RIGHTS OF THE CORPORATION AND COVENANTS Section 5.1 Optional Purchases by the Corporation. 32 Section 5.2 General Covenants. 33 Section 5.3 Warrant Agent’s Remuneration and Expenses. 34 Section 5.4 Performance of Covenants by Warrant Agent. 34 Section 5.5 Enforceability of Warrants. 34
Covenants of the Shareholders Each Shareholder hereby covenants and agrees that:
Covenants of the Corporation So long as the principal amount of the Note remains outstanding, without the consent of TIG: (i) The Corporation will not alter, amend or modify in any respect the rights, preferences or privileges of the Note. (ii) The Corporation will not incur any indebtedness for consideration other than cash or incur in excess of an aggregate of $5,000,000 of additional indebtedness outstanding at any time beyond indebtedness shown or reflected on the Corporation's balance sheet at June 30, 1998 and the principal amount of the Note. (For the purposes hereof, "indebtedness" shall not include accounts payable to trade creditors created or assumed in the ordinary course of business in connection with obtaining materials or services or amounts owed to employees of the Corporation in the ordinary course of business.) (iii) Except as set forth in the Corporation's Annual Report on Form 10-K for the fiscal year ended June 30, 1998 and the Notice of Meeting and Proxy Statement relating to the 1998 Annual Meeting of Stockholders, the Corporation is not currently engaged in and shall not enter into any transaction with a related party, whether or not reportable pursuant to Regulation S-K promulgated by the Securities and Exchange Commission; provided that, TIG shall not unreasonably withhold or delay its consent to any such transaction. (iv) The Corporation shall not sell, transfer or otherwise dispose of intellectual property of the Corporation for consideration received in excess of $500,000, singly or in the aggregate; provided that, TIG shall not unreasonably withhold or delay its consent to any such disposition. (For the purposes hereof, "intellectual property" means rights in any patent, copyright, trademark, trade dress and trade name, including any such rights related to applications in the online, interactive or multimedia environments.) (v) The Corporation shall not sell, transfer or otherwise dispose of any assets of the Corporation, other than in the ordinary course of business, if such disposition, together with any and all other such dispositions after the Closing, constitute more than $2,000,000 of the Corporation's assets (i) as shown or reflected in the Corporation's most recent balance sheet, or (ii) valued at fair market value at the time of disposition, whichever is greater. (vi) The Corporation will not issue options to purchase stock of the Corporation or restricted stock to directors, officers, or employees of the Corporation in consideration of services rendered, except for grants or awards pursuant to the 1994 Stock Option Plan as proposed to be amended at the 1998 Annual Meeting of Shareholders. The Corporation will provide a copy to TIG of any proposed amendments to the 1994 Plan prior to disclosure of such amendments to the Corporation's shareholders. (vii) The Corporation will not make any distribution of stock or stock rights of the Corporation to shareholders, if made at the election of any of the shareholders of the Corporation and such distribution would result in taxable income to TIG pursuant to Section 305 of the Internal Revenue Code, as amended. (viii) The Corporation will not redeem or repurchase any of the outstanding Common Stock of the Corporation, except as provided in the Note and the Stockholders Agreement. (ix) The Corporation will not merge or consolidate with, or acquire the stock or assets of, any other entity, or otherwise effect a reorganization of the Corporation, in which (in any such transaction) the outstanding Common Stock of the Corporation is issued; provided that, the foregoing shall not apply to any merger, consolidation or reorganization among any of the Corporation's subsidiaries or between the Corporation and any subsidiary, unless such consent is required pursuant to another subparagraph of this Section 5. (x) The Corporation will not expand the size of the Board of Directors to more than eight directors.
Covenants of the Shareholder The Shareholder hereby irrevocably covenants and agrees that during the period commencing on the date hereof and continuing until the termination of this Agreement pursuant to Section 3: (a) it will not, directly or indirectly, through any officer, director, employee, advisor, representative, agent or otherwise: (i) solicit, initiate, knowingly encourage, continue or otherwise facilitate (including, without limitation, by way of furnishing information or entering into any form of agreement, arrangement or understanding) the initiation of any inquiries or proposals regarding an Acquisition Proposal; (ii) participate in any discussions or negotiations regarding any Acquisition Proposal; or (iii) accept or enter into any agreement, letter of intent, arrangement or understanding related to any Acquisition Proposal; (b) if the Shareholder receives any Acquisition Proposal in its capacity as a holder of Shares (including, without limitation, an offer or invitation to enter into discussions), whether written or oral, the Shareholder will as promptly as practicable notify Vasogen, in writing, and provide to Vasogen a copy thereof if written, and if verbal, a description of the principal terms, including the price proposed to be paid in connection therewith, the form of consideration to be paid, the material terms and the identity of the proponent; (c) it will vote the Shares in support of all things proposed by IPC and Vasogen that are necessary, proper or advisable under applicable laws to consummate the Transactions; (d) it will not grant or agree to grant any proxy or other right to the Shares, or enter into any voting trust, vote pooling or other agreement with respect to the right to vote, call Meetings or give consents or approvals of any kind with respect to the Shares, other than pursuant to the provisions hereof; (e) it will not, without the prior written consent of Vasogen, sell, transfer, monetize, hypothecate, pledge, encumber, grant a security interest in, encumber or otherwise convey or grant an option over any of the Shares (or any right or interest therein (legal or equitable)) held by it to any person, entity or group or agree to do any of the foregoing; (f) except as required by applicable Law (after fully consulting with Vasogen), it will not, prior to the public announcement by IPC, IPC Corp. and Vasogen of the terms of the Transactions, directly or indirectly, disclose to any person, firm or corporation (other than on a confidential basis to such advisors (if any) as the Shareholder may determine are necessary to retain specifically for the purposes of this Agreement) the existence of the terms and conditions of this Agreement, the Arrangement Agreement or the Merger Agreement, or any terms or conditions or other information concerning the Transactions; (g) it will not, without the prior written consent of Vasogen, not to be unreasonably withheld, purchase, or enter into any agreement or right to purchase, any additional shares of IPC; and (h) it will do all things required, necessary, proper or advisable to consummate the transactions contemplated by this Agreement, the Arrangement Agreement and the Merger Agreement.
Covenants of the Stockholders Each of the Stockholders hereby covenants and agrees that: