Operations Prior to the Closing Date. (a) Except as otherwise provided in this Section 5.04, between the date hereof and the Closing, Seller shall cause the Company to operate and carry on its business in all material respects in the Ordinary Course consistent with past practices and as presently operated except as business may be impacted by this Agreement. Between the date hereof and the Closing, Seller shall cause the Company to use commercially reasonable efforts to (i) keep and maintain its assets and properties in substantially the same operating condition and repair (normal wear and tear excepted) as currently maintained, (ii) maintain its business organization intact and maintain its relationships with the suppliers, contractors, employees, customers and others having business relations with the Company, (iii) continue all existing policies of insurance in full force and effect and at least at such levels as are in effect on the date hereof, or to replace any such policies with equivalent replacements, and (iv) duly comply with all applicable Laws. (b) Notwithstanding anything to the contrary contained in Section 5.04(a), except as expressly contemplated by this Agreement or except with the express prior written approval of Purchaser, which approval shall not be unreasonably withheld, conditioned or delayed (and which approval will act to prevent any action so approved from being deemed a breach of any representation, warranty or covenant of Seller set forth in this Agreement), Seller shall not permit or cause Company to: (i) agree to any increase in the compensation payable, or to become payable after the Closing (including any payment based upon the transaction or termination following the transaction), to any of its officers, directors or employees or enter into or modify any contract or other agreement requiring any of them to make a payment to any officer or director other than as required by applicable Law, applicable Contract (to the extent in effect as of the date hereof) or paid in the Ordinary Course of Business; (ii) make any amendment or termination of any Material Contract, or cancel, modify or waive any debts owed to or claims held by it (including the settlement of any claims or litigation), or waive any substantial right, in each case, other than in the Ordinary Course of Business; (iii) sell, transfer, distribute, lease, abandon or otherwise dispose of or mortgage, pledge or impose or suffer to be imposed any Encumbrance on, any of its material assets (other than Intellectual Property which is addressed in clause (iv) below), properties or businesses, except for sales of inventory in the Ordinary Course of Business and except for Permitted Encumbrances; (iv) sell, assign, license or transfer any Intellectual Property, other than grants of licenses of Intellectual Property on arm’s length terms in the Ordinary Course of Business; (v) extend credit other than in the Ordinary Course of Business; (vi) enter into any agreement (other than purchase or sale orders in the Ordinary Course of Business) that is not cancelable without liability or cost on not more than 90 days notice and involving the annual payment of more than $250,000 to which it is a party or by which it or its assets, properties or businesses are bound or subject, in each case, other than in the Ordinary Course of Business; (vii) adopt a plan of liquidation or resolutions providing for liquidation, dissolution, merger, consolidation or other reorganization; (viii) amend its articles of incorporation, charter, bylaws or equivalent documents; (ix) revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of inventory or other assets or any write-off of notes or accounts receivable, except as required by GAAP or in the Ordinary Course of Business; (x) enter into any contract for capital expenditures in excess of $100,000 individually or $2,000,000 in the aggregate; (xi) cancel any existing policies or binders of insurance except in connection with the renewal or replacement of such policies or binders; (xii) make any acquisition of all or any part of the capital stock or business of any other Person, other than the acquisition of assets in the Ordinary Course of Business; or (xiii) make any change in any method of accounting or accounting practice or policy other than those required by GAAP; (xiv) other than as specifically contemplated by this Agreement, agree or commit to do, authorize or approve any action to do, any of the foregoing; provided that, notwithstanding the foregoing, nothing set forth in Section 5.04(a) or (b) shall prohibit or prevent the Company from (i) declaring, setting aside, or paying any cash dividend, (ii) making any distribution of Cash (subject to Section 5.04(c) below), (iii) redeeming or purchasing, or otherwise acquiring, any of its capital stock or other equity interests for Cash (subject to Section 5.04(c) below), (iv) repaying any of its Indebtedness, or (v) engaging in any transaction referred to in Section 5.04 of the Seller Disclosure Schedule. (c) Seller shall cause the Company to have as of the Closing an amount of cash on hand not less than $2,000,000. (d) Seller shall pay, or cause the Company to pay, prior to, or in connection with the Closing, all monies payable under the NMCI Incentive Plan and the Management Incentive Compensation Plan. (e) Seller shall pay or otherwise cause to be extinguished, prior to or in connection with the Closing, the Miscellaneous Receivable. (f) Seller shall cause all Affiliate Transactions to terminate as of the Closing Date, other than the Seller Guarantees and those employment and equity arrangements with officers of the Company listed on Sections 3.13 or 3.18 of the Seller Disclosure Schedule. (g) Seller shall pay or cause to be paid, prior to or in connection with the Closing, into an escrow account the applicable amounts due under the retention agreements listed on item 23 of Section 3.13(a) of the Seller Disclosure Schedule which amounts shall be paid in accordance with the applicable terms of such retention agreements.
