Certain Actions Pending Merger. Except as required by applicable Law or as expressly contemplated by this Agreement, the Company covenants and agrees as to itself and the Company Subsidiaries that, after the date of this Agreement and prior to the Effective Time, the business of it and the Company Subsidiaries shall be conducted in all material respects in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, the Company and Company Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, policyholders, reinsurers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of the foregoing, except as required by applicable Law, as set forth in Section 5.1 of the Company Disclosure Schedule, or as expressly contemplated by this Agreement, the Company covenants and agrees as to itself and the Company Subsidiaries that, after the date of this Agreement and prior to the Effective Time, the Company shall not, and shall cause the Company Subsidiaries not to, without the prior written consent of Parent (in the cases of clauses (g), (h), (i) (with respect to litigation brought in the ordinary course related to claims on insurance policies underwritten the Company and its Affiliates), (k), (l), (m), (n) and (p) not to be unreasonably withheld or delayed): (a) (i) adjust, split, combine or reclassify any of its capital stock or other equity interests, (ii) set any record dates or payment dates for the payment of any dividends or distributions on its capital stock, or make, declare, set aside or pay any dividends on or make any other distribution in respect of any of its capital stock, except, in each case, (A) any such dividends or distributions from any Company Subsidiary to the Company or any other Company Subsidiary, (B) that the Company shall be entitled to pay, and shall pay, regular quarterly dividends on Common Shares not to exceed $0.14 per Common Share per quarter, as of the specified record dates and on the payment dates set forth on Section 5.1(a) of the Company Disclosure Schedule (each such dividend, a “Quarterly Dividend”) and (C) the Special Dividend, or (iii) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company or the Company Subsidiaries, or any other equity interest or any rights, warrants or options to acquire any such shares or interests; (b) issue, grant, deliver, pledge, encumber, sell or purchase any shares of its capital stock or other equity interests, or rights, warrants or options to acquire, or security convertible or exchangeable into any such shares of capital stock or other equity interests; (c) amend (by merger, consolidation or otherwise) its articles of incorporation, code of regulations or other organizational documents in any manner; (d) merge or consolidate with any other Person, or acquire any assets or capital stock of any other Person, other than acquisitions of assets in the ordinary course of business consistent with past practice; (e) (i) create, incur, issue, modify in any material respect, redeem, renew, syndicate or refinance any long-term indebtedness for money borrowed (excluding (A) any letters of credit issued in the ordinary course of business and draws upon existing credit facilities (other than in the ordinary course of business and consistent with the Company’s approved 2016 budget) and (B) such indebtedness, if any, as may be necessary to permit the Company to pay the Special Dividend, provided, that prior to incurring any indebtedness described in clause (B) hereof, the Company will request that Parent provide a loan to fund the Special Dividend and, provided, further, that the Company shall consult with Parent prior to incurring any such indebtedness if Parent does not comply with the Company’s request that it provide a loan to fund the Special Dividend), (ii) guarantee any indebtedness (other than indebtedness of a Company Subsidiary existing on the date hereof or permitted under clause (i) of this Section 5.1(e)), (iii) enter into any swap or hedging transaction or other derivative agreements other than in respect of indebtedness permitted under clause (i) of this Section 5.1(e), or (iv) make any loans, capital contributions to, investments in or advances to any Person (other than the Company and any wholly-owned Subsidiary of the Company) other than in the ordinary course of business consistent with past practice; (f) acquire any Person, assets or businesses with a value or purchase price in the aggregate in excess of $500,000, other than acquisitions of investments held in investment accounts of Company Insurance Subsidiaries in accordance with the Company’s investment guidelines; (g) except as may be required by changes in GAAP or SAP, change any method, practice or principle of accounting; (h) enter into any employment agreement with, or increase the compensation of, any officer, director, consultant or employee of the Company or any Company Subsidiary (including entering into any bonus, severance, change of control, termination, reduction-in-force or consulting agreement or other employee benefits arrangement or agreement pursuant to which such person has the right to any form of compensation from the Company or such Company Subsidiary), or otherwise amend, modify or restate in any material respect any existing agreements with any such person or use its discretion to amend, modify or restate any Benefit Plan or accelerate the vesting or any payment under any Benefit Plan; (i) settle, otherwise compromise or enter into any consent, decree, injunction or similar restraint of form of equitable relief in settlement of (i) any Action where the amount at issue is in excess of $500,000 or (ii) any Action relating to the Merger or the transactions contemplated by this Agreement; (j) sell, lease, license, subject to a Lien, or otherwise surrender, relinquish or dispose of any assets, property or rights (including capital stock of a Company Subsidiary) with a value or purchase price in the aggregate in excess of $500,000, other than sales of investments held in investment accounts of Company Insurance Subsidiaries in the ordinary course of business consistent with past practice; (k) enter into, terminate, modify, release or relinquish any material rights or claims under, or grant any consents under or amend any Material Contract other than in the ordinary course of business consistent with past practice; (l) materially change any underwriting, claim handling, loss control, investment, reserving, actuarial or financial reporting methods, principles, policies or practices of the Company or any Company Subsidiary, except for any such change required by a change in GAAP or SAP; (m) reduce or strengthen any reserves, provisions for losses and other liability amounts in respect of insurance Contracts and assumed reinsurance Contracts, except (i) to the extent required by SAP (disregarding any changes to SAP that are not yet required to be implemented) or GAAP, as applicable or (ii) as a result of loss or exposure payments to other parties in accordance with the terms of insurance Contracts and assumed reinsurance Contracts; (n) terminate, cancel, amend or modify in any material respect any material insurance or reinsurance policies maintained by it covering the Company or any Company Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance or reinsurance coverage, other than in the case of reinsurance policies in the ordinary course of business; (o) make, rescind or change any express or deemed material election concerning Taxes or Tax Returns, file any material amended Tax Return, enter into any material closing agreement with respect to Taxes, settle any material Tax claim or assessment or surrender any right to claim a material refund of Taxes or obtain any Tax ruling; (p) abandon, dedicate to the public, convey title or grant licenses under (other than in the ordinary course of business consistent with past practice) any material Company IP; (q) adopt a plan or complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary; or (r) enter into any agreement to, or the making of any commitment to, take any of the actions prohibited by this Section 5.1.
Appears in 3 contracts
Samples: Merger Agreement (American Financial Group Inc), Merger Agreement (National Interstate CORP), Merger Agreement (American Financial Group Inc)
Certain Actions Pending Merger. Except as required by applicable Law Law, as set forth in Section 5.1 of the Company Disclosure Schedule, or as expressly contemplated by this Agreement, the Company covenants and agrees as to itself and the Company Subsidiaries that, after the date of this Agreement and prior to the Effective Time, the business of it and the Company Subsidiaries shall be conducted in all material respects in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, the Company and Company Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, policyholders, reinsurerscustomers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ ' present employees and agents. Without limiting the generality of the foregoing, except as required by applicable Law, as set forth in Section 5.1 of the Company Disclosure Schedule, or as expressly contemplated by this Agreement, the Company covenants and agrees as to itself and the Company Subsidiaries that, after the date of this Agreement and prior to the Effective Time, the Company Company, other than with respect to actions taken by or at the direction of any Dual Employee, shall not, and shall cause the Company Subsidiaries not to, without the prior written consent of Parent (in the cases of clauses (g), (h), (i) (with respect to litigation brought in the ordinary course related to claims on insurance policies underwritten the Company and its Affiliates), (k), (l), (m), (n) and (p) not to be unreasonably withheld or delayed):
(a) (i) adjust, split, combine or reclassify any of its capital stock or other equity interests, interests or (ii) set any record dates or payment dates for the payment of any dividends or distributions on its capital stockstocks, or make, declare, set aside or pay any dividends on or make any other distribution in respect of any of its capital stock, exceptother than, in each case, (A) any such dividends or distributions from any Company Subsidiary to the Company or any other Company Subsidiary, (B) that the Company shall be entitled to pay, and shall pay, regular quarterly dividends on Common Shares not to exceed $0.14 per Common Share per quarter, as of the specified record dates and on the payment dates set forth on Section 5.1(a) of the Company Disclosure Schedule (each such dividend, a “Quarterly Dividend”) and (C) the Special Dividend, or (iii) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company or the Company Subsidiaries, or any other equity interest or any rights, warrants or options to acquire any such shares or interests;
(b) issue, grant, deliver, pledge, encumber, sell or purchase any shares of its capital stock or other equity interests, or rights, warrants or options to acquire, or security convertible or exchangeable into any such shares of capital stock or other equity interests, or propose to do any of the foregoing;
(c) amend (by merger, consolidation or otherwise) its articles certificate of incorporation, code of regulations bylaws or other organizational documents in any manner;
(d) merge or consolidate with any other Person, or acquire any assets or capital stock of any other Person, other than acquisitions of assets in the ordinary course of business consistent with past practice;
(e) (i) create, incur, issue, modify in any material respect, redeem, renew, syndicate or refinance incur any long-term indebtedness for money borrowed (excluding (A) or guarantee any letters such indebtedness of credit issued another Person in the ordinary course excess of business and draws upon existing credit facilities ($5,000,000, other than in the ordinary course of business and consistent with the Company’s approved 2016 budget) and (B) such indebtednessbusiness, if any, as may be necessary to permit the Company to pay the Special Dividend, provided, that prior to incurring any indebtedness described in clause (B) hereof, the Company will request that Parent provide a loan to fund the Special Dividend and, provided, further, that the Company shall consult with Parent prior to incurring any such indebtedness if Parent does not comply with the Company’s request that it provide a loan to fund the Special Dividend), or (ii) guarantee any indebtedness (other than indebtedness of a Company Subsidiary existing on the date hereof or permitted under clause (i) of this Section 5.1(e)), (iii) enter into any swap or hedging transaction or other derivative agreements other than in respect of indebtedness permitted under clause (i) of this Section 5.1(e)make, or (iv) make commit to make, any loansindividual capital expenditures in excess of $2,500,000, capital contributions to, investments in or advances to any Person (other than the Company and any wholly-owned Subsidiary of the Company) other than in the ordinary course of business consistent with past practicebusiness;
