Certain Covenants and Agreements. The Company hereby covenants and agrees that: (a) without the prior written consent of the Trustee, it shall not vote or consent or take any other action to: (i) amend or terminate any partnership agreement, limited liability company agreement, certificate of incorporation, by-laws or other organizational documents of any Issuer in any way that changes the rights of the Company with respect to any Pledged Equity Interests or adversely affects the validity, perfection or priority of the Trustee's security interest therein, (ii) permit any issuer of any Pledged Equity Interest to issue to any Person other than the Company any additional stock, partnership interests, limited liability company interests or other equity interests of any nature or to issue securities convertible into or granting the right of purchase or exchange for any stock or other equity interest of any nature of such Issuer, (iii) other than as permitted under the Indenture or this Agreement, permit any Issuer to dispose of all or a material portion of its assets, (iv) waive any default under or breach of any terms, in each case which would adversely affect the validity, perfection or priority of the Trustee's security interest hereunder, of any organizational document relating to the issuer of any Pledged Equity Interest or (v) cause any Issuer of any Pledged Partnership Interests or Pledged LLC Interests which are not securities (for purposes of the Uniform Commercial Code) on the date hereof to elect or otherwise take any action to cause such Pledged Partnership Interests or Pledged LLC Interests to be treated as securities for purposes of the Uniform Commercial Code; (b) without the prior written consent of the Trustee, it shall not permit any Issuer to merge or consolidate unless all the outstanding capital stock or other equity interests of the surviving or resulting corporation, limited liability company, partnership or other entity is, upon such merger or consolidation, pledged hereunder and no cash, securities or other property is distributed in respect of the outstanding equity interests of any other constituent Person; (c) in the event that it acquires rights in any Pledged Equity Interests after the date hereof, it shall deliver to the Trustee a completed Pledge Supplement with respect to such Pledged Equity Interests; notwithstanding the foregoing, except in the case of a transaction contemplated by Section 4(k) hereof, the security interest of the Trustee shall attach to all Pledged Equity Interests immediately upon the Company's acquisition of rights therein and shall not be affected by the failure of the Company to deliver any such supplement; (d) except as provided in the next sentence, in the event that the Company receives any dividends, interest or distributions on any Pledged Equity Interests, or any securities or other property upon the merger, consolidation, liquidation or dissolution of any Issuer, then (a) such dividends, interest or distributions and securities or other property shall be included in the definition of Collateral without, except in the case of a transaction contemplated by Section 4(k) hereof, further action and (b) the Company shall immediately take all steps, if any, necessary or advisable to ensure the validity, perfection, priority and, if applicable, control of the Trustee over the same, and pending any such action the Company shall be deemed to hold such dividends, interest, distributions, securities or other property in trust for the benefit of the Trustee and shall segregate the same from all other property of the Company; notwithstanding the foregoing, so long as no Event of Default shall have occurred and be continuing, the Company shall have the right to retain and utilize in its business all ordinary cash dividends and distributions paid in the normal course of the business of the applicable Issuer; (e) it shall comply with all of its obligations under any partnership agreement or limited liability company agreement relating to Pledged Partnership Interests or Pledged LLC Interests and shall enforce all of its material rights with respect to any such Interests; (f) it will defend the Pledged Equity Interests against the claims and demands of all Persons, other than holders of Permitted Liens herein; (g) without the prior written consent of the Trustee, it shall not withdraw as a partner or member of any Issuer if such withdrawal would materially and adversely affect the value of the Collateral; (h) it shall cause each Issuer to consent to the grant by the Company to the Trustee of a security interest in the Pledged Equity Interests issued by such Issuer and, without limiting the foregoing, to consent to the transfer of any such Pledged Partnership Interest or Pledged LLC Interest to the Trustee or its nominee following the occurrence and continuance of an Event of Default and to the substitution of the Trustee or its nominee as a partner in any partnership or as a member in any limited liability company with all the rights and powers related thereto; (i) so long as no Event of Default shall have occurred and be continuing: (i) except as otherwise provided in subsection (a) or (b) of this Section 4 or Section 8.01(a) hereof, the Company shall be entitled to exercise or refrain from exercising any and all voting and other consensual rights pertaining to the Pledged Equity Interests or any part thereof for any purpose not violating the terms of this Agreement or the Indenture; provided that the Company shall exercise or refrain from exercising any such right if the Trustee (which may act in its reasonable judgment or at the direction of the Holders of not less than a majority in aggregate principal amount of the then outstanding Notes) shall have notified the Company that such action would have a material adverse effect on the value of the Pledged Equity Interests or any part thereof; and provided further that the Company shall give the Trustee at least five (5) Business Days' prior written notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right; it being understood, however, that neither the voting by the Company of any Pledged Stock for, or the Company's consent to, the election of directors (or similar governing body) at a regularly scheduled annual or other meeting of stockholders or with respect to incidental matters at any such meeting, nor the Company's consent to or approval of any action otherwise permitted under this Agreement or the Indenture, shall be deemed to violate the terms of this Agreement within the meaning of this Section 4(i), and no notice of any such voting or consent need be given to the Trustee; and (ii) the Trustee shall promptly execute and deliver (or cause to be executed and delivered) to the Company all proxies, and other instruments as the Company may from time to time reasonably request for the purpose of enabling the Company to exercise voting and other consensual rights when and to the extent to which it is entitled to exercise such rights pursuant to clause (i) above; (j) upon the occurrence and during the continuance of an Event of Default: (i) all rights of the Company to exercise or refrain from exercising the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease, and all such rights shall thereupon become vested in the Trustee, which shall thereupon during any such period have the sole right to exercise such voting and other consensual rights; and (ii) in order to permit the Trustee to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto, the Company shall promptly execute and deliver (or cause to be executed and delivered) to the Trustee all proxies, orders and other instruments as the Trustee may from time to time reasonably request for any such purpose; and (k) if the Company shall acquire Pledged Equity Interests referred to in clause (ii) of the definition of the term "Issuers" contained in Section 1 hereof, it shall, if it does not own directly all of the issued and outstanding Voting Stock of the Issuer of such Pledged Equity Interests, cause the Subsidiaries of the Company that own, directly or indirectly, such Voting Stock to become parties to this Agreement or a supplement hereto and to execute such other documents and instruments, and take such action, as shall be necessary to effect the pledge of and security interest in such Pledged Equity Interests provided for in this Agreement; and this Agreement, as so supplemented, may provide for changes hereto necessary if any such Pledged Equity Interests represent less than all of the outstanding Voting Stock of the Issuer.