Appears in 1 contract
Operations Prior to the Closing Date. (a) Except Subject to Section 6.1(b) hereof or except as otherwise provided in expressly contemplated by this Section 5.04Agreement, between from the date hereof and through the ClosingClosing Date, Seller shall cause the Company to and its Subsidiaries shall operate and carry on its business their businesses in all material respects only in the Ordinary Course ordinary course of business and in a manner consistent with its past practices in all material respects. In furtherance and as presently operated except as business may be impacted by this Agreement. Between not in limitation of the date hereof and the Closingforegoing, Seller shall cause the Company to shall use commercially reasonable efforts consistent with sound business practices to (i) keep and maintain its the assets and properties of the Company and its Subsidiaries in substantially the same normal operating condition and repair (normal wear and tear excepted) as currently maintainedrepair, (ii) maintain its the business organization of the Company and its Subsidiaries, as a whole, intact and maintain its relationships with (iii) preserve the goodwill of the suppliers, contractors, employees, customers and others having business relations with the Company, (iii) continue all existing policies of insurance in full force Company and effect and at least at such levels as are in effect on the date hereof, or to replace any such policies with equivalent replacements, and (iv) duly comply with all applicable Lawsits Subsidiaries.
(b) Notwithstanding anything to the contrary contained in Section 5.04(a), except Except as expressly contemplated by this Agreement or except with as set forth in Schedule 6.1, neither the Company nor any Subsidiary shall without the express prior written approval of Purchaser, which approval shall not be unreasonably withheld, conditioned or delayed (and which approval will act to prevent any action so approved from being deemed a breach of any representation, warranty or covenant of Seller set forth in this Agreement), Seller shall not permit or cause Company toInvestor:
(i) agree to any increase in the compensation payable, amend its articles of incorporation or to become payable after the Closing (including any payment based upon the transaction or termination following the transaction), to any of its officers, directors or employees or enter into or modify any contract bylaws or other agreement requiring any of them to make a payment to any officer or director organizational documents (other than as required an amendment to its bylaws to permit shareholder action by applicable Law, applicable Contract (to the extent in effect as of the date hereof) or paid in the Ordinary Course of Businesspartial written consent);
(ii) make issue, transfer, sell or deliver any amendment shares of its capital stock (or termination options, rights, warrants or other securities convertible into or exchangeable or exercisable for, with or without additional consideration, such capital stock) or any other interest therein, except (A) in connection with the exercise of Company Options granted prior to the date hereof pursuant to the Company Option Plan or (B) in connection with the issuance of any Material Contract, Company Options surrendered or cancel, modify or waive any debts owed Shares repurchased after the date hereof and prior to or claims held the Closing as determined by it the Board (including the settlement of any claims or litigation), or waive any substantial right, provided that no such issuances shall result in each case, other than an increase in the Ordinary Course of Businessaggregate consideration payable pursuant to Article II);
(iii) sellsplit, transfer, distribute, lease, abandon combine or otherwise dispose of or mortgage, pledge or impose or suffer to be imposed reclassify any Encumbrance on, any shares of its material assets capital stock or declare, set aside or pay any dividends or make any other distributions (whether in cash, stock or other than Intellectual Property which is addressed property) in clause (iv) below), properties or businessesrespect of such shares, except for sales of inventory in dividends and distributions payable by a Subsidiary to another wholly owned Subsidiary or to the Ordinary Course of Business and except for Permitted EncumbrancesCompany;
(iv) sellredeem, assignpurchase or otherwise acquire for any consideration any outstanding shares of its capital stock, license rights, warrants or transfer any Intellectual Propertysecurities carrying the right to acquire or which are convertible into or exchangeable or exercisable for, other than grants with or without additional consideration, such capital stock, except as contemplated by this Agreement and the redemption or repurchase of licenses shares of Intellectual Property on arm’s length terms Class C Stock from employees in connection with the Ordinary Course termination of Businesssuch employee's employment in a manner consistent with the Company's past practices;
(v) extend credit other than in the Ordinary Course of Business;
(vi) enter into incur any agreement (other than purchase or sale orders in the Ordinary Course of Business) that is not cancelable without liability or cost on not more than 90 days notice and involving the annual payment of more than $250,000 to which it is a party or by which it or its assetsindebtedness, properties or businesses are bound or subject, in each case, other than in the Ordinary Course of Business;