(f) acquire any Person, assets or businesses with a value or purchase price in the aggregate in excess of $500,000, other than acquisitions of investments held in investment accounts of Company Insurance Subsidiaries in accordance with the Company’s investment guidelines;
(g) except as may be required by changes in GAAP applicable Law or SAPGAAP, change any method, practice or principle of accounting;
(hg) enter into any new employment agreement agreements with, or increase the compensation of, any officer, director, consultant officer or employee director of the Company or any Company Subsidiary (including entering into any bonus, severance, change of control, termination, reduction-in-force or consulting agreement or other employee benefits arrangement or agreement pursuant to which such person has the right to any form of compensation from the Company or such Company Subsidiary), other than as required by Law or by written agreements in effect on or prior to the date of this Agreement with such person, or otherwise amend, modify or restate amend in any material respect any existing agreements with any such person or use its discretion to amend, modify or restate amend any Benefit Plan or accelerate the vesting or any payment under any Benefit Plan, other than in the ordinary course of business;
(ih) settle, settle or otherwise compromise any material litigation, arbitration or enter into any consent, decree, injunction other judicial or similar restraint of form of equitable relief in settlement of administrative dispute or proceeding relating to (i) any Action where the amount at issue is Company or the Company Subsidiaries other than in excess the ordinary course of $500,000 business, or (ii) any Action relating to the Merger or the transactions contemplated by this Agreement;
(ji) sell, transfer, lease, licensemortgage, subject to a Lien, encumber or otherwise surrender, relinquish or dispose of any assetsof its material properties or assets to any Person, property or rights except (including capital stock of a Company Subsidiaryi) with a value or purchase price in the aggregate in excess of $500,000, other than sales of investments held in investment accounts of Company Insurance Subsidiaries in the ordinary course of business consistent with past practice, (ii) pursuant to an agreement in effect on the date of this Agreement, or (iii) dispositions of obsolete assets;
(j) make an investment in, or loan to, any Person, except the Company or the Company Subsidiaries, other than in the ordinary course of business;
(k) enter into, terminate, modify, release or relinquish any material rights or claims under, or grant any consents under terminate or amend any Material Contract other than in the ordinary course of business consistent with past practicebusiness;
(l) materially change any underwriting, claim handling, loss control, investment, reserving, actuarial or financial reporting methods, principles, policies or practices of the Company or any Company Subsidiary, except for any such change required by a change in GAAP or SAP;
(m) reduce or strengthen any reserves, provisions for losses and other liability amounts in respect of insurance Contracts and assumed reinsurance Contracts, except (i) to the extent required by SAP (disregarding any changes to SAP that are not yet required to be implemented) or GAAP, as applicable or (ii) as a result of loss or exposure payments to other parties in accordance with the terms of insurance Contracts and assumed reinsurance Contracts;
(n) terminate, cancel, amend or modify in any material respect any material insurance or reinsurance policies maintained by it covering the Company or any Company Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance or reinsurance coverage, other than in the case of reinsurance policies in the ordinary course of business;
(o) make, rescind make or change any express or deemed material election concerning Taxes or Tax Returns, file any material amended Tax Return, enter into any material closing agreement with respect to Taxes, settle any material Tax claim or assessment or surrender any right to claim a material refund of Taxes or obtain any Tax ruling;
(p) abandon, dedicate to the public, convey title or grant licenses under (other than in the ordinary course of business consistent with past practice) any material Company IP;
(q) adopt a plan or complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary; or
(rm) enter into any agreement to, or the making of any commitment to, take any of the actions prohibited by this Section 5.1.
Appears in 2 contracts
Samples: Merger Agreement (MacAndrews & Forbes Holdings Inc.), Merger Agreement (M & F Worldwide Corp)
Certain Actions Pending Merger. Except Prior to the Effective Time or the earlier termination of this Agreement in accordance with its terms, except (w) as set forth in Section 4.1 of the Company Disclosure Schedule, (x) as otherwise expressly contemplated or expressly permitted by this Agreement or the Note Purchase Agreement, (y) to the extent consented to in writing by Sprint (which consent, as to subsections (h), (k) (but only with respect to spectrum acquisitions), (l) (but only with respect to spectrum swaps), (o) (but only with respect to clauses (i) and (iv) thereof) and (v) (but only with respect to marketing campaigns) hereof, will not be unreasonably withheld, conditioned or delayed) or (z) as required by applicable Law or as expressly contemplated by this Agreementa Governmental Entity, the Company covenants shall, and agrees as to itself and shall cause the Company Subsidiaries thatto, after the date of this Agreement and prior to the Effective Time, the business of it and the Company Subsidiaries shall be conducted in all material respects (i) conduct their respective businesses in the ordinary and usual course of business, consistent with past practice andpractice, to the extent consistent therewith, the including maintaining each Company Lease and Company Subsidiaries shall License held by it in full force and effect under all applicable Laws; (ii) use their respective its reasonable best efforts to preserve their the terms of each Company Lease and to preserve the scope of the Company Leased FCC Licenses, including proposed changes in duration, geographic coverage and payments, except the foregoing will not (A) require the Company or any Company Subsidiaries to file any item or take any particular position with the FCC where the Company does not have an independent good faith basis for such filing or position, (B) require the Company or any of the Company Subsidiaries to commence or maintain any litigation or other legal proceedings if in the Company’s good faith judgment such litigation or legal proceedings are not reasonably necessary to preserve the terms of each Company Lease or to preserve the scope of the Company Leased FCC Licenses, (C) preclude the Company or any of the Company Subsidiaries from making a filing or taking a position with the FCC when the Company has a reasonable good faith basis for such filing or position, or (D) require the Company or any of the Company Subsidiaries to renew any terms of a Company Lease unless renewal would be completed in the ordinary course of business organizations intact and maintain existing relations and goodwill consistent with Governmental Entities, policyholders, reinsurers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and past practice; (iii) use its reasonable best efforts to keep available the services of its current officers and its Subsidiaries’ present key employees and agents. Without limiting preserve the generality relationships and goodwill of its business with vendors, distributors, suppliers, employees and other Persons having business relations with the foregoing, except as required by applicable Law, as set forth in Section 5.1 businesses of the Company Disclosure Schedule, or as expressly contemplated by this Agreement, and the Company covenants and agrees as Subsidiaries; (iv) comply in all material respects with all Laws applicable to itself the Company and the Company Subsidiaries thatwherever its business is conducted, after including the date timely filing of this Agreement all reports, forms or other documents with the SEC required under the Securities Act or Exchange Act; and prior (v) comply in all material respects with all Material Contracts. Prior to the Effective Time, the Company shall not, and shall cause the Company Subsidiaries not to, without take any of the prior written consent of Parent (following actions, subject to the exceptions set forth in the cases of clauses (gw), (hx), (i) (with respect to litigation brought in the ordinary course related to claims on insurance policies underwritten the Company and its Affiliates), (k), (l), (m), (ny) and (pz) not to be unreasonably withheld or delayed):above:
(a) (i) adjust, split, combine or reclassify any of its capital stock or other equity interests, (ii) set any record dates or payment dates for the payment of any dividends or distributions on its capital stock, or make, declare, set aside or pay any dividends on or make any other distribution in respect of any of its capital stock; provided, excepthowever, in each case, that this clause (Aa) shall not apply to (i) any such dividends or wholly-owned Subsidiary of the Company with respect to distributions from any Company Subsidiary to the Company or any other wholly-owned Subsidiary of the Company, and (ii) any distributions that are required pursuant to the operating agreement of such Company Subsidiary, including Tax distributions;
(Bb) that split, combine or reclassify any of its capital stock or other equity interests or issue or authorize or propose the Company shall be entitled to payissuance or authorization of any other securities in respect of, and shall pay, regular quarterly dividends on Common Shares not to exceed $0.14 per Common Share per quarter, as of the specified record dates and on the payment dates set forth on Section 5.1(a) of the Company Disclosure Schedule (each such dividend, a “Quarterly Dividend”) and (C) the Special Dividendin lieu of, or (iii) in substitution for shares of its capital stock or other equity interests or repurchase, redeem or otherwise acquire any shares of the capital stock of the Company or the Company Subsidiaries, or any other equity interest or any rights, warrants or options to acquire any such shares or interests;
(b) issue, grant, deliver, pledge, encumber, sell or purchase any shares of its capital stock or other equity interests, or rights, warrants or options to acquire, or security convertible or exchangeable into any such shares of capital stock or other equity interests;
(c) except as set forth on Section 4.1(c) of the Company Disclosure Schedule, issue, deliver, pledge, encumber or sell, or authorize the issuance, delivery, pledge, encumbrance or sale of, or purchase or propose the purchase of, any shares of its capital stock (including Company Common Stock or Clearwire Communications Units) or other equity interests or securities convertible into, or rights, warrants or options to acquire, any such shares of capital stock or other equity interests or other convertible securities (other than the issuance on Option Exercise, an Exchange, a Warrant Exercise or settlement of an RSU, in each case in accordance with their respective present terms or an issuance in exchange for the Notes, and other than as provided for in the terms of any agreement in effect on or prior to the date of this Agreement and set forth on Section 4.1(c) of the Company Disclosure Schedule (true, correct and complete copies of which have been delivered to Sprint)), authorize or propose any change in its equity capitalization, or amend any of the financial or other economic terms of such securities or the financial or other economic terms of any agreement relating to such securities;
(by mergerd) amend its Certificate of Incorporation, consolidation or otherwise) its articles of incorporation, code of regulations By-laws or other organizational documents in any manner;