Appears in 3 contracts
Samples: Indenture (Pg&e National Energy Group Inc), Indenture (Pg&e National Energy Group Inc), Indenture (Pg&e National Energy Group Inc)
Certain Covenants and Agreements. The Company hereby covenants and agrees that:
(a) without the prior written consent of the Trustee, it shall not vote or consent or take any other action to: (i) amend or terminate any partnership agreement, limited liability company agreement, certificate of incorporation, by-laws or other organizational constitutive documents of any Issuer in any way that changes the rights of the Company with respect to any Pledged Equity Interests or adversely affects the validity, perfection or priority of the Trustee's security interest thereintherein and, without limiting the foregoing, no such amendment or termination shall be made unless the Company provides at least 30 days' prior written notice of such proposed amendment or termination to the Trustee, (ii) permit any issuer of any Pledged Equity Interest to issue to any Person other than the Company any additional stock, partnership interests, limited liability company interests or other equity interests of any nature or to issue securities convertible into or granting the right of purchase or exchange for any stock or other equity interest of any nature of such Issuer, (iii) other than as permitted under the Indenture or this Agreement, permit any Issuer to dispose of all or a material portion of its assets, assets or (iv) waive any default under or breach of any terms, in each case which would adversely affect the validity, perfection or priority of the Trustee's security interest hereunder, of any organizational constitutive document relating to the issuer of any Pledged Equity Interest or (v) cause any Issuer of any Pledged Partnership Interests or Pledged LLC Interests which are not securities (for purposes of the Uniform Commercial Code) on the date hereof to elect or otherwise take any action to cause such Pledged Partnership Interests or Pledged LLC Interests to be treated as securities for purposes of the Uniform Commercial CodeInterest;
(b) without the prior written consent of the Trustee, it shall not permit any Issuer to merge or consolidate unless (i) at least 10 days' prior written notice thereof is provided to the Trustee and (ii) all the outstanding capital stock or other equity interests of the surviving or resulting corporation, limited liability company, partnership or other entity is, upon such merger or consolidation, pledged hereunder and no cash, securities or other property is distributed in respect of the outstanding equity interests of any other constituent Person;
(c) in the event that it acquires rights in any Pledged Equity Interests after the date hereof, it shall (A) cause each such Pledged Equity Interest to be represented by a Security Certificate (as defined in Section 8-102(a)(16) of the UCC) in registered form (the transfer of which may be registered upon books maintained by the Issuer thereof), and such Security Certificate shall by its terms (as evidenced by a legend attached to such Security Certificate and, in the case of an Issuer that is a partnership or a limited liability company, in the organizational documents pursuant to which such Equity Interest is issued) expressly provide that it is a security governed by Article 8 of the UCC, (B) deliver to the Trustee such Security Certificates and file appropriate financing statements that are necessary to perfect the security interest granted in such Pledged Equity Interests and (C) deliver to the Trustee a completed Pledge Supplement with respect to such Pledged Equity Interests; notwithstanding the foregoing, except in the case of a transaction contemplated by Section 4(k) hereof, the security interest of the Trustee shall attach to all Pledged Equity Interests Interest immediately upon the Company's acquisition of rights therein and shall not be affected by the failure of the Company to deliver any such supplement;
(d) except as provided in the next sentence, in the event that the Company receives any dividends, interest or distributions on any Pledged Equity Interests, or any securities or other property upon the merger, consolidation, liquidation or dissolution of any Issuer, then (a) such dividends, interest or distributions and securities or other property shall be included in the definition of Collateral without, except in the case of a transaction contemplated by Section 4(k) hereof, further action and (b) the Company shall immediately take all steps, if any, necessary or advisable to ensure the validity, perfection, priority and, if applicable, control of the Trustee over the same, and pending any such action the Company shall be deemed to hold such dividends, interest, distributions, securities or other property in trust for the benefit of the Trustee and shall segregate the same from all other property of the Company; notwithstanding the foregoing, (1) so long as no Event of Default shall have occurred and be continuing, the Company shall have the right to retain and utilize in its business all ordinary cash dividends and distributions paid in the normal course of the business of the applicable Issuer;; and (2) the Company shall have the right to apply, or make available for application, all dividends or distributions received by the Company which constitute Net Proceeds of a Principal Asset Sale to the payments required by Section 3.09 of the Indenture in the priority set forth therein.
(e) it shall comply with all of its obligations under any partnership agreement or limited liability company agreement relating to Pledged Partnership Interests or Pledged LLC Interests and shall enforce all of its material rights with respect to any such Interests;
(f) it will defend the Pledged Equity Interests against the claims and demands of all Persons, Persons (other than holders of Permitted Liens) claiming an interest in any of the Pledged Equity Interests; except for Permitted Liens, it shall discharge or cause to be discharged all Liens hereinon any or all of the Pledged Equity Interests and shall not permit additional Liens to be incurred on the Pledged Equity Interests;
(g) without the prior written consent of the Trustee, it shall not withdraw as a partner or member of any Issuer if such withdrawal would materially and adversely affect the value of the Collateral;
(h) it shall cause each Issuer to consent to the grant by the Company to the Trustee of a security interest in the Pledged Equity Interests issued by such Issuer and, without limiting the foregoing, to consent to the transfer of any such Pledged Partnership Interest or Pledged LLC Interest to the Trustee or its nominee following the occurrence and continuance of an Event of Default and to the substitution of the Trustee or its nominee as a partner in any partnership or as a member in any limited liability company with all the rights and powers related thereto;
(i) so long as no Event of Default shall have occurred and be continuing:
(i) except as otherwise provided in subsection (a) or (b) of this Section 4 or Section 8.01(a) hereof, the Company shall be entitled to exercise or refrain from exercising any and all voting and other consensual rights pertaining to the Pledged Equity Interests or any part thereof for any purpose not violating the terms of this Agreement or the Indenture; provided that the Company shall exercise or refrain from exercising any such right if the Trustee (which may act in its reasonable judgment or at the direction of the Holders of not less than a majority in aggregate principal amount of the then outstanding Notes) shall have notified the Company that such action would have a material adverse effect on the value of the Pledged Equity Interests or any part thereof; and provided further that the Company shall give the Trustee at least five (5) Business Days' prior written notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right; it being understood, however, that neither the voting by the Company of any Pledged Stock for, or the Company's consent to, the election of directors (or similar governing body) at a regularly scheduled annual or other meeting of stockholders or with respect to incidental matters at any such meeting, nor the Company's consent to or approval of any action otherwise permitted under this Agreement or the Indenture, shall be deemed to violate the terms of this Agreement within the meaning of this Section 4(i), and no notice of any such voting or consent need be given to the Trustee; and
(ii) the Trustee shall promptly execute and deliver (or cause to be executed and delivered) to the Company all proxies, and other instruments as the Company may from time to time reasonably request for the purpose of enabling the Company to exercise voting and other consensual rights when and to the extent to which it is entitled to exercise such rights pursuant to clause (i) above;
(j) upon the occurrence and during the continuance of an Event of Default:
(i) all rights of the Company to exercise or refrain from exercising the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease, and all such rights shall thereupon become vested in the Trustee, which shall thereupon during any such period have the sole right to exercise such voting and other consensual rights; and
(ii) in order to permit the Trustee to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto, the Company shall promptly execute and deliver (or cause to be executed and delivered) to the Trustee all proxies, orders and other instruments as the Trustee may from time to time reasonably request for any such purpose; and;
(k) if the Company shall acquire Pledged Equity Interests referred to in clause (ii) of the definition of the term "Issuers" contained in Section 1 hereof, it shall, if it does not own directly all of the issued and outstanding Voting Stock of the Issuer of such Pledged Equity Interests, cause the Subsidiaries of the Company that own, directly or indirectly, such Voting Stock to become parties to this Agreement or a supplement hereto and to execute such other documents and instruments, and take such action, as shall be necessary to effect the pledge of and security interest in such Pledged Equity Interests provided for in this Agreement; , and this Agreement, as so supplemented, may provide for changes hereto necessary if any such Pledged Equity Interests represent less than all of the outstanding Voting Stock of the Issuer;
(l) it shall not, without the prior written consent of the Trustee, execute or file in any public office or consent to the execution of or filing of any enforceable financing statement or statements covering any or all of the Pledged Equity Interests, except financing statements filed or to be filed in favor of the Trustee, the Tranche A Trustee as secured party or any agent or holder of obligations under any New Credit Facility;
(m) it shall give the Trustee prompt notice of any written claim relating to title to the Pledged Equity Interests of which it has actual knowledge; it shall deliver to Trustee a copy of each other written demand, notice or document received by it which could reasonably be expected to adversely affect the Trustee's interest in the Pledged Equity Interests promptly upon, but in any event within 5 Business Days after, its receipt thereof;
(n) it shall, promptly upon obtaining actual knowledge of any action, suit or proceeding at law or in equity by or before any governmental authority pending or threatened against it with respect to the Pledged Equity Interests, which could reasonably be expected to result in a material adverse effect on such Pledged Equity Interests, the Issuer thereof or the Company, the value of such Pledged Equity Interests or the rights and remedies of the Trustee hereunder, or upon becoming aware of any failure to comply with the terms and conditions of any governmental approval applicable to the Company or any Issuer which could reasonably be expected to result in a material adverse effect on the Pledged Equity Interests, the Issuer thereof or the Company, the value of such Pledged Equity Interests or the rights and remedies of the Trustee hereunder, furnish to the Trustee a notice of such event describing the same in reasonable detail and, together with such notice or as soon thereafter as possible, a description of the action that the Company has taken and proposes to take with respect thereto;
(o) it shall not (A) sell, assign, convey, transfer (by operation of law or otherwise) or otherwise dispose of, or consent to the sale, assignment, conveyance, transfer or other disposition of any Pledged Equity Interest, except as permitted by the Indenture or the Security Documents, or (B) create or suffer to exist any Lien upon or with respect to any Pledged Equity Interest or consent to the creation or existence of any Lien on the Pledged Equity Interest, except for the pledge, hypothecation and security interest created by this Agreement, the Tranche A Pledge Agreement and the other Security Documents or by any New Credit Facility; and
(p) it shall cause the Pledged Equity Interests to constitute at all times not less than the entire partnership, membership or other ownership interests of each Issuer, as applicable, and it shall not permit (i) any partnership, membership or other ownership interest of any Issuer to be deemed an investment company security (as defined in Section 8-103(b) of the UCC) or (ii) any Issuer to issue additional partnership, membership or other ownership interests at any time (whether or not certificated), except in any such case as contemplated by Section 4(k) of this Agreement.
Appears in 2 contracts
Samples: Indenture (Pg&e National Energy Group Inc), Indenture (Pg&e National Energy Group Inc)
Certain Covenants and Agreements. The Company hereby covenants and 6.1 Conduct of Business Prior to the Closing Date. Except as set forth on Schedule 6.1, Seller agrees that, between the date hereof and the Closing Date:
(a) without the Except as contemplated by this Agreement or permitted by prior written consent of Buyer, Seller shall operate the Trustee, it shall Business only in the Ordinary Course of Business consistent with Good Utility Practice and not vote or consent or take fail to make any other action to: (i) amend or terminate any partnership agreement, limited liability company agreement, certificate Transmission Capital Expenditures required in accordance with Good Utility Practice in the Ordinary Course of incorporation, by-laws or other organizational documents of any Issuer in any way that changes the rights of the Company with respect to any Pledged Equity Interests or adversely affects the validity, perfection or priority of the Trustee's security interest therein, (ii) permit any issuer of any Pledged Equity Interest to issue to any Person other than the Company any additional stock, partnership interests, limited liability company interests or other equity interests of any nature or to issue securities convertible into or granting the right of purchase or exchange for any stock or other equity interest of any nature of such Issuer, (iii) other than as permitted under the Indenture or this Agreement, permit any Issuer to dispose of all or a material portion of its assets, (iv) waive any default under or breach of any terms, in each case which would adversely affect the validity, perfection or priority of the Trustee's security interest hereunder, of any organizational document relating to the issuer of any Pledged Equity Interest or (v) cause any Issuer of any Pledged Partnership Interests or Pledged LLC Interests which are not securities (for purposes of the Uniform Commercial Code) on the date hereof to elect or otherwise take any action to cause such Pledged Partnership Interests or Pledged LLC Interests to be treated as securities for purposes of the Uniform Commercial Code;Business.