(vii) adopt a plan of liquidation or resolutions providing for liquidation, dissolution, merger, consolidation or other reorganization;
(viii) amend its articles of incorporation, charter, bylaws or equivalent documents;
(ix) revalue any portion of its assets, properties or businesses including, without limitation, in form of any write-down of the value of inventory or other assets guarantee or any write-off of notes direct or accounts receivableindirect credit support, except as required by GAAP or (A) borrowings in the Ordinary Course ordinary course of Business;
business under the Senior Credit Agreement or the New Bank Facility in a manner consistent with the Company's past practices, (xB) enter into any contract for capital expenditures sales under the Receivables Purchase Agreement in the ordinary course of business and consistent with the Company's past practices, it being understood that (i) on the date of this Agreement, the Company has outstanding $20.0 million of receivables that have been sold pursuant to the Receivables Purchase Agreement and (ii) the Company will sell receivables under the Receivables Purchase Agreement in connection with consummating the transactions contemplated hereby in an amount sufficient to provide the Company with up to $20.0 million of proceeds, (C) trade payables in the ordinary course of business and consistent with the Company's past practices and (D) other indebtedness not in excess of $100,000 individually or $2,000,000 1,000,000 in the aggregate;
(vi) make any acquisition or disposition of stock or other securities or assets of any Person except acquisitions or dispositions of inventory and equipment in the ordinary course of business in a manner consistent with the Company's past practices;
(vii) incur capital expenditures materially in excess of those contemplated by the capital expenditures referenced in Schedule 6.1;
(viii) merge or consolidate with any corporation or other entity or transfer all or substantially all of the Company's assets to another Person;
(ix) enter into any employment or similar contract with, or materially increase the compensation payable to, any officer or employee except in the ordinary course of business in a manner consistent with the Company's past practices;
(x) alter in any material respect its practices and policies relating to the payment and collection of accounts payable and accounts receivable;
(xi) cancel adopt, amend in any existing policies material respect or binders terminate any Plan, severance plan or collective bargaining agreement or make awards or distributions under any Plan, except awards or distributions to any participant or employee in the ordinary course of insurance except business in connection a manner consistent with the renewal or replacement of such policies or bindersCompany's past practices and amendments required to be made in order to comply with changes in applicable Laws;
(xii) make create, assume or suffer to be incurred any acquisition of all or any part of the capital stock or business Encumbrance of any other Person, kind on any of its properties or assets other than the acquisition of assets in the Ordinary Course of Business; orPermitted Encumbrances;
(xiii) amend, supplement or modify any agreement material to the Company and its Subsidiaries taken as a whole, except in the ordinary course of business in a manner consistent with the Company's past practices;
(xiv) make any change in any method accounting principles materially and adversely affecting the reported consolidated assets, liabilities or results of accounting or accounting practice or policy other than those required by GAAP;operations of the Company; or
(xivxv) other than as specifically contemplated by this Agreement, agree or commit to do, authorize or approve any action to do, do any of the foregoing; provided that, notwithstanding the foregoing, nothing set forth in Section 5.04(a) or (b) shall prohibit or prevent the Company from (i) declaring, setting aside, or paying any cash dividend, (ii) making any distribution of Cash (subject to Section 5.04(c) below), (iii) redeeming or purchasing, or otherwise acquiring, any of its capital stock or other equity interests for Cash (subject to Section 5.04(c) below), (iv) repaying any of its Indebtedness, or (v) engaging in any transaction referred to in Section 5.04 of the Seller Disclosure Schedule.
(c) Seller shall cause the Company to have as of the Closing an amount of cash on hand not less than $2,000,000.
(d) Seller shall pay, or cause the Company to pay, prior to, or in connection with the Closing, all monies payable under the NMCI Incentive Plan and the Management Incentive Compensation Plan.
(e) Seller shall pay or otherwise cause to be extinguished, prior to or in connection with the Closing, the Miscellaneous Receivable.
(f) Seller shall cause all Affiliate Transactions to terminate as of the Closing Date, other than the Seller Guarantees and those employment and equity arrangements with officers of the Company listed on Sections 3.13 or 3.18 of the Seller Disclosure Schedule.
(g) Seller shall pay or cause to be paid, prior to or in connection with the Closing, into an escrow account the applicable amounts due under the retention agreements listed on item 23 of Section 3.13(a) of the Seller Disclosure Schedule which amounts shall be paid in accordance with the applicable terms of such retention agreements.