(d) merge or consolidate with any other Person, or acquire any assets or capital stock of any other Person, other than acquisitions of assets in the ordinary course of business consistent with past practice;
(e) (i) create, incur, issue, modify in incur any material respect, redeem, renew, syndicate or refinance any long-term indebtedness for money borrowed (excluding (Aexcept for the issuance of the Notes pursuant to the Note Purchase Agreement) any letters of credit issued in the ordinary course of business and draws upon existing credit facilities (other than in the ordinary course of business and consistent with the Company’s approved 2016 budget) and (B) such indebtedness, if any, as may be necessary to permit the Company to pay the Special Dividend, provided, that prior to incurring any indebtedness described in clause (B) hereof, the Company will request that Parent provide a loan to fund the Special Dividend and, provided, further, that the Company shall consult with Parent prior to incurring or guarantee any such indebtedness if Parent does not comply with the Company’s request that it provide a loan to fund the Special Dividend)of another Person, (ii) guarantee or repay any such indebtedness (other than mandatory payments required pursuant to the terms of such indebtedness as of a Company Subsidiary existing on the date hereof or permitted under clause (i) of this Section 5.1(e))Agreement, (iii) or enter into any swap or hedging transaction or other derivative agreements other than in respect of indebtedness permitted under clause (i) of this Section 5.1(e), or (iv) make any loans, capital contributions to, investments in or advances to any Person (other than the Company and any wholly-owned Subsidiary of the Company) other than in the ordinary course of business consistent with past practicevendor financing arrangement;
(f) acquire make or authorize any Personcapital, assets operating or businesses with a value or purchase price cash expenditures, other than capital, operating and cash expenditures that are in the aggregate no greater than the amount set forth in excess Section 4.1(f) of $500,000, other than acquisitions of investments held in investment accounts of the Company Insurance Subsidiaries Disclosure Schedule in accordance with the Company’s investment guidelinesplan set forth in Section 4.1(f) of the Company Disclosure Schedule;
(g) except as may be required by changes in GAAP applicable Law or SAPGAAP, change any method, practice or principle of accounting;
(h) except as set forth on Section 4.1(h) of the Company Disclosure Schedule, establish, adopt, enter into or amend any employment agreement withBenefit Plan, pay any bonus to or make any profit-sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation of(including equity-based compensation, whether payable in stock, cash or other property) or remuneration payable to, any officerof its officers (vice president or above) or director of the Company (except that the Company (A) may provide routine, director, consultant reasonable salary increases to employees in the ordinary course of business consistent with past practice in connection with the Company’s customary employee review process and (B) may amend the Benefit Plans to the extent required by applicable Law);
(i) enter into any transaction with any officer (vice president or employee above) or director of the Company or any Company Subsidiary (including entering into Subsidiary, other than as provided for in the terms of any bonus, severance, change agreement in effect on or prior to the date of control, termination, reduction-in-force or consulting agreement or other employee benefits arrangement or agreement pursuant to which such person has the right to any form this Agreement and set forth on Section 4.1(i) of compensation from the Company or such Company SubsidiaryDisclosure Schedule (true and complete copies of which have been delivered to Sprint), or otherwise amend, modify or restate in any material respect any existing agreements with any such person or use its discretion to amend, modify or restate any Benefit Plan or accelerate the vesting or any payment under any Benefit Plan;
(i) settle, otherwise compromise or enter into any consent, decree, injunction or similar restraint of form of equitable relief in settlement of (i) any Action where the amount at issue is in excess of $500,000 or (ii) any Action relating to the Merger or the transactions contemplated by this Agreement;
(j) sell, lease, license, subject to a Lien, settle or otherwise surrendercompromise any material litigation, relinquish arbitration or dispose of any assets, property other judicial or rights (including capital stock of a Company Subsidiary) with a value administrative dispute or purchase price in the aggregate proceeding involving amounts in excess of $500,0005,000,000 individually or $25,000,000 in the aggregate, other than sales of investments held in investment accounts of Company Insurance Subsidiaries any settlement or compromise (A) in the ordinary course of business consistent with past practice, (B) in amounts equal to or lesser than the amounts (if any) reserved with respect thereto on the most recent balance sheet included in the SEC Documents filed prior to the date of this Agreement, or (C) covered by any existing insurance policies subject to the deductible of such insurance policies;
(ki) merge or consolidate with any other entity in any transaction or (ii) sell or acquire any business or assets or any securities of or in any Company Subsidiary, or enter intointo any agreement to do any of the foregoing, terminateother than (A) purchases or sales of products and inventory in the ordinary course of business consistent with past practice, (B) sales of short or long term investments (each as defined under GAAP) in financial instruments in connection with cash management or pursuant to agreements in effect on the date of this Agreement and set forth on Section 4.1(k) of the Company Disclosure Schedule (true, correct and complete copies of which have been delivered to Sprint), or (C) acquisitions of spectrum assets in the ordinary course of business consistent with past practice for aggregate consideration of less than $5,000,000;
(l) sell any spectrum Licenses, spectrum Leases, or any spectrum assets or enter into any swap of spectrum;
(m) renew any spectrum leases in effect as of the date of this Agreement, other than in the ordinary course of business consistent with past practice at a time reasonably prior to the expiration of such lease;
(n) make an investment in, or loan to, any Person, except wholly-owned Company Subsidiaries;
(i) amend, modify, release supplement or relinquish grant any waivers under (other than in the ordinary course of business consistent with past practices and that do not materially increase the term commitment, termination fee or scope of services), or enter into or terminate, any Material Contract, or any Contract with an Equityholder, (ii) enter into or extend the term or scope of any Contract that purports to materially restrict any of the Company, or any existing or future Subsidiary or Affiliate of any of the Company, from engaging in any line of business or in any geographic area, (iii) enter into any material rights Contract that would be breached by, or claims require the consent of any third party in order to continue in full force and effect following, consummation of the transactions contemplated by this Agreement, or (iv) release any Person from any material provision of any confidentiality, standstill or similar agreement, other than as a result of the passage of time or expiration according to its terms;
(p) commit any act, engage in any activity or fail to take any action that would reasonably be expected to cause the impairment of, loss of service area authorized under, or grant the revocation, cancellation or suspension of, any consents material Company License or Company Leased FCC License, except the foregoing will not (A) require the Company to file any item or take any particular position with the FCC when the Company does not have a reasonable good faith basis for such filing or action or (B) preclude the Company from making a filing or taking a position with the FCC when the Company has a reasonable good faith basis for such filing or position;
(q) issue any broadly distributed communication of a general nature to employees (including general communications relating to benefits and compensation) or customers without the prior approval of Sprint, except for (i) communications in the ordinary course of business consistent with past practice that do not relate to the transactions contemplated by this Agreement or (ii) as contemplated by this Agreement or as required by applicable Law (provided that Clearwire may issue such communications if Sprint has not commented on and approved such communications within a reasonably prompt time period);
(r) (i) surrender, or permit a materially adverse modification of, revocation of, forfeiture of, or failure to renew under regular terms, any of the licenses that are material to the business of the Company or amend any Material Contract of the Company Subsidiaries or their Affiliates, or cause the FCC to institute any proceedings for the revocation or suspension of any such licenses that are material to the business of any of the Company or any of the Company Subsidiaries; or (ii) fail to comply in all material respects with all requirements and conditions of the licenses of the Companies or any Company Subsidiary;
(s) other than in the ordinary course of business consistent with past practice;
(l) materially change any underwriting, claim handling, loss control, investment, reserving, actuarial or financial reporting methods, principles, policies or practices of the Company or any Company Subsidiary, except for any such change required by a change in GAAP or SAP;
(m) reduce or strengthen any reserves, provisions for losses and other liability amounts in respect of insurance Contracts and assumed reinsurance Contracts, except (i) to the extent required by SAP (disregarding any changes to SAP that are not yet required to be implemented) or GAAP, as applicable or (ii) as a result of loss or exposure payments to other parties in accordance with the terms of insurance Contracts and assumed reinsurance Contracts;
(n) terminate, cancel, amend or modify in any material respect any material insurance or reinsurance policies maintained by it covering the Company or any Company Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance or reinsurance coverage, other than in the case of reinsurance policies in the ordinary course of business;
(o) make, rescind make or change any express or deemed material election concerning Taxes or Tax Returns, (ii) file any material amended Tax Return, (iii) change any Tax accounting period or any Tax accounting method, (iv) enter into any material closing agreement with respect to material Taxes, (v) settle any material Tax claim or assessment or surrender any right to claim a material refund of Taxes Taxes, (vi) agree to an extension or waiver of the statute of limitations for any material Tax claim or assessment, or (vii) obtain any Tax ruling;
(pt) abandonfile any registration statement under the Securities Act, dedicate except pursuant to an agreement in effect on the publicdate of this Agreement and set forth on Section 4.1(t) of the Company Disclosure Schedule (true, convey title or grant licenses under (other than in the ordinary course correct and complete copies of business consistent with past practice) any material Company IPwhich have been delivered to Sprint);
(qu) adopt disclose any confidential or proprietary information, except (i) pursuant to a plan customary confidentiality or complete non-disclosure agreement or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of (ii) as required by applicable Law; provided that the Company uses its best efforts to obtain assurances that confidential treatment will be accorded to such information;
(v) enter into any Contract related to additional retail facilities, engage in any marketing or any media campaign that is not consistent in all material respects with such campaigns conducted by the Company Subsidiarysince January 1, 2012 and prior to the date of this Agreement, or increase spending with respect to such campaigns above the level of spending by the Company since January 1, 2012 and prior to the date of this Agreement; or
(rw) enter into any agreement to, or the making of make any commitment to, take any of the actions prohibited by this Section 5.14.1.