(b) without the prior written consent of the Trustee, it Seller shall not become a party to any contract or otherwise permit the Purchased Assets to become subject to any Issuer commitment to merge or consolidate unless all the outstanding capital stock or be included within any independent transmission company other equity interests of the surviving or resulting corporation, limited liability company, partnership or other entity is, upon such merger or consolidation, pledged hereunder and no cash, securities or other property is distributed in respect of the outstanding equity interests of any other constituent Person;than Buyer.
(c) in the event that it acquires rights in Seller shall discuss with Buyer any Pledged Equity Interests after the date hereof, it shall deliver material filing (or amendment thereto) to be made by Seller with any federal or state regulatory agency relating to the Trustee a completed Pledge Supplement with respect to such Pledged Equity Interests; notwithstanding Purchased Assets or the foregoing, except in the case of a transaction contemplated by Section 4(k) hereof, the security interest of the Trustee shall attach to all Pledged Equity Interests immediately upon the Company's acquisition of rights therein and shall not be affected by the failure of the Company to deliver any such supplement;Business.
(d) except as provided Seller shall not, without the consent of Buyer unless required by the ICC, the FERC, or other regulatory body or any regional transmission organization or independent system operator (in the next sentence, in the event that the Company receives latter case subject to Section 3.11):
(i) place any dividends, interest or distributions Encumbrance (other than a Permitted Encumbrance) on any Pledged Equity Interests, or any securities or other property upon the merger, consolidation, liquidation or dissolution of any Issuer, then (a) such dividends, interest or distributions and securities or other property shall be included in the definition of Collateral without, except in the case of a transaction contemplated by Section 4(k) hereof, further action and (b) the Company shall immediately take all steps, if any, necessary or advisable to ensure the validity, perfection, priority and, if applicable, control of the Trustee over the same, and pending any such action the Company shall be deemed to hold such dividends, interest, distributions, securities or other property in trust for the benefit of the Trustee and shall segregate the same from all other property of the Company; notwithstanding the foregoing, so long as no Event of Default shall have occurred and be continuing, the Company shall have the right to retain and utilize in its business all ordinary cash dividends and distributions paid in the normal course of the business of the applicable IssuerPurchased Assets;
(eii) it shall comply with all sell, transfer, license, lease to others or otherwise dispose of its obligations under any partnership agreement of the Purchased Assets (except for inventory sales or limited liability company agreement returns to vendors in the Ordinary Course of Business and items which are replaced by items of substantially similar usefulness) or cancel, waive, release or otherwise compromise any material claim or any material right of value relating to Pledged Partnership Interests or Pledged LLC Interests and shall enforce all of its material rights with respect to any such Intereststhe Purchased Assets;
(fiii) it will defend the Pledged Equity Interests against the claims and demands of all Personsinstitute any litigation, other than holders of Permitted Liens herein;
(g) without the prior written consent of the Trusteeaction or proceeding before any court, it shall not withdraw as a partner governmental body or member of any Issuer if such withdrawal would arbitration tribunal for which Buyer could be liable or which could otherwise materially and adversely affect the value of the CollateralBusiness;
(hiv) it shall cause each Issuer to consent to the grant by the Company to the Trustee of a security interest amend or terminate in the Pledged Equity Interests issued by such Issuer and, without limiting the foregoing, to consent to the transfer of any such Pledged Partnership Interest material respect or Pledged LLC Interest to the Trustee or its nominee following the occurrence and continuance of an Event of Default and to the substitution waive any material right under any of the Trustee or its nominee as a partner in any partnership or as a member in any limited liability company with all the rights and powers related theretoContracts;
(iv) so long as no Event acquire or agree to acquire any assets that are material, individually or in the aggregate, to be included in the Purchased Assets, except purchases of Default shall have occurred and be continuing:equipment or spare parts in the Ordinary Course of Business;
(ivi) except as otherwise provided in subsection (a) or (b) of this Section 4 or Section 8.01(a) hereof, the Company shall be entitled to exercise or refrain from exercising settle any and all voting and other consensual rights pertaining to the Pledged Equity Interests or any part thereof for any purpose not violating the terms of this Agreement or the Indenture; provided that the Company shall exercise or refrain from exercising any such right if the Trustee (which may act in its reasonable judgment or at the direction of the Holders of not less than a majority in aggregate principal amount of the then outstanding Notes) shall have notified the Company that such action would have a material adverse effect on the value of the Pledged Equity Interests or any part thereof; and provided further that the Company shall give the Trustee at least five (5) Business Days' prior written notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right; it being understood, however, that neither the voting by the Company of any Pledged Stock for, or the Company's consent to, the election of directors (or similar governing body) at a regularly scheduled annual or other meeting of stockholders or contingent liabilities with respect to incidental matters at any such meeting, nor the Company's consent to or approval of any action otherwise permitted under this Agreement or the Indenture, shall Purchased Assets for which Buyer could be deemed to violate the terms of this Agreement within the meaning of this Section 4(i), and no notice of any such voting or consent need be given to the Trusteeliable; andor
(iivii) the Trustee shall promptly execute and deliver (enter into any contract, agreement or cause to be executed and delivered) to the Company all proxiesunderstanding with PJM or any other RTO, and other instruments as the Company may from time to time reasonably request for the purpose of enabling the Company to exercise voting and other consensual rights when and to the extent to which it is entitled to exercise such rights pursuant to clause (i) above;
(j) upon the occurrence and during the continuance of an Event of Default:
(i) all rights of the Company to exercise or refrain from exercising the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease, and all such rights shall thereupon become vested in the Trusteewithout Buyer's consent, which shall thereupon during any such period have the sole right to exercise such voting and other consensual rights; and
(ii) in order to permit the Trustee to exercise the voting and other consensual rights which it may not be entitled to exercise pursuant hereto, the Company shall promptly execute and deliver (or cause to be executed and delivered) to the Trustee all proxies, orders and other instruments as the Trustee may from time to time reasonably request for any such purpose; and
(k) if the Company shall acquire Pledged Equity Interests referred to in clause (ii) of the definition of the term "Issuers" contained in Section 1 hereof, it shall, if it does not own directly all of the issued and outstanding Voting Stock of the Issuer of such Pledged Equity Interests, cause the Subsidiaries of the Company that own, directly or indirectly, such Voting Stock to become parties to this Agreement or a supplement hereto and to execute such other documents and instruments, and take such action, as shall be necessary to effect the pledge of and security interest in such Pledged Equity Interests provided for in this Agreement; and this Agreement, as so supplemented, may provide for changes hereto necessary if any such Pledged Equity Interests represent less than all of the outstanding Voting Stock of the Issuerunreasonably withheld.