Appears in 1 contract
Sources: Recapitalization and Stock Purchase Agreement (Werner Holding Co Inc /De/)
Operations Prior to the Closing Date. (a) Except Seller shall operate and shall cause each Company to carry on the Business only in the ordinary course and substantially as otherwise provided in this Section 5.04, between presently operated. Consistent with the date hereof and the Closingforegoing, Seller shall cause the each Company to operate and carry on its business in all material respects in the Ordinary Course consistent with past practices and as presently operated except as business may be impacted by this Agreement. Between the date hereof and the Closing, Seller shall cause the Company to use commercially reasonable efforts to (i) keep and maintain its the assets and properties of each Company in substantially the same good operating condition and repair (normal wear and tear excepted) as currently maintained, (ii) shall use their reasonable best efforts consistent with good business practice to maintain its the business organization of each Company intact and maintain its relationships with to preserve the goodwill of the regulators, customers, suppliers, contractors, licensors, employees, customers and others having business relations with the each Company. In connection therewith, (iii) continue all existing policies of insurance in full force and effect and at least at such levels as are in effect on the date hereof, or to replace any such policies with equivalent replacementsSeller shall not, and (iv) duly comply shall not permit its Affiliates to attempt to persuade any employee of or person providing services to any Company to terminate his or her relationship with all applicable Lawsthat Company or not to continue employment after the Closing with such Company or with Buyer.
(b) Notwithstanding anything to the contrary contained in Section 5.04(a7.4(a), except as expressly contemplated by this Agreement or except with the express prior written approval of Purchaser, which approval shall not be unreasonably withheld, conditioned or delayed (and which approval will act to prevent any action so approved from being deemed a breach of any representation, warranty or covenant of Seller set forth in this Agreement)Buyer, Seller shall not, and shall not permit or cause any Company to:
(i) agree to any increase in the compensation payable, amend its articles of incorporation or to become payable after the Closing (including any payment based upon the transaction or termination following the transaction), to any of its officers, directors or employees or enter into or modify any contract or other agreement requiring any of them to make a payment to any officer or director other than as required by applicable Law, applicable Contract (to the extent in effect as of the date hereof) or paid in the Ordinary Course of Businessby-laws;
(ii) issue, grant, sell or encumber any shares of its capital stock or other securities; issue, grant, sell or encumber any security, option, warrant, put, call, subscription or other right of any kind, fixed or contingent, that directly or indirectly calls for the acquisition, issuance, sale, pledge or other disposition of any shares of its capital stock or other securities, redeem or otherwise acquire any shares of its capital stock or other securities, or make any amendment or termination other changes in the equity capital structure of any Material Contract, or cancel, modify or waive any debts owed to or claims held by it (including the settlement of any claims or litigation), or waive any substantial right, in each case, other than in the Ordinary Course of BusinessCompany;
(iii) make any material change in the Business or the operations of any Company or acquire (including by merger or consolidation) any business or Entity or otherwise acquire any assets (other than inventory) that are material;
(iv) make any capital expenditure or enter into any contract or commitment therefor, other than capital expenditures or contracts, agreements or understandings for capital expenditures referred to in the applicable budget contained in Schedule 5.24;
(v) except as contemplated by Schedule 5.24, enter into any Contract, agreement, undertaking or commitment which would have been required to be set forth in Schedule 5.16 if in effect on the date hereof or amend or terminate any Company Agreement;
(vi) enter into any Contract for the purchase or lease of real property or any sublease or option to extend a lease listed in Schedule 5.9(B)(1) or amend or prematurely terminate, or waive any material right or remedy under, any Contract for the purchase or lease of real property or any sublease or option to extend a lease listed in Schedule 5.9(B)(1);
(vii) terminate or fail to renew any Contracts for insurance without obtaining comparable replacement coverage;
(viii) sell, transferlease (as lessor), distributelicense, lease, abandon transfer or otherwise dispose of (including any transfers from any Company to Seller or mortgageany Affiliates), pledge or mortgage or pledge, or impose or suffer to be imposed any Encumbrance on, any of its material the Shares or the assets (or properties of any Company, other than Intellectual Property which is addressed in clause (iv) below), properties inventory and minor amounts of personal property sold or businesses, except otherwise disposed of for sales of inventory fair value in the Ordinary Course ordinary course of Business consistent with past practice and except for other than Permitted Encumbrances;
(ivix) sell, assign, license cancel any debts owed to or transfer claims held by any Intellectual Property, other than grants Company (including the settlement of licenses of Intellectual Property on arm’s length terms in the Ordinary Course of Business;