Appears in 2 contracts
Samples: Merger Agreement (Clearwire Corp /DE), Merger Agreement (Sprint Nextel Corp)
Certain Actions Pending Merger. Except as required by applicable Law or as expressly contemplated by this Agreement, the Company covenants and agrees as to itself and the Company Subsidiaries that, after the date of this Agreement and prior Prior to the Effective Time, (i) the business of it Companies shall (and shall cause the Company Subsidiaries shall be conducted in all material respects to and, to the extent within the Company’s Control, cause the Canadian Joint Venture to) conduct their respective businesses in the ordinary and usual course of business, consistent with past practice and, and (ii) except as and to the extent consistent therewithprohibited by the respective Sections 4.13 of the indentures governing the LP’s outstanding 14% Senior Secured Notes due 2013, the Company 16.5% Senior Unsecured Notes due 2013, and Company Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entitiesthe 18% Senior Unsecured Notes due 2013, policyholders, reinsurers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality none of the foregoing, except as required by applicable Law, as set forth in Section 5.1 of the Company Disclosure Schedule, or as expressly contemplated by this Agreement, the Company covenants and agrees as to itself and the Company Subsidiaries that, after the date of this Agreement and prior to the Effective Time, the Company Companies shall not, (and shall cause the Company Subsidiaries not to and, to the extent within the Company’s Control, cause the Canadian Joint Venture not to) take any of the following actions, without except with the prior written consent of Parent H (which in the cases case of clauses (f), (g), (h), (i) (with respect to litigation brought in the ordinary course related to claims on insurance policies underwritten the Company and its Affiliates), (kj), (lk)(A), (m), (n) ), (o), (q), (r), and (p) t), shall not be unreasonably withheld, such reasonableness to be unreasonably withheld determined from the perspective of H) or delayed):as expressly contemplated or permitted by this Agreement:
(a) (i) adjust, split, combine or reclassify any of its capital stock or other equity interests, (ii) set any record dates or payment dates for the payment of any dividends or distributions on its capital stock, or make, declare, set aside or pay any dividends on or make any other distribution in respect of any of its capital stock; provided, excepthowever, in each case, that this clause (Aa) shall not apply to (i) any wholly-owned subsidiary of the Company and (ii) the Canadian Joint Venture if such dividends or distributions from any Company Subsidiary action is pursuant to the Company or terms of any other Company Subsidiary, (B) that the Company shall be entitled to pay, and shall pay, regular quarterly dividends on Common Shares not to exceed $0.14 per Common Share per quarter, as of the specified record dates and agreement in effect on the payment dates date of this Agreement and set forth on Section 5.1(a4.1(a) of the Company Disclosure Schedule (each such dividendtrue and complete copies of which have been delivered to H);
(b) split, a “Quarterly Dividend”) and (C) combine or reclassify any of its capital stock or other equity interests or issue or authorize or propose the Special Dividendissuance or authorization of any other securities in respect of, in lieu of, or (iii) in substitution for shares of its capital stock or other equity interests or repurchase, redeem or otherwise acquire any shares of the its capital stock or other equity interests other than pursuant to the terms of any agreement in effect on the date of this Agreement and set forth on Section 4.1(b) of the Company or the Company Subsidiaries, or any other equity interest or any rights, warrants or options Disclosure Schedule (true and complete copies of which have been delivered to acquire any such shares or interestsH);
(bc) issue, grant, deliver, pledge, encumberencumber or sell, sell or authorize the issuance, delivery, pledge, encumbrance or sale of, or purchase or propose the purchase of, any shares of its capital stock or other equity interestsinterests or securities convertible into, or rights, warrants or options to acquire, or security convertible or exchangeable into any such shares of capital stock or other equity interestsinterests or other convertible securities (other than the issuance on Option Exercise, an Exchange, a Transfer or a Warrant Exercise, in each case in accordance with their respective present terms), authorize or propose any change in its equity capitalization, or amend any of the financial or other economic terms of such securities or the financial or other economic terms of any agreement to which any of the Companies is a party relating to such securities, except as set forth on Section 4.1(c) of the Company Disclosure Schedule;
(cd) amend (by mergerits Certificate of Incorporation, consolidation or otherwise) its articles of incorporation, code of regulations By-laws or other organizational documents in any manner;
(de) merge or consolidate with any other Person, or acquire any assets or capital stock of any other Person, other than acquisitions of assets in the ordinary course of business consistent with past practice;
(ef) (i) create, incur, issue, modify in incur any material respect, redeem, renew, syndicate or refinance any long-term indebtedness for money borrowed or guarantee any such indebtedness of another Person, except as set forth on Section 4.1(f) of the Company Disclosure Schedule;
(excluding (Ag) make or authorize any letters of credit issued capital, operating or cash expenditures, other than capital, operating and cash expenditures that are in the ordinary course of business and draws upon existing credit facilities aggregate no greater than (other than i) $108 million in the ordinary course of business and consistent with aggregate for the Company’s approved 2016 budgetperiod September 1, 2009 through December 31, 2009, (ii) $137 million in the aggregate for the period September 1, 2009 through January 31, 2010, (iii) $158 million in the aggregate for the period September 1, 2009 through February 28, 2010 and (Biv) such indebtedness$170 million in the aggregate for the period September 1, 2009 through March 31, 2010; provided, that, if any, as may be necessary to permit the Company to pay the Special Dividend, provided, that transaction is not consummated prior to incurring any indebtedness described in clause (B) hereofApril 1, 2010, the Company will request that Parent provide a loan provisions of this Section 4.1(g) shall cease to fund the Special Dividend and, apply; provided, further, that the Company shall consult with Parent prior costs calculated pursuant to incurring any such indebtedness if Parent does not comply with the Company’s request that it provide a loan to fund the Special Dividend), (ii) guarantee any indebtedness (other than indebtedness of a Company Subsidiary existing on the date hereof or permitted under clause (i) of this Section 5.1(e)), (iii4.1(g) enter into shall not include any swap employee severance expenses or hedging transaction or other derivative agreements other than in respect of indebtedness permitted under clause (i) of this Section 5.1(e), or (iv) make any loans, capital contributions to, investments in or advances to any Person (other than the Company and any whollyD&O “run-owned Subsidiary of the Company) other than in the ordinary course of business consistent with past practiceoff” insurance policy premiums;
(f) acquire any Person, assets or businesses with a value or purchase price in the aggregate in excess of $500,000, other than acquisitions of investments held in investment accounts of Company Insurance Subsidiaries in accordance with the Company’s investment guidelines;
(gh) except as may be required by changes in GAAP applicable law or SAPGAAP, change any method, practice or principle of accounting;
(hi) enter into any new employment agreement agreements with, or increase the compensation of, any officer, director, consultant officer (vice president or employee above) or director of any of the Company or any Company Subsidiary Companies (including entering into any bonus, severance, change of control, termination, reduction-in-force or consulting agreement or other employee benefits arrangement or agreement pursuant to which such person has the right to any form of compensation from any of the Companies), other than as required by law or by written agreements in effect on or prior to the date of this Agreement and set forth on Section 4.1(i) of the Company or Disclosure Schedule (true and complete copies of which have been delivered to H) with such Company Subsidiary)person, or otherwise amend, modify or restate amend in any material respect any existing agreements with any such person or use its discretion to amend, modify or restate amend any Benefit Company Plan or accelerate the vesting or any payment under any Benefit Company Plan;
(ij) settle, otherwise compromise or enter into any consenttransaction with any officer (vice president or above) or director of any of the Companies, decreeother than as provided for in the terms of any agreement in effect on or prior to the date of this Agreement and set forth on Section 4.1(j) of the Company Disclosure Schedule (true and complete copies of which have been delivered to H);
(k) settle or otherwise compromise any material litigation, injunction arbitration or similar restraint of form of equitable relief in settlement of other judicial or administrative dispute or proceeding relating to (iA) any Action where of the amount at issue is in excess of $500,000 Companies or (iiB) any Action relating to the Merger or the transactions contemplated by this Agreement;
(jl) sell, transfer, lease, licensemortgage, encumber or otherwise dispose of or subject to a Lien, or otherwise surrender, relinquish or dispose of any assets, property or rights Lien (including capital stock pursuant to a sale-leaseback transaction) any of a its properties or assets (including securities of the Company SubsidiarySubsidiaries and the Canadian Joint Venture) with a value or purchase price in the aggregate in excess of $500,000to any Person, other than sales of investments held in investment accounts of Company Insurance Subsidiaries except (i) in the ordinary course of business consistent with past practice, (ii) pursuant to an agreement in effect on the date of this Agreement and set forth on Section 4.1(l) of the Company Disclosure Schedule (true and complete copies of which have been delivered to H), or (iii) dispositions of obsolete or worthless assets;
(km) make an investment in, or loan to, any Person, except (i) the Companies or wholly-owned subsidiaries of the Companies or (ii) the Canadian Joint Venture pursuant to an agreement in effect on the date of this Agreement and set forth on Section 4.1(m) of the Company Disclosure Schedule (true and complete copies of which have been delivered to H);
(n) (i) enter into, terminate, modify, release or relinquish any material rights or claims under, or grant any consents under terminate or amend any Material Contract that is material to the Companies, taken as a whole, other than in the ordinary course of business consistent with past practice, (ii) enter into or extend the term or scope of any Contract that purports to restrict any of the Companies, or any existing or future subsidiary or Affiliate of any of the Companies, from engaging in any line of business or in any geographic area, or (iii) enter into any Contract that would be breached by, or require the consent of any third party in order to continue in full force following, consummation of the transactions contemplated by this Agreement, or (iv) release any Person from, or modify or waive any provision of, any confidentiality, standstill or similar agreement;
(lo) materially change issue any underwriting, claim handling, loss control, investment, reserving, actuarial broadly distributed communication of a general nature to employees (including general communications relating to benefits and compensation) or financial reporting methods, principles, policies or practices customers without the prior approval of the Company or any Company SubsidiaryH, except for any such change required by a change in GAAP or SAP;
(m) reduce or strengthen any reserves, provisions for losses and other liability amounts in respect of insurance Contracts and assumed reinsurance Contracts, except (i) to the extent required by SAP (disregarding any changes to SAP that are not yet required to be implemented) or GAAP, as applicable or (ii) as a result of loss or exposure payments to other parties in accordance with the terms of insurance Contracts and assumed reinsurance Contracts;
(n) terminate, cancel, amend or modify in any material respect any material insurance or reinsurance policies maintained by it covering the Company or any Company Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance or reinsurance coverage, other than in the case of reinsurance policies communications in the ordinary course of businessbusiness that do not relate to the transactions contemplated by this Agreement or as required by applicable law (provided that H is afforded a reasonable opportunity to review and comment thereon);
(op) make(i) surrender, rescind or to permit a materially adverse modification of, revocation of, forfeiture of, or failure to renew under regular terms, any of the licenses that are material to the business of any of the Companies or any of the Company Subsidiaries or their Affiliates, or cause the FCC to institute any proceedings for the revocation, suspension, or materially adverse modification of any such licenses that are material to the business of any of the Companies or any of the Company Subsidiaries; or (ii) fail to comply in all material respects with all requirements and conditions of the licenses of the Companies;
(q) make or change any express or deemed material election concerning Taxes or Tax Returns, file any material amended Tax Return, enter into any material closing agreement with respect to Taxes, settle any material Tax claim or assessment or surrender any right to claim a material refund of Taxes or obtain any Tax ruling;
(pr) abandonfile any registration statement under the Securities Act, dedicate other than pursuant to the publicRegistration Rights Agreement dated as of July 24, convey title or grant licenses under (other than in 2008 among the ordinary course of business consistent with past practice) any material Company IPCompany, Master Fund, Special Fund, Harbinger Co-Investment Fund, L.P. and Harbinger Capital Partners Fund I, L.P.;
(qs) adopt without limiting clause (n), take any actions to (i) terminate, amend or otherwise modify the Cooperation Agreement (except that the Company hereby agrees that it shall as promptly as practicable after the date of this Agreement request (and shall use its best efforts) to have Inmarsat agree to (A) accept cash in lieu of issuances of Common Stock under the Cooperation Agreement and (B) extend the date that a plan Triggering Investment is consummated and identified under the Cooperation Agreement to a date subsequent to the Closing Date (provided that, without the prior written consent of H, the Company shall not pay or complete agree to pay any amounts or partial liquidation, dissolution, restructuring, recapitalization make any financial or other reorganization of material accommodations to obtain Inmarsat’s agreement thereto)), or (ii) declare a Triggering Investment under the Cooperation Agreement;
(t) disclose any confidential or proprietary information, except (i) pursuant to a customary confidentiality or non-disclosure agreement or (ii) as required by applicable law; provided that the Company or any Company Subsidiaryuses its best efforts to obtain assurances that confidential treatment will be accorded to such information; or
(ru) enter the entering into any agreement to, or the making of any commitment to, take any of the actions prohibited by this Section 5.14.1.