Appears in 1 contract
Certain Covenants and Agreements. The Company hereby covenants and agrees that:
(a) without MatrixOne shall use its commercially reasonable efforts to cause the Registration Statement to become effective and remain effective as provided herein; provided that not less than five business days prior written consent to the filing of the TrusteeRegistration Statement or any related prospectus or any amendment or supplement thereto (including any document that would be incorporated therein by reference), it MatrixOne shall not vote or consent or take any other action to: (i) amend or terminate furnish to the Representative and any partnership agreementcounsel to the Representative, limited liability company agreementcopies of all such documents proposed to be filed, certificate which documents (other than those incorporated by reference) will be subject to the timely review of incorporation, by-laws or other organizational documents of any Issuer in any way that changes the rights of the Company with respect to any Pledged Equity Interests or adversely affects the validity, perfection or priority of the Trustee's security interest therein, such counsel and (ii) permit at the request of the Representative cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of counsel to the Representative, to conduct a reasonable investigation within the meaning of the Securities Act. MatrixOne shall not file the Registration Statement or any issuer of such prospectus or any Pledged Equity Interest amendments or supplements thereto to issue to any Person other than which the Company any additional stock, partnership interests, limited liability company interests or other equity interests of any nature or to issue securities convertible into or granting the right of purchase or exchange for any stock or other equity interest of any nature of such Issuer, (iii) other than as permitted under the Indenture or this Agreement, permit any Issuer to dispose of all or a material portion Representative shall reasonably object in writing within three business days of its assets, (iv) waive any default under or breach of any terms, in each case which would adversely affect the validity, perfection or priority of the Trustee's security interest hereunder, of any organizational document relating to the issuer of any Pledged Equity Interest or (v) cause any Issuer of any Pledged Partnership Interests or Pledged LLC Interests which are not securities (for purposes of the Uniform Commercial Code) on the date hereof to elect or otherwise take any action to cause such Pledged Partnership Interests or Pledged LLC Interests to be treated as securities for purposes of the Uniform Commercial Code;receipt thereof.
(b) without MatrixOne shall (i) prepare and file with the prior written consent Commission such amendments, including post-effective amendments, to the Registration Statement as may be necessary to keep the Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements as may be necessary in order to register for resale under the Securities Act all of the TrusteeRegistrable Securities; (ii) cause the related prospectus to be amended or supplemented by any required prospectus supplement, it shall not permit and as so supplemented or amended to be filed pursuant to Rule 424 (or any Issuer similar provisions then in force) promulgated under the Securities Act; (iii) respond promptly to merge any comments received from the Commission with respect to the Registration Statement or consolidate unless any amendment thereto and promptly provide the Representative true and complete copies of all correspondence from and to the outstanding capital stock or other equity interests Commission relating to the Registration Statement; and (iv) comply in all material respects with the provisions of the surviving Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by the Registration Statement during the applicable period in accordance with the intended methods of disposition by the Holders thereof set forth in the Registration Statement as so amended or resulting corporation, limited liability company, partnership or other entity is, upon in such merger or consolidation, pledged hereunder and no cash, securities or other property is distributed in respect of the outstanding equity interests of any other constituent Person;prospectus as so supplemented.
(c) MatrixOne shall notify the Representative promptly (i)(A) when a prospectus or any prospectus supplement or post-effective amendment to the Registration Statement is proposed to be filed, (B) when the Commission notifies MatrixOne whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement and (C) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to the Registration Statement or prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the initiation of any proceedings for that purpose; (iv) of the receipt by MatrixOne of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose; and (v) of the occurrence of any event that makes any statement made in the event that it acquires rights Registration Statement or prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any Pledged Equity Interests material respect or that requires any revisions to the Registration Statement, prospectus or other documents so that, in the case of the Registration Statement or the prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. MatrixOne shall furnish to counsel to the Representative, without charge, (i) a copy of any correspondence from the Commission or the Commission’s staff to MatrixOne or its representatives relating to any Registration Statement promptly after the date hereofsame is received and (ii) a copy of any written response to the correspondence received from the Commission promptly after the same is prepared and filed with the Commission.
(d) MatrixOne shall use its commercially reasonable efforts to avoid the issuance of, it or, if issued, obtain the withdrawal of, (i) any order suspending the effectiveness of the Registration Statement or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.
(e) MatrixOne shall furnish to the Representative, without charge, at least one conformed copy of each Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference, and all exhibits to the extent requested by the Representative (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission.
(f) MatrixOne shall promptly deliver to the Trustee Representative, without charge, as many copies of the Registration Statement, prospectus or prospectuses (including each form of prospectus) and each amendment or supplement thereto as the Representative may reasonably request for use by the selling Holders; and MatrixOne hereby consents to the use of such prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such prospectus and any amendment or supplement thereto.
(g) MatrixOne shall prior to any public offering of Registrable Securities, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders and their counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by a completed Pledge Supplement Registration Statement; provided that MatrixOne shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or subject MatrixOne to any material tax in any such jurisdiction where it is not then so subject.
(h) MatrixOne shall cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold pursuant to a Registration Statement and to enable such Registrable Securities to be in such denominations and registered in such names as the Holders may request at least two business days prior to any sale of Registrable Securities.
(i) MatrixOne shall upon the occurrence of any event contemplated by Section 2.3(c)(v), as promptly as possible, prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither the Registration Statement nor such prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(j) MatrixOne shall use its commercially reasonable efforts to cause all Registrable Securities relating to such Registration Statement to be listed on the Nasdaq.
(k) MatrixOne shall use its commercially reasonable efforts to require each selling Holder to furnish to MatrixOne information regarding such Holder and the distribution of such Registrable Securities as is required by law to be disclosed in the Registration Statement, and MatrixOne may exclude from such registration the Registrable Securities of any such Holder who fails to furnish such information within a reasonable time prior to the filing of each Registration Statement, supplemented prospectus and/or amended Registration Statement.
(l) If there is material non-public information regarding MatrixOne or any of its subsidiaries (including, without limitation, regarding a significant business opportunity, acquisition, disposition, merger, consolidation, tender offer, corporate reorganization, material financing or other similar transaction or other corporate development) that MatrixOne’s Board of Directors determines in good faith (i) would be required to be disclosed under the Registration Statement and (ii) would not be in MatrixOne’s best interest to disclose then, not more than two times during the Effectiveness Period, MatrixOne may by notice to the Representative suspend effectiveness of a Registration Statement and suspend the sale of Registrable Securities under a Registration Statement until the earlier of (A) such information is disclosed, (B) such information ceases to be material or (C) 30 business days from the date of such notice.
(m) Within two (2) business days after the Registration Statement which includes the Registrable Securities is ordered effective by the Commission, MatrixOne shall deliver, and shall cause legal counsel for MatrixOne to deliver, to the transfer agent for such Registrable Securities (with copies to the Representative) confirmation that the Registration Statement has been declared effective by the Commission.
(n) Upon receipt of a notice from MatrixOne of the occurrence of any event of the kind described in Section 2.3(c)(ii), 2.3(c)(iii), 2.3(c)(iv), 2.3(c)(v) or 2.3(l), the Representative shall cause each Holder to, and each Holder shall, forthwith discontinue disposition of such Registrable Securities under the Registration Statement until MatrixOne notifies the Representative that Holders may resume disposition efforts under the Registration Statement and the Holders have received any amendment or supplement to the Registration Statement, if any, required as a result of such event.
(o) The Representative shall provide MatrixOne with the names of all selling Holders selling pursuant to the Registration Statement along with all other information necessary to complete the Registration Statement with respect to such Pledged Equity Interests; notwithstanding Holders, which information shall be provided a reasonable amount of time prior to the foregoing, except in the case of a transaction contemplated by Section 4(k) hereof, the security interest effectiveness of the Trustee shall attach to all Pledged Equity Interests immediately upon the Company's acquisition of rights therein and shall not be affected by the failure of the Company to deliver any such supplement;
(d) except as provided in the next sentence, in the event that the Company receives any dividends, interest or distributions on any Pledged Equity Interests, or any securities or other property upon the merger, consolidation, liquidation or dissolution of any Issuer, then (a) such dividends, interest or distributions and securities or other property shall be included in the definition of Collateral without, except in the case of a transaction contemplated by Section 4(k) hereof, further action and (b) the Company shall immediately take all steps, if any, necessary or advisable to ensure the validity, perfection, priority and, if applicable, control of the Trustee over the same, and pending any such action the Company shall be deemed to hold such dividends, interest, distributions, securities or other property in trust for the benefit of the Trustee and shall segregate the same from all other property of the Company; notwithstanding the foregoing, so long as no Event of Default shall have occurred and be continuing, the Company shall have the right to retain and utilize in its business all ordinary cash dividends and distributions paid in the normal course of the business of the applicable Issuer;
(e) it shall comply with all of its obligations under any partnership agreement or limited liability company agreement relating to Pledged Partnership Interests or Pledged LLC Interests and shall enforce all of its material rights with respect to any such Interests;
(f) it will defend the Pledged Equity Interests against the claims and demands of all Persons, other than holders of Permitted Liens herein;
(g) without the prior written consent of the Trustee, it shall not withdraw as a partner or member of any Issuer if such withdrawal would materially and adversely affect the value of the Collateral;
(h) it shall cause each Issuer to consent to the grant by the Company to the Trustee of a security interest in the Pledged Equity Interests issued by such Issuer and, without limiting the foregoing, to consent to the transfer of any such Pledged Partnership Interest or Pledged LLC Interest to the Trustee or its nominee following the occurrence and continuance of an Event of Default and to the substitution of the Trustee or its nominee as a partner in any partnership or as a member in any limited liability company with all the rights and powers related thereto;
(i) so long as no Event of Default shall have occurred and be continuing:
(i) except as otherwise provided in subsection (a) or (b) of this Section 4 or Section 8.01(a) hereof, the Company shall be entitled to exercise or refrain from exercising any and all voting and other consensual rights pertaining to the Pledged Equity Interests or any part thereof for any purpose not violating the terms of this Agreement or the Indenture; provided that the Company shall exercise or refrain from exercising any such right if the Trustee (which may act in its reasonable judgment or at the direction of the Holders of not less than a majority in aggregate principal amount of the then outstanding Notes) shall have notified the Company that such action would have a material adverse effect on the value of the Pledged Equity Interests or any part thereof; and provided further that the Company shall give the Trustee at least five (5) Business Days' prior written notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right; it being understood, however, that neither the voting by the Company of any Pledged Stock for, or the Company's consent to, the election of directors (or similar governing body) at a regularly scheduled annual or other meeting of stockholders or with respect to incidental matters at any such meeting, nor the Company's consent to or approval of any action otherwise permitted under this Agreement or the Indenture, shall be deemed to violate the terms of this Agreement within the meaning of this Section 4(i), and no notice of any such voting or consent need be given to the Trustee; and
(ii) the Trustee shall promptly execute and deliver (or cause to be executed and delivered) to the Company all proxies, and other instruments as the Company may from time to time reasonably request for the purpose of enabling the Company to exercise voting and other consensual rights when and to the extent to which it is entitled to exercise such rights pursuant to clause (i) above;
(j) upon the occurrence and during the continuance of an Event of Default:
(i) all rights of the Company to exercise or refrain from exercising the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease, and all such rights shall thereupon become vested in the Trustee, which shall thereupon during any such period have the sole right to exercise such voting and other consensual rights; and
(ii) in order to permit the Trustee to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto, the Company shall promptly execute and deliver (or cause to be executed and delivered) to the Trustee all proxies, orders and other instruments as the Trustee may from time to time reasonably request for any such purpose; and
(k) if the Company shall acquire Pledged Equity Interests referred to in clause (ii) of the definition of the term "Issuers" contained in Section 1 hereof, it shall, if it does not own directly all of the issued and outstanding Voting Stock of the Issuer of such Pledged Equity Interests, cause the Subsidiaries of the Company that own, directly or indirectly, such Voting Stock to become parties to this Agreement or a supplement hereto and to execute such other documents and instruments, and take such action, as shall be necessary to effect the pledge of and security interest in such Pledged Equity Interests provided for in this Agreement; and this Agreement, as so supplemented, may provide for changes hereto necessary if any such Pledged Equity Interests represent less than all of the outstanding Voting Stock of the IssuerRegistration Statement.
