agreements or other arrangements, not in the ordinary course of business that would require the Company to expend more than $200,000 individually or $500,000 in the aggregate in any fiscal year, (ii) modify, amend in any material respect, transfer or terminate any material contract of the Company or waive, release or assign any material rights or claims thereto or thereunder, (iii) enter into or extend in any material respect any lease with respect thereto; to the Company's real property, (iv) modify, amend, transfer or terminate in any material respect any Intellectual Property agreements, standstill or confidentiality agreement with any third party, or waive, release or assign any material rights or claims thereto or thereunder or (Bv) (1) modify enter into, modify, amend, transfer or amend the KKR Facility in a manner materially adverse terminate any contract to the Acquired Companies provide exclusive rights or Parent or (2) modify or amend the KKR Forbearanceobligations;
(viq) make any Tax electionexcept as provided in Section 5.2(b), settle or compromise any Tax claim or Liabilityagree, change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(vii) 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;
(viii) 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;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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;
(xi) enter into any new business line;
(xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(xiii) authorize, commit or enter into an agreement to do any of the foregoing.
(c) Nothing contained foregoing or any action or fail to take any action which would result in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely 8 not being satisfied or that would, individually or in the aggregate, would reasonably be expected to have result in a Company Material Adverse Effect. Without limiting the generality of the foregoing; or
(r) authorize any of, or commit or agree to take any of, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunderforegoing actions.
Appears in 1 contract
Sources: Stock Purchase Agreement (Granite City Food & Brewery LTD)
Interim Operations. (a) From Until the date earlier of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall ensure that (i) the business Milestone Closing or (ii) the termination of this Agreement pursuant to Section 6.01, without the prior written consent of Purchaser, Company shall not (and operations shall not permit its Subsidiaries to):
a. amend the Organizational Documents of Company or any of its Subsidiaries in a manner that could reasonably be expected to affect Purchaser in an adverse manner either as Stockholder or with respect to the rights of Purchaser under any of the Acquired Companies shall be conducted (A) Transaction Documents;
b. redeem, repurchase or acquire any capital stock of Company or any of its Subsidiaries, other than repurchases of capital stock from employees, officers or directors of Company or any of its Subsidiaries in the ordinary course of business pursuant to any of Company’s agreements or plans in effect as of the date hereof or its share repurchase program approved by the Board prior to the date hereof;
c. authorize, issue or reclassify any capital stock, or any securities that are convertible into, or exercisable or exchangeable for, or that represent the right to receive capital stock, of Company, other than (i) the authorization and usual course and (B) in compliance with all applicable Laws and issuance of the requirements of all Material Contracts, Shares as contemplated hereunder and (ii) issuances of capital stock, or any securities that are convertible into, or exercisable or exchangeable for, or that represent the right to the extent consistent therewithreceive capital stock, each Acquired of Company shall use its respective reasonable efforts to preserve its business organization intact employees, officers and maintain its existing relations and goodwill with customers, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.
(b) From the date directors of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall not, and shall cause each of the other Acquired Companies not to:
(i) (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend Subsidiaries in the ordinary course of business pursuant to any of Company’s agreements or waive or propose plans in effect as of the date hereof;
d. solely with respect to amend or waive any provision of its certificate of incorporation or bylaws; (C) splitCompany, combine or reclassify its outstanding shares of capital stock; (D) establish a record date for, declare, accrue, set aside for payment or pay any dividend payable in cashon, stock or property make any other distribution in respect of any capital stock other than dividends from its direct or indirect wholly-owned Subsidiaries; or (E) repurchase, redeem or otherwise acquire, except as may be required by the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquireof, any shares of its capital stock or any securities convertible into other equity or exchangeable or exercisable for any shares of its capital stockvoting interests;
(ii) (A) issuee. liquidate, selldissolve, pledgemerge, dispose of consolidate, restructure, recapitalize or encumber reorganize Company or any shares ofInsurance Subsidiary; or
f. authorize, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); (B) transfer, lease (other than leases for equipment entered into in the ordinary course for construction, maintenance and facilities development projects), 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 indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any Person;
(iii) (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of any Acquired Company except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice, (B) increase the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans to directors, officers or employees of any Acquired Company;
(iv) commence or settle or compromise any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (except with respect to non-material disputes as may arise from time to time in the ordinary course of business of such Acquired Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h), in amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017);
(v) (A) modify, amend, enter into or terminate any material Company Contract other than in the ordinary course of business or waive, release or assign any material rights or claims with respect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearance;
(vi) make any Tax election, settle or compromise any Tax claim or Liability, change (or make a request to any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companies, surrender any claim for a refund of a material amount of Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment;
(vii) 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;
(viii) 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;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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;
(xi) enter into any new business line;
(xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(xiii) authorize, commit or enter into an agreement agree to do take, any of the foregoingforegoing actions.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder.
Appears in 1 contract
Interim Operations. (a) From During the period from the date of this Agreement until to the Effective Time (unless Parent shall otherwise approve in writing in its sole discretionlater of the Milestone or Option Closing Date, and except with the Purchasers' prior specific written consent or as otherwise expressly contemplated by this Agreement), BSD, with respect to the BPH Business Assets, and the Company shall ensure that (i) the operate its business and operations of the Acquired Companies shall be conducted (A) only in the ordinary and usual course consistent with past practices and (B) in compliance with all applicable Laws and the requirements of all Material Contracts, and (ii) to the extent consistent therewith, each Acquired Company shall use its respective reasonable efforts to preserve intact its business organization intact and maintain its existing relations and goodwill with customersgood will in all material respects. Additionally, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.
(b) From during the period from the date of this Agreement until to the Effective Time later of the Milestone or Option Closing Date, BSD, with respect to the BPH Business Assets for items (xi), (xiv) and (xv) below and only with respect to those actions which materially affects the BPH Business Assets for all other items below, and the Company, will not to do any of the following (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), Agreement or permitted in writing by the Company shall not, and shall cause each of the other Acquired Companies not to:Purchasers):
(i) amend its Certificate of Incorporation, any Certificate of Designation or By-Laws, as the case may be;
(Aii) issue, sellsell or authorize for issuance or sale, pledge, dispose shares of or encumber any capital stock owned by it in any class of its Subsidiaries; securities (Bincluding, but not limited to, by way of stock split or dividend) amend or waive any subscriptions, options, warrants, rights or propose to amend covertible securities, or waive enter into any provision of its certificate of incorporation agreements or bylaws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, accrue, set aside or pay any dividend payable in cash, stock or property in respect commitments of any capital stock other than dividends from its direct character obligating it to issue or indirect wholly-owned Subsidiaries; or sell any such securities;
(Eiii) repurchaseredeem, redeem purchase or otherwise acquire, except as may be required by the Company Stock Plans, directly or permit any of its Subsidiaries to purchase or otherwise acquireindirectly, any shares of its capital stock or any securities convertible into option, warrant or exchangeable other right to purchase or exercisable for acquire any shares of such shares;
(iv) declare or pay any dividend or other distribution (whether in cash, stock or other property) with respect to its capital stock;
(iiv) (A) issue, voluntarily sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on the date hereof under the Company Stock Plans and other than the sale by a Subsidiary of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); (B) transfer, lease (other than leases for equipment entered into in the ordinary course for constructionsurrender, maintenance and facilities development projects), license, guarantee, sell, mortgage, pledge, abandon or dispose of or encumber any other property or assets (including capital stock of any of its Subsidiaries) assets or incur property rights (tangible or modify any indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures intangible), other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any Person;
(iii) (A) grant or provide any severance or termination payments or benefits to any director, officer or employee of any Acquired Company except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice, practices;
(Bvi) increase the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, pay any bonus to, grant or make any new equity awards mortgage or pledge or subject itself or any of its properties or assets to any directorlien, officer charge or employee encumbrance of any Acquired Companykind, except liens for taxes not currently due;
(Cvii) enter intocreate, adoptincur or assume any liability or indebtedness, extend, amend except in the ordinary course of business consistent with past practices;
(viii) make or renew commit to make any employment, severance, change capital expenditures exceeding in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, the aggregate Ten Thousand Dollars (D$10,000.00);