Appears in 1 contract
Certain Actions Pending Merger. Except as required by applicable Law Law, as set forth in Section 5.01 of the Company Disclosure Schedule, or as expressly contemplated by this Agreement, the Company covenants and agrees agrees, as to itself and the Company Subsidiaries Subsidiaries, that, after the date of this Agreement and prior to the Effective Time, the business of it the Company and the Company Subsidiaries shall be conducted in all material respects in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, the Company and the Company Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, policyholders, reinsurers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present employees and agentsassociates. Without limiting the generality of the foregoing, except as required by applicable Law, as set forth in Section 5.1 5.01 of the Company Disclosure Schedule, or as expressly contemplated by this Agreement, the Company covenants and agrees agrees, as to itself and the Company Subsidiaries that, after the date of this Agreement and prior to the Effective Time, the Company shall not, and shall cause the Company Subsidiaries not to, without the prior written consent of Parent (in the cases of clauses (gSections 5.01(f), (h5.01(g), (i5.01(h) (only with respect to litigation brought in the ordinary course related to claims on insurance policies underwritten the Company and its Affiliates), (k5.01(j), (l5.01(k), (m), (n5.01(l) and (p5.01(n) not to be unreasonably withheld or delayed):
(a) (i) adjust, split, combine or reclassify any of its capital stock or other equity interests, (ii) other than solely in connection with (A) the cash dividend declared on February 13, 2018, payable on April 16, 2018, in an amount of $0.17 per share and (B) periodic cash dividends paid by the Company on preferred shares outstanding on the date hereof in an amount not in excess of the amounts required by the applicable certificates of designation for such preferred shares, with record and payment dates generally consistent with the timing of record and payment dates in the most recent comparable prior year fiscal quarter prior to the date of this Agreement, set any record dates or payment dates for the payment of any dividends or distributions on its capital stock, or make, declare, set aside or pay any dividends on on, or make any other distribution in respect of of, any of its capital stock, except, in each case, (A) any such dividends or distributions from any Company Subsidiary to the Company or any other Company Subsidiary, (B) that the Company shall be entitled to pay, and shall pay, regular quarterly dividends on Common Shares not to exceed $0.14 per Common Share per quarter, as of the specified record dates and on the payment dates set forth on Section 5.1(a) of the Company Disclosure Schedule (each such dividend, a “Quarterly Dividend”) and (C) the Special Dividend, Subsidiary or (iii) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company or the Company Subsidiaries, or any other equity interest or any rights, warrants or options to acquire any such shares or interests;
(b) issue, authorize the issuance of, grant, deliver, pledge, encumber, sell or purchase any shares of its capital stock or other equity interests, or rights, warrants or options to acquire, or security securities convertible or exchangeable into any such shares of capital stock or other equity interests;
(c) amend (by merger, consolidation or otherwise) its articles certificate of incorporation, code of regulations bylaws or other organizational documents in any mannermanner or adopt or implement any shareholder rights plan or similar arrangement;
(d) merge or consolidate with any other Person, or acquire any Person, business, assets or capital stock of any other PersonPerson for consideration in excess of $15,000,000 individually or $50,000,000 in the aggregate, other than (i) the acquisitions of assets in the ordinary course of business consistent with past practice, (ii) investments held in investment accounts of the Company or Company Insurance Subsidiaries in accordance with the Company’s investment guidelines or (iii) intercompany transactions between the Company and Company Subsidiaries;
(e) (i) create, incur, issue, modify in any material respect, redeem, renew, syndicate or refinance any long-term indebtedness for money borrowed in excess of $50,000,000 (excluding (A) the replacement of an existing credit facility with a new facility, (B) any letters of credit issued in the ordinary course of business and (C) draws upon existing credit facilities (other than in the ordinary course of business and consistent with the Company’s approved 2016 budget) and (B) such indebtedness, if any, as may be necessary to permit the Company to pay the Special Dividend, provided, that prior to incurring any indebtedness described in clause (B) hereof, the Company will request that Parent provide a loan to fund the Special Dividend and, provided, further, that the Company shall consult with Parent prior to incurring any such indebtedness if Parent does not comply with the Company’s request that it provide a loan to fund the Special Dividendfacilities), (ii) guarantee any indebtedness (in excess of $50,000,000, other than indebtedness of a (x) intercompany guarantees among the Company Subsidiary and Company Subsidiaries or (y) pursuant to existing on the date hereof or permitted under clause (i) of this Section 5.1(e))agreements or, (iii) other than by Company Insurance Subsidiaries in accordance with the Company’s investment guidelines, enter into any swap or hedging transaction or other derivative agreements other than in respect of indebtedness permitted under clause (i) of this Section 5.1(e), agreement or (iv) other than by Company Insurance Subsidiaries in accordance with the Company’s investment guidelines make any loans, capital contributions to, investments in or advances in excess of $50,000,000 in the aggregate to any Person (other than the Company and any wholly-wholly owned Subsidiary of the Company) other than pursuant to existing agreements or, in each of (i) through (iv) above, in the ordinary course of business consistent with past practice;
(f) acquire any Person, assets or businesses with a value or purchase price in the aggregate in excess of $500,000, other than acquisitions of investments held in investment accounts of Company Insurance Subsidiaries in accordance with the Company’s investment guidelines;
(g) except as may be required by changes in applicable Law GAAP or SAP, change any material method, practice or principle of accounting;
(hg) enter into any employment agreement with, or increase the compensation of, any officer, director, consultant or employee of the Company or any Company Subsidiary with an annual base salary or base wage rate in excess of $200,000 (including entering entry into any bonus, severance, change of control, termination, reduction-in-force or consulting agreement or other employee benefits arrangement or agreement pursuant to which such person has the right to any form of compensation from the Company or such Company Subsidiary), or otherwise enter into, amend, modify or restate in any material respect any existing agreements with any such person or use its discretion to amend, modify or restate any Benefit Plan material benefit plan or accelerate the vesting or of any payment under any Benefit Planmaterial benefit plan;
(ih) settle, otherwise compromise or enter into any consent, decree, injunction or similar restraint of or form of equitable relief in settlement of (i) any Action where the amount at issue is in excess of $500,000 15,000,000 other than the settlement or compromise of any Action (x) arising from insurance policy or service contract claims in the ordinary course of business and consistent with past practice or (y) for less than $5,000,000 individually or $15,000,000 in the aggregate or (ii) any Action relating to the Merger or the transactions contemplated by this Agreement;
(ji) sell, lease, license, subject to a Lien (other than a Permitted Lien), or otherwise surrender, relinquish or dispose of any assets, property or rights (including capital stock of a Company Subsidiary) with a value or purchase price in the aggregate consideration in excess of $500,00015,000,000 individually or $50,000,000 in the aggregate, other than sales of investments held in investment accounts of Company Insurance Subsidiaries in the ordinary course of business consistent with past practice;
(kj) enter into, terminateterminate (other than as a result of expiration at the conclusion of the term thereof), materially modify, release or relinquish any material rights or claims under, or grant any consents under or materially amend any Material Contract other than in the ordinary course of business consistent with past practice;
(lk) materially change any underwriting, material claim handling, loss control, investment, reservingreserve, actuarial or financial reporting methods, principles, policies or practices of the Company or any Company Subsidiary, except for any such change required by a change in applicable Law, GAAP or SAP;
(ml) reduce or strengthen any reserves, provisions for losses and other liability amounts in respect of insurance Contracts and assumed reinsurance Contracts, except (i) to the extent required by SAP (disregarding any changes to SAP that are not yet required to be implemented) or GAAP, as applicable or applicable, (ii) as a result of loss loss, expense or exposure payments to other parties in accordance with the terms of insurance Contracts and assumed reinsurance Contracts;
Contracts or (niii) terminate, cancel, amend or modify in any material respect any material insurance or reinsurance policies maintained by it covering the Company or any Company Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance or reinsurance coverage, other than in the case of reinsurance policies in the ordinary course of businessbusiness consistent with past practice;
(om) make, rescind or change any express or deemed material election concerning Taxes or Tax Returns, file any material amended Tax Return, enter into any material closing agreement with respect to material Taxes, settle any material Tax claim or assessment or surrender any right to claim a material refund of Taxes or Taxes, obtain any Tax ruling, adopt or change any method of Tax accounting, extend or waive the statute of limitations period applicable to any Tax or Tax Return, or take or cause any action outside the ordinary course of business in respect of any non-U.S. Company Subsidiary which could (i) increase Parent’s or any of its Affiliates’ (which following the Closing shall include the Company and the Company Subsidiaries) liability for Taxes or (ii) result in, or change the character of any, income or gain (including any “subpart F income” as defined in Section 952 of the Code) that Parent or any of its Affiliates (which following the Closing shall include the Company and the Company Subsidiaries) must report on any tax Return;
(pn) abandon, dedicate to the public, convey title to or grant licenses under (other than in the ordinary course of business consistent with past practice) any material Company IP;
(qo) adopt a plan or of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary;
(p) enter into, waive, or amend, in a manner adverse to the Company or any Company Subsidiary, any Related Party Agreement; or
(rq) enter into any agreement to, or the making make of any commitment to, take any of the actions prohibited by this Section 5.15.01.
Appears in 1 contract
Samples: Merger Agreement (Amtrust Financial Services, Inc.)