Appears in 1 contract
Certain Covenants and Agreements. The Section 6.1. Conduct of Business by the Company. For the period commencing on the date hereof and ending on the Closing Date, the Shareholder will cause the Company and each Subsidiary to, except as expressly required hereby covenants and agrees thatexcept as otherwise consented to in advance in writing by the Purchaser:
(a) without conduct its businesses only in the prior written consent Ordinary Course and not engage in any new line of the Trustee, it shall not vote business or consent or take enter into any other action to: (i) amend or terminate any partnership agreement, limited liability company agreement, certificate of incorporation, by-laws transaction or other organizational documents of activity or make any Issuer in any way that changes the rights of the Company commitment with respect to any Pledged Equity Interests or adversely affects the validity, perfection or priority of the Trustee's security interest therein, (ii) permit any issuer of any Pledged Equity Interest to issue to any Person other than the Company or any additional stockSubsidiary, partnership interests, limited liability company interests or other equity interests of any nature or to issue securities convertible into or granting except those in the right of purchase or exchange for any stock or other equity interest of any nature of such Issuer, (iii) other than as permitted Ordinary Course and not otherwise prohibited under the Indenture or this Agreement, permit any Issuer to dispose of all or a material portion of its assets, (iv) waive any default under or breach of any terms, in each case which would adversely affect the validity, perfection or priority of the Trustee's security interest hereunder, of any organizational document relating to the issuer of any Pledged Equity Interest or (v) cause any Issuer of any Pledged Partnership Interests or Pledged LLC Interests which are not securities (for purposes of the Uniform Commercial Code) on the date hereof to elect or otherwise take any action to cause such Pledged Partnership Interests or Pledged LLC Interests to be treated as securities for purposes of the Uniform Commercial CodeSection 6.1;
(b) without use commercially reasonable efforts to preserve intact the prior written consent goodwill and business organization of the TrusteeCompany and each Subsidiary, it shall keep the officers and employees of the Company and each Subsidiary available to the Purchaser and preserve the relationships and goodwill of the Company and each Subsidiary with customers, distributors, suppliers, employees and other Persons having business relations with the Company or any Subsidiary;
(c) maintain its existence and good standing in its jurisdiction of organization and in each jurisdiction in which the ownership or leasing of its property or the conduct of its business requires such qualification;
(d) duly and timely file or cause to be filed all Tax Returns required to be filed with any Governmental Entity and promptly pay or cause to be paid when due all Taxes, assessments and governmental charges, including interest and penalties levied or assessed, unless diligently contested in good faith by appropriate proceedings;
(e) not permit authorize for issuance, issue, sell, transfer, pledge, encumber, dispose of or deliver any Issuer additional shares of its capital stock or securities convertible into or exchangeable for shares of its capital stock, or issue, sell, transfer, pledge, encumber or grant any right, option or other commitment for the issuance of shares of its capital stock, or split, combine or reclassify any shares of its capital stock;
(f) not amend or modify its charter documents or other corporate governance documents;
(g) not declare any dividend, pay or set aside for payment any dividend or other distribution or make any payment to merge the Shareholder or consolidate unless all any of its Affiliates, other than cash sweeps in the outstanding Ordinary Course or as permitted hereunder;
(h) not create any subsidiary, acquire any capital stock or other equity interests of the surviving or resulting corporation, limited liability company, partnership or other entity is, upon such merger or consolidation, pledged hereunder and no cash, securities or other property is distributed in respect of the outstanding equity interests of any other constituent Person;
(c) in the event that it acquires rights corporation or acquire any equity or ownership interest in any Pledged Equity Interests after the date hereof, it shall deliver to the Trustee a completed Pledge Supplement with respect to such Pledged Equity Interests; notwithstanding the foregoing, except in the case of a transaction contemplated by Section 4(k) hereof, the security interest of the Trustee shall attach to all Pledged Equity Interests immediately upon the Company's acquisition of rights therein and shall not be affected by the failure of the Company to deliver any such supplement;
(d) except as provided in the next sentence, in the event that the Company receives any dividends, interest business or distributions on any Pledged Equity Interests, or any securities or other property upon the merger, consolidation, liquidation or dissolution of any Issuer, then (a) such dividends, interest or distributions and securities or other property shall be included in the definition of Collateral without, except in the case of a transaction contemplated by Section 4(k) hereof, further action and (b) the Company shall immediately take all steps, if any, necessary or advisable to ensure the validity, perfection, priority and, if applicable, control of the Trustee over the same, and pending any such action the Company shall be deemed to hold such dividends, interest, distributions, securities or other property in trust for the benefit of the Trustee and shall segregate the same from all other property of the Company; notwithstanding the foregoing, so long as no Event of Default shall have occurred and be continuing, the Company shall have the right to retain and utilize in its business all ordinary cash dividends and distributions paid in the normal course of the business of the applicable Issuer;
(e) it shall comply with all of its obligations under any partnership agreement or limited liability company agreement relating to Pledged Partnership Interests or Pledged LLC Interests and shall enforce all of its material rights with respect to any such Interests;
(f) it will defend the Pledged Equity Interests against the claims and demands of all Persons, other than holders of Permitted Liens herein;
(g) without the prior written consent of the Trustee, it shall not withdraw as a partner or member of any Issuer if such withdrawal would materially and adversely affect the value of the Collateral;
(h) it shall cause each Issuer to consent to the grant by the Company to the Trustee of a security interest in the Pledged Equity Interests issued by such Issuer and, without limiting the foregoing, to consent to the transfer of any such Pledged Partnership Interest or Pledged LLC Interest to the Trustee or its nominee following the occurrence and continuance of an Event of Default and to the substitution of the Trustee or its nominee as a partner in any partnership or as a member in any limited liability company with all the rights and powers related theretoentity;