(ix) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, to the extent not already required by any such Company Benefit Plan, (G) change any actuarial or other assumptions used to calculate funding obligations with respect become subject to any Company Benefit Plan guaranty;
(x) grant any increase (outside the ordinary course of business consistent with past practices) in the compensation payable or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, or (H) forgive any loans become payable to directors, officers or employees of (including, without limitation, any Acquired Companysuch increase pursuant to any bonus, pension, profit-sharing or other plan or commitment);
(ivxi) commence except as listed on Schedule 7.1, enter into any agreement which would be a Material Agreement, or settle amend or compromise terminate any claims or litigation to existing Material Agreement, which an Acquired Company is a party or is threatened to be made a party (except outside the ordinary course of business consistent with past practices. With respect to non-material disputes as may arise from time to time the foregoing, the Company or BSD shall provide the Purchasers with a complete list of any such Material Agreement not entered into in the ordinary course of business of such Acquired Company that involve only between the payment of monetary damages not in excess (A) of $100,000 individually or $250,000 in date hereof and the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h), in amounts not exceeding 25% of the amount accrued or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017)Closing Date;
(vxii) alter the manner of keeping its books, accounts or records, or change in any manner the accounting practices therein reflected;
(Axiii) modify, amendexcept as set forth on Schedule 7.1, enter into any commitment or terminate any material Company Contract transaction other than in the ordinary course of business or waive, release or assign any material rights or claims consistent with respect thereto; or (B) (1) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearancepast practices;
(vixiv) make do any Tax electionact, settle or compromise omit to do any Tax claim act which would cause a violation or Liability, change (or make a request to breach of any Governmental Entity to change) any material aspect of its method of accounting for Tax purposes, file any amended Tax Return, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companiesrepresentations, surrender any claim for a refund of a material amount of Taxes, warranties or consent to any extension or waiver covenants of the limitation period applicable to any material Tax claim Company or assessmentBSD set forth in this Agreement;
(vii) 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;
(viiixv) take any action which has a material adverse effect on the condition (financial or omit to take any action that would cause any otherwise), results of its representations and warranties herein to become untrue in any material respectoperations, assets, liabilities, properties, business or prospects of the Company or BPH Business Assets, or on employee, customer or supplier relations;
(ixxvi) authorize or enter into alter in any ▇▇▇▇▇▇;manner any existing working capital facilities; or
(xxvii) enter into any agreement that limits the ability of any Acquired Companyagree, whether in writing or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) after the Effective Timeotherwise, to compete in or conduct any line of business or compete with any Person in any geographic area or during any period;
(xi) enter into any new business line;
(xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(xiii) authorize, commit or enter into an agreement to do any of the foregoing.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or prior to the date of this Agreement; (iii) any material breach of any covenant or obligation of the Company; and (iv) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder.
Appears in 1 contract
Interim Operations. (a) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by earlier of the Funding Date or the termination of this Agreement), unless the prior written consent of the Investors shall have been obtained, the Company shall ensure covenants and agrees that (i) the business and operations of the Acquired Companies shall be conducted (A) in the ordinary and usual course and (B) in compliance with all applicable Laws and the requirements of all Material Contracts, and (ii) it will not do or agree or commit to the extent consistent therewith, each Acquired Company shall use its respective reasonable efforts to preserve its business organization intact and maintain its existing relations and goodwill with customers, strategic partners, suppliers, distributors, creditors, lessors, employees and business associates.