Certain Actions Pending Merger. Except as required by applicable Law or as expressly contemplated by this Agreement, the Company covenants and agrees as to itself and the Company Subsidiaries that, after the date of this Agreement and prior to the Effective Time, the business of it the Company and the Company Subsidiaries shall be conducted in all material respects in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, the Company and Company Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, policyholders, reinsurerscustomers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the services of its the Company and its Subsidiaries’ present employees and agents. Without limiting the generality of the foregoing, except as required by applicable Law, as set forth in Section 5.1 of the Company Disclosure Schedule, Law or as expressly contemplated by this Agreement, the Company covenants and agrees as to itself and the Company Subsidiaries that, after the date of this Agreement and prior to the Effective Time, the Company shall not, and shall cause the Company Subsidiaries not to, without the prior written consent of Parent (not to be unreasonably withheld or delayed in the cases case of clauses (ge) through (k) below (or clause (l) as it applies to clauses (e) through (k) below), (h), (i) (and without the prior written consent of the Board to the extent consistent with respect to litigation brought in the ordinary course related to claims on insurance policies underwritten past practice of the Company and its Affiliates), (k), (l), (m), (n) and (p) not to be unreasonably withheld or delayed):
(a) (i) adjust, split, combine or reclassify any of its capital stock or other equity interests, interests or (ii) set any record dates or payment dates for the payment of any dividends or distributions on its capital stock, or make, declare, set aside or pay any dividends on or make any other distribution in respect of any of its capital stock, exceptother than, in each case, (A) any such dividends or distributions from any Company Subsidiary to the Company or any other Company Subsidiary, (B) that the Company shall be entitled to pay, and shall pay, regular quarterly dividends on Common Shares not to exceed $0.14 per Common Share per quarter, as of the specified record dates and on the payment dates set forth on Section 5.1(a) of the Company Disclosure Schedule (each such dividend, a “Quarterly Dividend”) and (C) the Special Dividend, or (iii) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company or the Company Subsidiaries, or any other equity interest or any rights, warrants or options to acquire any such shares or interests;
(b) issue, grant, deliver, pledge, encumber, sell or purchase any shares of its capital stock or other equity interests, or rights, warrants or options to acquire, or security convertible or exchangeable into any such shares of capital stock or other equity interests, or propose to do any of the foregoing other than pursuant to Company Options or Company RSU Awards existing as of the date hereof;
(c) amend (by merger, consolidation or otherwise) its articles certificate of incorporation, code of regulations bylaws or other organizational documents in any manner;
(d) merge or consolidate with any other Person, or acquire any assets or capital stock of any other Person, other than acquisitions of assets in the ordinary course of business consistent with past practice;
(e) (i) create, incur, issue, modify in any material respect, redeem, renew, syndicate or refinance incur any long-term indebtedness for money borrowed (excluding (A) or guarantee any letters such indebtedness of credit issued another Person in excess of $5,000,000, individually, or $10,000,000, in the ordinary course of business and draws upon existing credit facilities (aggregate, other than in the ordinary course of business and consistent with the Company’s approved 2016 budget) and (B) such indebtednessbusiness, if any, as may be necessary to permit the Company to pay the Special Dividend, provided, that prior to incurring any indebtedness described in clause (B) hereof, the Company will request that Parent provide a loan to fund the Special Dividend and, provided, further, that the Company shall consult with Parent prior to incurring any such indebtedness if Parent does not comply with the Company’s request that it provide a loan to fund the Special Dividend), or (ii) guarantee any indebtedness (other than indebtedness of a Company Subsidiary existing on the date hereof or permitted under clause (i) of this Section 5.1(e)), (iii) enter into any swap or hedging transaction or other derivative agreements other than in respect of indebtedness permitted under clause (i) of this Section 5.1(e)make, or (iv) make commit to make, any loansindividual capital expenditures in excess of $5,000,000, capital contributions to, investments in or advances to any Person (other than the Company and any wholly-owned Subsidiary of the Company) other than in the ordinary course of business consistent with past practicebusiness;
(f) acquire any Person, assets or businesses with a value or purchase price in the aggregate in excess of $500,000, other than acquisitions of investments held in investment accounts of Company Insurance Subsidiaries in accordance with the Company’s investment guidelines;
(g) except as may be required by changes in GAAP applicable Law or SAPGAAP, change any method, practice or principle of accounting;
(hg) enter into any new employment agreement agreements with, or increase the compensation of, any officer, director, consultant officer or employee director of the Company or any Company Subsidiary (including entering into any bonus, severance, change of control, termination, reduction-in-force or consulting agreement or other employee benefits arrangement or agreement pursuant to which such person has the right to any form of compensation from the Company or such Company Subsidiary), other than as required by Law or by written agreements in effect on or prior to the date of this Agreement with such person, or otherwise amend, modify or restate amend in any material respect any existing agreements with any such person or use its discretion to amend, modify or restate amend any Benefit Plan or accelerate the vesting or any payment under any Benefit Plan, other than in the ordinary course of business;
(ih) settle, settle or otherwise compromise any material litigation, arbitration or enter into any consent, decree, injunction other judicial or similar restraint of form of equitable relief in settlement of administrative dispute or proceeding relating to (i) any Action where the amount at issue is Company or the Company Subsidiaries, other than in excess the ordinary course of $500,000 business, or (ii) any Action relating to the Merger or the transactions contemplated by this Agreement, except for, after reasonable consultation with Parent, settlements that are solely to provide additional disclosure in the Schedule 14D-9;
(i) sell, transfer, lease, mortgage, encumber or otherwise dispose of any of its material properties or assets to any Person, except (i) in the ordinary course of business, (ii) pursuant to an agreement in effect on the date of this Agreement, or (iii) dispositions of obsolete assets;
(j) sell, lease, license, subject to a Lienmake an investment in, or otherwise surrenderloan to, relinquish any Person, except the Company or dispose the Company Subsidiaries, and except to the directors of the Company pursuant to any assets, property or rights (including capital stock advancement obligations existing as of a Company Subsidiary) with a value or purchase price in the aggregate in excess date of $500,000this Agreement, other than sales of investments held in investment accounts of Company Insurance Subsidiaries in the ordinary course of business consistent with past practice;
(k) enter into, terminate, modify, release or relinquish any material rights or claims under, or grant any consents under or amend any Material Contract other than in the ordinary course of business consistent with past practice;
(l) materially change any underwriting, claim handling, loss control, investment, reserving, actuarial or financial reporting methods, principles, policies or practices of the Company or any Company Subsidiary, except for any such change required by a change in GAAP or SAP;
(m) reduce or strengthen any reserves, provisions for losses and other liability amounts in respect of insurance Contracts and assumed reinsurance Contracts, except (i) to the extent required by SAP (disregarding any changes to SAP that are not yet required to be implemented) or GAAP, as applicable or (ii) as a result of loss or exposure payments to other parties in accordance with the terms of insurance Contracts and assumed reinsurance Contracts;
(n) terminate, cancel, amend or modify in any material respect any material insurance or reinsurance policies maintained by it covering the Company or any Company Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance or reinsurance coverage, other than in the case of reinsurance policies in the ordinary course of business;
(ok) makeenter into, rescind terminate or change any express or deemed material election concerning Taxes or Tax Returns, file amend any material amended Tax Return, enter into any material closing agreement with respect to Taxes, settle any material Tax claim or assessment or surrender any right to claim a material refund of Taxes or obtain any Tax ruling;
(p) abandon, dedicate to the public, convey title or grant licenses under (contract other than in the ordinary course of business consistent with past practice) any material Company IP;
(q) adopt a plan or complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiarybusiness; or
(rl) enter into any agreement to, or the making of make any commitment to, take any of the actions prohibited by this Section 5.1.6.1. Notwithstanding anything to the contrary contained herein, the payment of any distributions by the Company or the Company Subsidiaries that were approved by the Company Board or the governing body of such Company Subsidiary prior to the execution hereof shall not be prohibited hereby, and shall not constitute a breach of this Agreement.1
Appears in 1 contract
Samples: Merger Agreement (Calamos Asset Management, Inc. /DE/)
Certain Actions Pending Merger. Except as required by applicable Law or Law, as set forth in Section 5.01 of the Company Disclosure Schedule, as expressly contemplated by this AgreementAgreement or with respect to actions or omissions taken by or which have been specifically directed by any Designated Individual, the Company covenants and agrees agrees, as to itself and the Company Subsidiaries Subsidiaries, that, after the date of this Agreement and prior to the Effective Time, the business of it the Company and the Company Subsidiaries shall be conducted in all material respects in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, the Company shall, and shall cause each Company Subsidiaries shall Subsidiary to, use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, policyholderssanctioning bodies, reinsurersteam owners, drivers, sponsors, media organizations, fans, event attendees, suppliers, licensors, licensees, distributors, creditors, lessors, employees and employees, business associates and keep available the services of its and its Subsidiaries’ present employees and agentsother third parties. Without limiting the generality of the foregoing, except as required by applicable Law, as set forth in Section 5.1 5.01 of the Company Disclosure Schedule, or as expressly contemplated by this AgreementAgreement or with respect to actions or omissions taken by or which have been specifically directed by any Designated Individual, the Company covenants and agrees agrees, as to itself and the Company Subsidiaries that, after the date of this Agreement and prior to the Effective Time, the Company shall not, and shall cause the each Company Subsidiaries Subsidiary not to, without the prior written consent of Parent (in the cases of clauses (g), (h), (i) (with respect to litigation brought in the ordinary course related to claims on insurance policies underwritten the Company and its Affiliates), (k), (l), (m), (n) and (p) not to be unreasonably withheld or delayed):Parent:
(a) (i) adjust, split, combine or reclassify any of its capital stock or other equity interestsinterests or authorize the issuance of any other securities in respect of, in lieu of, or in substitution for, shares of its capital stock, (ii) set any record dates or payment dates for the payment of any dividends or distributions (whether payable in cash, stock, property or a combination thereof) on its capital stock, or make, declare, set aside or pay any dividends on on, or make any other distribution in respect of of, any of its capital stock, except, in each case, for (Ax) the Company’s regular annual dividend in a manner consistent with past practice (including with respect to the timing of payment, source of funds and aggregate amount thereof) and (y) any such dividends or distributions from any Company Subsidiary to the Company or any other Company Subsidiary, (B) that the Company shall be entitled to pay, and shall pay, regular quarterly dividends on Common Shares not to exceed $0.14 per Common Share per quarter, as of the specified record dates and on the payment dates set forth on Section 5.1(a) of the Company Disclosure Schedule (each such dividend, a “Quarterly Dividend”) and (C) the Special Dividend, or (iii) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company or the Company Subsidiaries, or any other equity interest or any rights, warrants or options to acquire any such shares or interestsinterests (other than the acceptance of shares of Company Common Stock as payment for the exercise price or withholding Taxes incurred in connection with the vesting, exercise or settlement of Company Equity Awards); or (iv) enter into any voting agreement with respect to the capital stock of the Company;