(vany claims or litigation) extend credit other than in the Ordinary Course of Business;
(vi) enter into any agreement (other than purchase or sale orders in the Ordinary Course of Business) that is not cancelable without liability or cost on not more than 90 days notice and involving the annual payment of more than $250,000 to which it is a party or by which it or its assets, properties or businesses are bound or subject, in each case, other than in the Ordinary Course of Business;
(vii) adopt a plan of liquidation or resolutions providing for liquidation, dissolution, merger, consolidation or other reorganization;
(viii) amend its articles of incorporation, charter, bylaws or equivalent documents;
(ix) revalue any portion of its assets, properties or businesses including, without limitation, any write-down ordinary course of the value of inventory Business consistent with past practice or other assets or any write-off of notes or accounts receivable, except as required by GAAP or listed in the Ordinary Course of BusinessSchedule 7.4(B);
(x) enter into create, incur or assume, or agree to create, incur or assume, any contract for capital expenditures in excess of $100,000 individually or $2,000,000 in the aggregateIndebtedness;
(xi) cancel accelerate or delay collection of any existing policies notes or binders accounts receivable in advance of insurance except or beyond their regular due dates or the dates when the same would have been collected in connection the ordinary course of the Business consistent with the renewal or replacement of such policies or binderspast practice;
(xii) make delay or accelerate payment of any acquisition account payable or other Liability of all any Company beyond or any part in advance of its due date or the date when such Liability would have been paid in the ordinary course of the capital stock or business of any other Person, other than the acquisition of assets in the Ordinary Course of Business; orBusiness consistent with past practice;
(xiii) make, or agree to make, any payment of cash or distribution of assets to, or pay, loan or advance any amount to, Seller or any Affiliates (other than cash realized upon collection of receivables generated in the ordinary course of the Business or as listed on Schedule 5.27(A));
(xiv) make any change in compensation with respect to employees of Business (including changes under any method of accounting or accounting practice or policy Employee Plan), other than those required by GAAPchanges to base salary for employees who are not officers made in accordance with normal compensation practices and consistent with past compensation practices;
(xivxv) grant or provide any rights to severance or termination pay or other than termination benefit, or enter into any employment or severance agreement;
(xvi) establish, adopt, enter into, terminate or materially amend any collective bargaining agreement, Employee Plan or arrangement that would be an Employee Plan if in effect as specifically contemplated by of the date of this Agreement, agree Agreement or commit to do, authorize or approve take any action to doamend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Employee Plan;
(xvii) communicate with any employee, independent contractor, consultant or agent regarding any compensation or benefits to be provided by Buyer or any of its Affiliates after the Closing without the prior consent of Buyer;
(xviii) prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods (including positions, elections or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions to periods ending on or before the Closing Date), settle or otherwise compromise any claim relating to Taxes, enter into any closing agreement or similar agreement relating to Taxes, otherwise settle any dispute relating to Taxes, or request any ruling or similar guidance with respect to Taxes;
(xix) make any change in the accounting policies applied in the preparation of the financial statements contained in Schedule 5.3;
(xx) make any material change in internal control over financial reporting; or
(xxi) agree to do any of the foregoing; provided that, notwithstanding the foregoing, nothing set forth in Section 5.04(a) or (b) shall prohibit or prevent the Company from (i) declaring, setting aside, or paying any cash dividend, (ii) making any distribution of Cash (subject to Section 5.04(c) below), (iii) redeeming or purchasing, or otherwise acquiring, any of its capital stock or other equity interests for Cash (subject to Section 5.04(c) below), (iv) repaying any of its Indebtedness, or (v) engaging in any transaction referred to in Section 5.04 of the Seller Disclosure Schedule.
(c) Seller shall cause the Company to have as of the Closing an amount of cash on hand not less than $2,000,000.
(d) Seller shall pay, or cause the Company to pay, prior to, or in connection with the Closing, all monies payable under the NMCI Incentive Plan and the Management Incentive Compensation Plan.
(e) Seller shall pay or otherwise cause to be extinguished, prior to or in connection with the Closing, the Miscellaneous Receivable.
(f) Seller shall cause all Affiliate Transactions to terminate as of the Closing Date, other than the Seller Guarantees and those employment and equity arrangements with officers of the Company listed on Sections 3.13 or 3.18 of the Seller Disclosure Schedule.
(g) Seller shall pay or cause to be paid, prior to or in connection with the Closing, into an escrow account the applicable amounts due under the retention agreements listed on item 23 of Section 3.13(a) of the Seller Disclosure Schedule which amounts shall be paid in accordance with the applicable terms of such retention agreements.
Appears in 1 contract
Sources: Stock Purchase Agreement