(b) From the date of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing in its sole discretion, and except as otherwise expressly contemplated by this Agreement), the Company shall not, and shall cause each of the other Acquired Companies not to:
(i) (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend or waive or propose to amend or waive any provision of its certificate of incorporation or bylaws; (C) split, combine or reclassify its outstanding shares of capital stock; (D) declare, accrue, 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, except as may be required by the Company Stock Plansdo, or permit any of its Subsidiaries to purchase do or agree or commit to do, any of the following:
(a) amend the Company’s Certificate of Incorporation or bylaws or the certificate of incorporation or bylaws (or corresponding organizational documents) of any Company Subsidiaries,
(b) incur or guarantee any additional Indebtedness except for (i) intercompany Indebtedness, (ii) borrowings under the Company’s credit facilities as in effect on the date of this Agreement and overnight borrowing in the ordinary course of business consistent with past practice.
(c) repurchase, redeem, or otherwise acquireacquire or exchange, directly or indirectly, any shares of its capital stock shares, or any securities convertible into any shares, of the capital stock of the company or exchangeable or exercisable for any shares of its Subsidiaries, or make any other distribution in respect of the Company’s capital stock, except for repurchases made in connection with any Benefit Plan or cash dividends on Common Stock not to exceed $0.01 per share for each fiscal quarter;
(iid) (A) except for this Agreement, or pursuant to the exercise of stock options outstanding as of the date hereof and pursuant to and in accordance with the Benefit Plans as in existence on the date hereof, issue, sell, pledge, dispose of encumber, authorize the issuance of, enter into any contract to issue, sell, pledge, encumber, or encumber any shares authorize the issuance of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind otherwise permit to acquirebecome outstanding, any additional shares of its Common Stock or any other capital stock of any class the Company or any Subsidiaries, or any stock appreciation rights, or any option, warrant, or other property or assets (other than Shares issuable pursuant to options and other stock-based awards outstanding on right in respect of the date hereof under the Company Stock Plans and other than the sale by a Subsidiary capital stock of the Company of assets pursuant to a Contract executed prior to the date of this Agreement); (B) transfer, lease (other than leases for equipment entered into in the ordinary course for construction, maintenance and facilities development projects), 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 indebtedness or other Liability in amounts greater than $75,000 individually and $500,000 in the aggregate; (C) make or authorize or commit for any capital expenditures other than pursuant to the capital appropriations/spending budgets set forth in the Company Disclosure Schedule after deducting amounts previously authorized or committed by the Company with respect to calendar year 2018 or, by any means, make any acquisition of, or investment in, assets or stock of or other interest in, any other Person or entity; or (D) enter into any joint venture agreement, partnership agreement or similar agreement with any Person;
(iiie) (A) grant adjust, split, combine or provide reclassify any severance capital stock of the Company or termination payments any of its Subsidiaries or benefits to any director, officer issue or employee authorize the issuance of any Acquired other securities in respect of or in substitution for shares of Common Stock or any other capital stock of the Company exceptor any of its Subsidiaries, or sell, lease, mortgage, permit any Lien (other than, in the case of employees who the following subclause (ii), Permitted Liens that are not officersmaterial individually or in the aggregate), or otherwise dispose of or otherwise encumber (i) any shares of capital stock of any Company Subsidiaries or (ii) any material asset other than in the ordinary course of business consistent with past practice;
(f) purchase any securities or make any material investment, either by purchase of stock or securities, contributions to capital, asset transfers, or purchase of any assets, in any Person other than a Company Subsidiary, or otherwise acquire direct or indirect control over any Person, other than in the ordinary course of business consistent with past practice;