(b) (i) issue, authorize the issuance of, grant, deliver, pledge, encumber, sell or purchase any shares of its capital stock or other equity interests, or rights, warrants or options to acquire, or security securities convertible or exchangeable into any such shares of capital stock or other equity interests, other than to the Company or the issuance of Company Common Stock issuable pursuant to Company Equity Awards issued under the Company Stock Plans and outstanding as of the date of this Agreement as set forth in Section 3.02(a) or as are issued after the date hereof as permitted under this Agreement, (ii) amend or modify any term or provision of any of its outstanding equity securities or (iii) accelerate or waive any restrictions pertaining to the vesting of any options or other equity awards, warrants or other rights of any kind to acquire any shares of capital stock;
(c) amend or propose to amend (by merger, consolidation or otherwise) its articles of incorporation, code of regulations bylaws or other organizational documents in any mannermanner or adopt or implement any shareholder rights agreement, “poison pill” or similar plan or agreement;
(d) (i) merge or consolidate with any other Person, or (ii) acquire or agree to acquire, directly or indirectly, by merger or otherwise, or by purchasing a substantial equity interest in, any Person, business, assets or capital stock of any other PersonPerson for, other than acquisitions of assets in the ordinary course case of business consistent with past practiceclause (ii), consideration in excess of $1,000,000 individually or $5,000,000 in the aggregate;
(e) except (x) as set forth on Section 5.01(e) of the Company Disclosure Schedule and (y) for guarantees of Guaranteed Obligations (as defined in the Subsidiary Guaranty as in effect as of the date hereof), (i) create, incur, issue, modify in any material respect, redeem, renew, syndicate or refinance any long-term indebtedness Indebtedness for money borrowed in excess of $1,000,000 (excluding (A) any letters of credit issued in the ordinary course of business and draws upon existing credit facilities (other than not to exceed $5,000,000 in the ordinary course of business and consistent with aggregate after the Company’s approved 2016 budget) and (B) such indebtedness, if any, as may be necessary to permit the Company to pay the Special Dividend, provided, that prior to incurring any indebtedness described in clause (B) date hereof, the Company will request that Parent provide a loan to fund the Special Dividend and, provided, further, that the Company shall consult with Parent prior to incurring any such indebtedness if Parent does not comply with the Company’s request that it provide a loan to fund the Special Dividend), (ii) guarantee any indebtedness assume, guarantee, endorse or otherwise become liable or responsible (other than indebtedness directly or contingently) for Indebtedness for borrowed money in excess of a Company Subsidiary existing on the date hereof or permitted under clause (i) of this Section 5.1(e))$1,000,000, (iii) enter into any swap or hedging transaction or other derivative agreements other than in respect of indebtedness permitted under clause (i) of this Section 5.1(e)agreement, or (iv) make any loans, capital contributions to, investments in or advances in excess of $1,000,000 in the aggregate to any Person (other than the Company and or any wholly-owned Subsidiary of the Company) other than in the ordinary course of business consistent with past practiceCompany Subsidiary);
(f) acquire any Personchange its fiscal year or, assets or businesses with a value or purchase price in the aggregate in excess of $500,000, other than acquisitions of investments held in investment accounts of Company Insurance Subsidiaries in accordance with the Company’s investment guidelines;
(g) except as may be required by changes in GAAP applicable Law or SAPGAAP, change any method, practice or principle of accountingfinancial accounting or financial reporting;
(hg) enter into except as set forth on Section 5.01(g) of the Company Disclosure Schedule or as required under applicable Law or the terms of any employment agreement withBenefit Plan, (i) materially increase the compensation or benefits of, or make any loans to, any current or former directors of the Company or any Company Subsidiary, Key Employees or other individual service providers who are not employees of the Company or any Company Subsidiary, (ii) grant, provide, or increase any bonus, severance, change of control or retention payments or benefits to any current or former directors of the compensation ofCompany or any Company Subsidiary, Key Employees or other individual service providers who are not employees of the Company or any officerCompany Subsidiary, directoror grant, consultant issue, or employee modify any equity or equity-based awards to any current or former directors of the Company or any Company Subsidiary, Key Employees or other individual service providers who are not employees of the Company or any Company Subsidiary that may be settled in any capital stock or other equity interests or securities of the Company or any Company Subsidiaries, (including entering iii) establish, adopt, or enter into any new collective bargaining, employment, bonus, pension, other retirement, deferred compensation, equity compensation, change in control, severance, change of control, termination, reduction-in-force or consulting agreement retention or other employee benefits compensation or benefit agreement, plan or arrangement for the benefit of any current or agreement pursuant to which such person has the right to any form former directors of compensation from the Company or such any Company Subsidiary), Key Employees or other individual service providers who are not employees of the Company or any Company Subsidiary, (iv) materially amend or materially modify any existing Benefit Plan, (v) accelerate the payment of compensation or benefits to any Company Employee or non-employee director, (vi) hire any new executive officer of the Company or promote or terminate the employment service (other than for cause) of any Key Employee, or otherwise amend, modify (vii) renew or restate in enter into any material respect modification of any existing agreements with labor agreement or implement or announce any such person material reduction in labor force or use its discretion to amend, modify or restate any Benefit Plan or accelerate the vesting or any payment under any Benefit Planmass lay-offs;
(ih) settle, otherwise compromise or enter into any consent, decree, injunction or similar restraint of or form of equitable relief in settlement of, or fail to defend, any Action other than such actions (A) in the ordinary course of business, consistent with past practice and where the amounts paid or to be paid with respect to all Actions are in an amount less than $5 million in the aggregate (net of amounts covered by insurance or indemnification agreements with third parties), (B) that do not involve the admission of wrongdoing by the Company or any of the Company Subsidiaries and (C) that do not impose any restrictions on the business of the Company, any of the Company Subsidiaries, Parent, the Surviving Corporation or any of their respective Affiliates following the Effective Time;
(i) any Action where the amount at issue is in excess of $500,000 or (ii) any Action relating to the Merger or the transactions contemplated by this Agreement;
(j) transfer, market, sell, lease, license, subject to a Lienmortgage, pledge or otherwise surrender, relinquish encumber, relinquish, abandon or dispose of any tangible or intangible assets, property (including real property) or rights (including capital stock of a Company Subsidiary) with a consideration or fair market value or purchase price in the aggregate in excess of $500,0001 million individually or $10 million in the aggregate, other than sales of investments held to the Company or a wholly owned Company Subsidiary;
(j) except as otherwise set forth in investment accounts of Company Insurance Subsidiaries this Agreement or, with respect to clause (i) only, renewals, extensions or amendments in the ordinary course of business consistent with past practice, (i) cancel, terminate, extend, renew or amend any Material Contract, (ii) waive, release or assign, in any respect, any rights or obligations under any Material Contract or (iii) enter into any Contract which would have been a Material Contract if entered into prior to the date hereof, except, in the case of clauses (i) and (ii);
(k) enter intomake, terminate, modify, release rescind or relinquish change any material rights Tax election, file any material amended Tax Return, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or claims underany similar provision of state, local or foreign Tax Law) with respect to a material amount of Taxes, settle or compromise any material Tax claim or assessment with any Governmental Entity, surrender any right to claim a material refund of Taxes or other offset or reduction in liability of a material amount of Taxes, request any material Tax ruling, change an annual Tax accounting period or adopt or change any material method of Tax accounting, or grant (other than with respect to a Tax matter described on Section 3.17 of the Company Disclosure Schedule or pursuant to an extension of time to file a Tax Return) consent to any consents under extension or amend waiver of the limitation period applicable to any Material Contract material Tax claim or assessment relating to the Company or any Company Subsidiary;
(l) transfer, sell, assign, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any Company IP, other than in the ordinary course of business consistent with past practice;
(l) materially change any underwriting, claim handling, loss control, investment, reserving, actuarial or financial reporting methods, principles, policies or practices of the Company or any Company Subsidiary, except for any such change required by a change in GAAP or SAP;
(m) reduce or strengthen any reserves, provisions for losses and other liability amounts in respect of insurance Contracts and assumed reinsurance Contracts, except (i) to the extent required by SAP (disregarding any changes to SAP that are not yet required to be implemented) or GAAP, as applicable or (ii) as a result of loss or exposure payments to other parties in accordance with the terms of insurance Contracts and assumed reinsurance Contracts;
(n) terminate, cancel, amend or modify in any material respect any material insurance or reinsurance policies maintained by it covering the Company or any Company Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance or reinsurance coverage, other than in the case of reinsurance policies in the ordinary course of business;
(o) make, rescind or change any express or deemed material election concerning Taxes or Tax Returns, file any material amended Tax Return, enter into any material closing agreement with respect to Taxes, settle any material Tax claim or assessment or surrender any right to claim a material refund of Taxes or obtain any Tax ruling;
(p) abandon, dedicate to the public, convey title or grant licenses under (other than in the ordinary course of business consistent with past practice) any material Company IP;
(q) adopt a plan or of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary;
(n) enter into, waive, or amend, in a manner adverse to the Company or any Company Subsidiary, any Related Party Agreement;
(o) authorize, or enter into any commitment for, any capital expenditures with respect to tangible property or real property, other than any capital expenditure (x) that has already been approved by the Company Board as of the date of this Agreement or (y) made in the ordinary course of business consistent with past practice provided that the aggregate amount of all such capital expenditures made pursuant to this clause (y) shall not exceed $10 million in the aggregate;
(i) enter into any new line of business other than the lines of business in which the Company and the Company Subsidiaries are currently engaged as of the date of this Agreement or (ii) establish any new Subsidiary or joint venture;
(q) (i) with respect to any Owned Real Property, enter into any agreement regarding the sale or, except for agreements that do not have a term which exceeds 6 months (provided that in no event may the term of such agreement continue beyond the Closing Date) or have a value in excess of $1 million in the aggregate, use or occupancy thereof (including leases, licenses, easements, option agreements, rights of refusal or similar agreements) or (ii) with respect to any Leased Real Property, enter into any agreement regarding the use or occupancy thereof (including subleases or license agreements) which have a term which exceeds 6 months (provided that in no event may the term of such agreement continue beyond the Closing Date) or have a value in excess of $1 million in the aggregate, or modify or amend any Company Leases;
(r) take any actions or omit to take any actions that would or would be reasonably be expected to (i) result in any of the conditions set forth in ARTICLE VI not being satisfied or (ii) materially impair or delay the ability of the Parties to consummate the transactions contemplated hereby in accordance with the terms hereof; or
(rs) enter into any agreement or arrangement to, or the making of make any commitment to, take any of the actions prohibited by this Section 5.15.01.
Appears in 1 contract
Certain Actions Pending Merger. Except as in response to or related to any Contagion Event or any change in applicable Law or policy as a result of or related to any Contagion Event, as required by applicable Law or Judgment, as set forth in Section 6.01 of the Company Disclosure Schedule, as expressly contemplated by this AgreementAgreement or with the prior written consent of Parent (not to be unreasonably withheld or delayed), the Company covenants and agrees as to itself and the Company Subsidiaries that, after the date of this Agreement and prior to the Effective Time, (x) the Company shall use reasonable best efforts to conduct the business of it and the Company Subsidiaries shall be conducted in all material respects in the ordinary and usual course consistent with past practice andpractice, (y) to the extent consistent therewithwith clause (x), the Company and Company Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, policyholders, contractholders, beneficiaries, customers, reinsurers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of the foregoing, except as required by applicable Law, as set forth in Section 5.1 of the Company Disclosure Schedule, or as expressly contemplated by this Agreement, the Company covenants agents and agrees as to itself and the Company Subsidiaries that, after the date of this Agreement and prior to the Effective Time, (z) the Company shall not, and shall cause the Company Subsidiaries not to, without to (it being understood that no act or omission by the prior written consent Company or any of Parent (in the cases of clauses (g), (h), (i) (its Subsidiaries with respect to litigation brought in the ordinary course related to claims on insurance policies underwritten the Company and its Affiliates), matters specifically addressed by any provision of this clause (k), (l), (m), (nz) and (p) not shall be deemed to be unreasonably withheld a breach of clause (x) or delayed(y)):
(a) (i) adjust, split, combine or reclassify any of its capital stock or other equity interestsinterests or issue or propose or authorize the issuance of any other securities (including Company RSAs, Company Stock Options, options, warrants or any similar security exercisable for, or convertible into, such other security) in respect of, in lieu of, or in substitution for, shares of its capital stock, (ii) set any record dates or payment dates for the payment of any dividends or distributions on its capital stock, or make, declare, set aside or pay any dividends on or make any other distribution in respect of any of its capital stock, except, in each case, (A) any such dividends or distributions from any Company Subsidiary to the Company or any other Company Subsidiary, (B) that the Company shall be entitled to pay, and shall pay, regular than quarterly dividends on the Common Shares not to exceed $0.14 0.52 per Common Share per quarter, as of the specified quarter with record dates and on the payment dates as set forth on in Section 5.1(a6.01(a) of the Company Disclosure Schedule (and the Company and Purchasers agree that, unless the Special Committee shall otherwise determine, the Company shall (and shall cause the Company Board to) effectuate on each such dividenddate a quarterly dividend of $0.52 per share, a “Quarterly Dividend”except to the extent that the record date specified in Section 6.01(a) and (C) for such dividend would fall on or after the Special DividendClosing Date), or (iii) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company or the Company Subsidiaries, or any other equity interest or any rights, warrants or options to acquire any such shares or interests, except pursuant to the forfeiture provisions of Company Equity Awards or the withholding Tax obligations upon exercise, vesting and settlement, as applicable, of such Company Equity Awards outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Company Equity Plans as in effect on the date of this Agreement;
(b) issue, grant, deliver, pledge, encumber, sell or purchase any shares of its capital stock or other equity interests, or rights, warrants or options to acquire, or security convertible or exchangeable into any such shares of capital stock or other equity interests, except upon exercise, vesting and settlement, as applicable, of Company Equity Awards outstanding as of the date of this Agreement, in accordance with their terms and, as applicable, the Company Equity Plans as in effect on the date of this Agreement;
(c) amend (by merger, consolidation or otherwise) its articles of incorporation, code of regulations bylaws or other organizational documents in any mannermanner or adopt or implement any shareholder rights plan or similar arrangement;
(d) purchase an equity interest in, or a portion of the assets of, any Person or any division or business thereof, if the aggregate amount of the consideration paid or transferred by the Company and the Company Subsidiaries in connection with all such transactions would exceed $3,000,000, or merge or consolidate with any other Person, or acquire any assets or capital stock of any other Personin each case, other than (i) any such action solely between or among the Company and the Company Subsidiaries or (ii) acquisitions of assets investments held in any investment account of a Company Insurance Subsidiary in accordance with the ordinary course investment policies and guidelines of business consistent with past practicethe Company or such Company Insurance Subsidiary, as applicable;
(e) (i) create, incur, issue, modify in any material respectmodify, redeem, renew, syndicate or refinance any long-term indebtedness for money borrowed (excluding (A) any letters of credit issued in the ordinary course of business and draws upon existing credit facilities (other than in the ordinary course of business and consistent with the Company’s approved 2016 budget) and (B) such indebtedness, if any, as may be necessary to permit the Company to pay the Special Dividend, provided, that prior to incurring any indebtedness described in clause (B) hereof, the Company will request that Parent provide a loan to fund the Special Dividend and, provided, further, that the Company shall consult with Parent prior to incurring any such indebtedness if Parent does not comply with the Company’s request that it provide a loan to fund the Special Dividendfacilities), (ii) guarantee any indebtedness (other than indebtedness of a Company Subsidiary existing on the date hereof or permitted under clause (i) of this Section 5.1(e))indebtedness, (iii) enter into any swap or hedging transaction or other derivative agreements other than in respect of indebtedness permitted under clause (i) of this Section 5.1(e), or (iv) make any loans, capital contributions to, investments in or advances to any Person (other than the Company and any wholly-owned Subsidiary of the Company) ), in each case other than in the ordinary course of business consistent with past practice;
(f) acquire any Person, assets or businesses with a value or purchase price in the aggregate in excess of $500,000, other than acquisitions of investments held in investment accounts of Company Insurance Subsidiaries in accordance with the Company’s investment guidelines;
(g) except as may be required by changes in GAAP or SAP, change any method, practice or principle of accounting, other than insofar as may be required by a concurrent change in GAAP or SAP;
(g) except as required by the terms of a Benefit Plan as in effect on the date hereof and listed on Section 4.20(a) of the Company Disclosure Schedule, (i) adopt, enter into, terminate or amend any Benefit Plan (or any arrangement that would be a Benefit Plan if in effect on the date hereof), other than in connection with routine, immaterial or ministerial amendments to health and welfare plans or incentive plans that do not increase benefits or result in an increase in administrative costs, (ii) increase the compensation or benefits of, or pay any bonus to, any executive officer of the Company or any of its Subsidiaries, (iii) grant any change in control, retention, severance or termination pay to, or grant any equity or equity-based awards to, or accelerate the vesting or payment of any such awards held by, any executive officer of the Company or its Subsidiaries, (iv) fund any payments or benefits that are payable or to be provided under any Benefit Plan (through a grantor trust or otherwise), (v) amend the funding obligation or contribution rate of any Benefit Plan, except as may be required by GAAP or (vi) take any action to implement any broad-based compensation or benefit reductions in respect of any employees of the Company or its Subsidiaries;
(h) enter into any employment agreement withcommence, or increase the compensation of, any officer, director, consultant or employee of the Company or any Company Subsidiary (including entering into any bonus, severance, change of control, termination, reduction-in-force or consulting agreement or other employee benefits arrangement or agreement pursuant to which such person has the right to any form of compensation from the Company or such Company Subsidiary), or otherwise amend, modify or restate in any material respect any existing agreements with any such person or use its discretion to amend, modify or restate any Benefit Plan or accelerate the vesting or any payment under any Benefit Plan;
(i) settle, otherwise compromise or enter into any consent, decree, injunction or similar restraint of form of equitable relief in settlement of (i) any Action where the amount at issue is in excess of $500,000 3,000,000 or (ii) any Action brought by any shareholder of the Company or any other Person against the Company or its director or officers relating to the Merger or the transactions contemplated by this Agreement; provided, that, for the avoidance of doubt, the this clause (h) does not apply to any action to enforce the rights of the Company under this Agreement or the Rollover Agreement;
(ji) sell, lease, license, subject to a LienLien (except Permitted Liens), or otherwise surrender, relinquish or dispose of any assets, property or rights (including capital stock of a Company Subsidiary) with a value or purchase price in the aggregate in excess of $500,0001,000,000, other than sales of investments held in investment accounts of Company Insurance Subsidiaries in accordance with the ordinary course investment policies and guidelines (in each case, as in effect on the date of business consistent with past practicethis Agreement) of the Company or such Company Insurance Subsidiary, as applicable;
(kj) enter into, terminate, modify, release or relinquish any material rights or claims under, or grant any consents under or amend any Material Contract other than in the ordinary course of business consistent with past practice;
(lk) materially change any of its underwriting, claim claims, claims handling, loss controlrisk retention, reinsurance, investment, reserving, reserving or actuarial or financial reporting methods, principles, policies or practices of the Company or any Company Subsidiary, except for any such change other than insofar as may be required by a concurrent change in GAAP or SAP;
(m) reduce or strengthen any reserves, provisions for losses and other liability amounts in respect of insurance Contracts and assumed reinsurance Contracts, except (i) to the extent required by SAP (disregarding any changes to SAP that are not yet required to be implemented) or GAAP, as applicable or (ii) as a result of loss or exposure payments to other parties in accordance with the terms of insurance Contracts and assumed reinsurance Contracts;
(nl) terminate, cancel, amend or modify in any material respect any material insurance or reinsurance policies maintained by it covering the Company or any Company Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance or reinsurance coverage, other than in the case of reinsurance policies in the ordinary course of business;
(om) make, rescind or change any express or deemed material election concerning Taxes or Tax Returns, file any material amended Tax Return, enter into any material closing agreement with respect to Taxes, settle or compromise any material Tax claim audit, claim, assessment, or assessment or other proceeding, surrender any right to claim a material refund of Taxes or Taxes, obtain any Tax ruling, agree to an extension of the statute of limitations periods for the assessment or collection of any material Tax, or cause or permit any other Person to take any of the foregoing actions with respect to the Company or any of the Company Subsidiaries;
(pn) abandon, dedicate to the public, convey title or grant licenses under (other than in the ordinary course of business consistent with past practice) any material Company IP;
(qo) adopt a any plan or of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary;
(p) enter into any new lines of business which the Company or any of the Company Subsidiaries does not operate as of the date of this Agreement; or
(rq) enter into any agreement to, or the making of any commitment to, take any of the actions prohibited by this Section 5.16.01.
Appears in 1 contract