(g) (i) other than as required by the agreements executed in connection with this Agreement and identified on the Disclosure Schedule, grant any increase in compensation or benefits to the employees or officers of the Company or any of its Subsidiaries, except for merit-based salary increases for employees other than officers in the ordinary course in accordance with past practice; (ii) pay any (x) severance or termination pay or (y) any bonus, in either case other than as required by written severance policies or written contracts in effect on the date of this Agreement or in the ordinary course of business consistent with past practice; (iii) enter into or amend any severance agreements with employees or officers of the Company or any of its Subsidiaries; (iv) grant any increase in fees or other increases in compensation or other benefits to directors of the Company or any of its Subsidiaries except in the ordinary course of business consistent with past practice; or (v) waive any stock repurchase rights, accelerate, amend or change the period of exercisability of any stock options or other equity rights or restricted stock, or reprice any stock options or other equity rights granted under a Benefit Plan or authorize cash payments in exchange for any stock options or other equity rights;
(h) enter into or amend any employment contract between the Company or any of its Subsidiaries and any Person that the Company or such Subsidiary does not have the unconditional right to terminate without liability (other than liability for services already rendered);
(i) adopt any new Benefit Plan or terminate or withdraw from, or make any change in or to, any Benefit Plans other than any such change that is required by law or that, in the opinion of counsel, is necessary or advisable to maintain the tax qualified status of any such plan, or make any distributions from such Benefit Plans, except as required by law, the terms of such Benefit Plans as in effect on the date hereof or in the ordinary course of business consistent with past practice;
(j) make any significant change in any accounting methods or systems of internal accounting controls, except as required by GAAP;
(k) make, change or revoke any material Tax election, (ii) change any of its methods of accounting for Tax purposes, (iii) settle or compromise any material Tax liability or any Tax disputes, claims, audits, examinations, or other proceedings, (iv) file any material amended Tax return or (v) enter into a “closing agreement” described in Section 7121 of the Code (or any corresponding or comparable provision of state, local or foreign Law);
(l) commence any litigation other than in the ordinary course of business consistent with past practice, or settle any litigation (Bi) increase the compensation, bonus or pension, welfare, profit-sharing, severance or other benefits of, pay involving any bonus to, or make any new equity awards to any director, officer or employee of any Acquired Company, (C) enter into, adopt, extend, amend or renew any employment, severance, change in control, termination, deferred compensation or other similar agreement with any director, officer or employee of any Acquired Company, (D) establish, adopt, amend, suspend, terminate or exercise any discretion under any Company Benefit Plan or amend the terms of or exercise any discretion under any Company Awards, (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (F) take any action to accelerate the vesting or payment of any compensation or benefits under any Company Benefit Plan, liability to the extent not already required by Company or any such of its Subsidiaries for money damages in excess of $500,000 or materially restricting or otherwise affecting the business or operations of the Company Benefit Plan, (G) change or any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP, of its Subsidiaries or (Hii) forgive any loans relating to directors, officers or employees of any Acquired Companythe transactions contemplated hereby;
(ivm) commence or settle or compromise any claims or litigation to which an Acquired Company is a party or is threatened to be made a party (except with respect to non-material disputes as may arise from time to time in the ordinary course of business of such Acquired consistent with past practice, enter into, modify, amend or terminate any Company that involve only the payment of monetary damages not in excess (A) of $100,000 individually Significant Agreement or $250,000 in the aggregate and (B) in the case of such disputes disclosed on Section 6.1(h)waive, in amounts not exceeding 25% of the amount accrued release, compromise or reserved against in the unaudited consolidated balance sheet of the Acquired Companies as of September 30, 2017)assign any material rights or claims;
(vn) (A) modify, amend, enter into any new line of business or terminate change in any material respect its lending, investment, risk and asset-liability management, interest rate or fee pricing with respect to depository accounts, hedging and other material banking or operating policies except as required by law or by rules or policies imposed by a Governmental Entity;
(o) make or commit to make any capital expenditure, except (i) capital expenditures of the Company Contract other than and its Subsidiaries in the ordinary course of business or waive, release or assign any material rights or claims with respect theretoon information technology used in the ordinary course of business not exceeding $5,000,000; or and (Bii) capital expenditures of the Company and its Subsidiaries in the ordinary course of business (1other than capital expenditures described in the foregoing clause (i)) modify or amend the KKR Facility in a manner materially adverse to the Acquired Companies or Parent or (2) modify or amend the KKR Forbearancenot exceeding $3,000,000;
(vip) except as required by law or applicable regulatory authorities, make any Tax electionmaterial changes in its credit administration policies or loan rating system, settle or compromise any Tax claim or Liability, change (or otherwise make a request to any Governmental Entity to change) any material aspect of changes to its method of accounting for Tax purposespolicies and practices with respect to underwriting, file any amended Tax Returnpricing, prepare any Tax Return in a manner inconsistent with the past practice of the Acquired Companiesoriginating, surrender any claim for a refund of a material amount of Taxesacquiring, selling, servicing, or consent buying or selling rights to any extension or waiver of the limitation period applicable to any material Tax claim or assessmentservice, loans;
(viiq) permit purchase or lease any insurance policy naming it as a beneficiary real property in respect of any branch or loss-payable payee other facility, or, without previously notifying and consulting with Investors, make any application to be cancelled open, relocate or terminated close, or open, relocate or close any branch or other facility;
(r) sell, transfer or otherwise dispose of any property or assets that are, individually or in the aggregate, material, except for the sale of, in each case in the ordinary and usual course of business, (i) Small Business Administration Loans, (ii) OREO and (iii) loans through the Mortgage Purchasing Department of the Bank;
(viiis) take any action without previously notifying and consulting with Investors, except for Loans or omit to take any action commitments for Loans that would cause any of its representations and warranties herein to become untrue in any material respect;
(ix) authorize or enter into any ▇▇▇▇▇▇;
(x) enter into any agreement that limits the ability of any Acquired Company, or would limit the ability of Parent or any Subsidiary of Parent (including any Acquired Company) 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;
(xi) enter into any new business line;
(xii) (A) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of such Acquired Company; (B) consent to or support the commencement of an involuntary case against such Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect; or (C) fail to contest or controvert any involuntary proceeding or petition described in this Section 7.1(b)(xii) within ten days following the commencement of such involuntary proceeding against such Acquired Company; and
(xiii) authorize, commit or enter into an agreement to do any of the foregoing.
(c) Nothing contained in this Agreement shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the operations of the Acquired Companies prior to the Closing Date. Prior to the Closing Date, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of their operations.
(d) Prior to the Effective Time, the Company shall promptly notify Parent in writing of: (i) the occurrence or non-occurrence of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement and that caused or constitutes a material inaccuracy in any representation or warranty made have previously been approved by the Company in this Agreement; (ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement and that would cause or constitute a material inaccuracy in any representation or warranty made by the Company in this Agreement if: (A) such representation or warranty had been made as of the time of the occurrence, existence or discovery of such event, condition, fact or circumstance; or (B) such event, condition, fact or circumstance had occurred, arisen or existed on or Bank prior to the date of this Agreement; , make or acquire any Loan or issue a commitment (iiior renew or extend an existing commitment) for any Loan relationship aggregating in excess of $1,000,000, or amend or modify in any material breach respect any existing Loan relationship, that would result in total credit exposure to the applicable borrower (and its affiliates) in excess of $1,000,000;
(t) fail to comply with Regulatory Agreements or the C&D Order; or
(u) agree to take, make any covenant commitment to take, or obligation adopt any resolutions of the Company; and (iv) any event’s Board of Directors in support of, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Article VIII impossible or unlikely or that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall promptly advise Parent in writing of any (i) Legal Proceeding or material claim threatened, commenced or asserted against or with respect to any of the Acquired Companies, (ii) commencement of an involuntary case against any Acquired Company or the filing of an involuntary petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of such Acquired Company or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, administrative, receivership or similar law now or hereafter in effect or (iii) occurrence of any default under, and as defined in, the Bank of America Facility or the KKR Facility or the occurrence of any Specified Default Event. No notification given to Parent pursuant to actions prohibited by this Section 7.1(d) shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement or any of the remedies available to Parent hereunder3.1.
Appears in 1 contract
Sources: Funding Agreement (SWS Group Inc)