(i) so long as no Event of Default shall have occurred and be continuing:
(i) except as otherwise provided in subsection (a) or (b) of this Section 4 or Section 8.01(a) hereof, the Company shall be entitled to exercise or refrain from exercising not make any and all voting and other consensual rights pertaining to the Pledged Equity Interests or any part thereof commitment for any purpose not violating capital expenditure to be made following the terms date hereof in excess of this Agreement or $50,000 in the Indenture; provided that the Company shall exercise or refrain from exercising any such right if the Trustee (which may act in its reasonable judgment or at the direction of the Holders of not less than a majority in aggregate principal amount of the then outstanding Notes) shall have notified the Company that such action would have a material adverse effect on the value of the Pledged Equity Interests or any part thereof; and provided further that the Company shall give the Trustee at least five (5) Business Days' prior written notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right; it being understood, however, that neither the voting by the Company case of any Pledged Stock for, single expenditure or $250,000 in the Company's consent to, the election case of directors (or similar governing body) at a regularly scheduled annual or other meeting of stockholders or with respect to incidental matters at any such meeting, nor the Company's consent to or approval of any action otherwise permitted under this Agreement or the Indenture, shall be deemed to violate the terms of this Agreement within the meaning of this Section 4(i), and no notice of any such voting or consent need be given to the Trustee; and
(ii) the Trustee shall promptly execute and deliver (or cause to be executed and delivered) to the Company all proxies, and other instruments as the Company may from time to time reasonably request for the purpose of enabling the Company to exercise voting and other consensual rights when and to the extent to which it is entitled to exercise such rights pursuant to clause (i) abovecapital expenditures;
(j) upon not incur, assume, guarantee or otherwise incur any Indebtedness, other than in the occurrence Ordinary Course and during Indebtedness to the continuance of an Event of Default:Shareholder under the Shareholder Credit Agreement (provided that such Indebtedness is repaid in full prior to or on the Closing Date as contemplated by Section 3.1);
(ik) not sell, lease, transfer, pledge, dispose of or encumber any assets, rights, securities or businesses other than in the Ordinary Course or as permitted hereunder;
(l) waive, release, settle or compromise any pending or threatened Legal Proceeding relating to the Company or any Subsidiary;
(m) maintain in full force and effect insurance coverage in form and amount equivalent in all rights material respects to the insurance coverage currently maintained with respect to the Company and its Subsidiaries and their assets and properties;
(n) not increase in any manner the compensation of, pay any bonus to, or enter into any new bonus or incentive agreement or arrangement with, any of its employees, officers, directors or consultants;
(o) not pay or agree to pay any additional pension, retirement allowance or other employee benefit under any Company Benefit Plan to any of its employees or consultants, whether past or present;
(p) not adopt, amend or terminate any Company Benefit Plan or increase the benefits provided under any Company Benefit Plan, or promise or commit to undertake any of the Company to exercise or refrain from exercising foregoing in the voting future;
(q) not enter into a collective bargaining agreement;
(r) maintain supplies and inventory at levels that are in the Ordinary Course, and maintain equipment and other consensual rights which it would otherwise be entitled assets in a state of repair, order and condition consistent with past practices;
(s) continue to exercise pursuant hereto shall ceaseextend customers credit, collect accounts receivable and all such rights shall thereupon become vested pay accounts payable and similar obligations in the TrusteeOrdinary Course;
(t) not pay, which shall thereupon during discharge or satisfy any such period have claim, liability or obligation (absolute, contingent or otherwise) other than the sole right payment, discharge or satisfaction in the Ordinary Course of claims, liabilities and obligations reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course;
(u) not increase any reserves for contingent liabilities (excluding any adjustment to exercise such voting bad debt reserves in the Ordinary Course);
(v) continue to maintain its books and other consensual rightsrecords in accordance with GAAP; and
(iiw) continue making all budgeted capital expenditures and ordinary repairs, maintenance, renewals and replacements in order to permit the Trustee to exercise Ordinary Course. In connection with the voting and other consensual rights which it may be entitled to exercise pursuant hereto, the Company shall promptly execute and deliver (or cause to be executed and delivered) to the Trustee all proxies, orders and other instruments as the Trustee may from time to time reasonably request for any such purpose; and
(k) if the Company shall acquire Pledged Equity Interests referred to in clause (ii) of the definition of the term "Issuers" contained in Section 1 hereof, it shall, if it does not own directly all of the issued and outstanding Voting Stock of the Issuer of such Pledged Equity Interests, cause the Subsidiaries continued operation of the Company and each Subsidiary during the period commencing on the date hereof and ending on the Closing Date, the Shareholder shall confer, and shall cause the Company to confer, in good faith on a regular and frequent basis with the Purchaser regarding operational matters and the general status of on-going operations of the Company and its Subsidiaries. The Shareholder hereby acknowledges that ownthe Purchaser does not and shall not waive any right it may have hereunder as a result of such consultations. The Shareholder shall not, directly and shall cause the Company and each Subsidiary not to, take any action that will result in any representation or indirectly, such Voting Stock warranty of the Shareholder set forth herein to become parties to this Agreement or a supplement hereto and to execute such other documents and instruments, and take such action, as shall be necessary to effect the pledge of and security interest in such Pledged Equity Interests provided for in this Agreement; and this Agreement, as so supplemented, may provide for changes hereto necessary if any such Pledged Equity Interests represent less than all of the outstanding Voting Stock of the Issueruntrue.
Appears in 1 contract
Samples: Stock Purchase Agreement
Certain Covenants and Agreements. The Section 6.1 Conduct of Business by the Company. From the date hereof until the Closing Date or until this Agreement is terminated as provided in Article VIII, the Company hereby covenants shall, and agrees thatthe Sellers shall cause the Company to, except as required in connection with the transactions contemplated by this Agreement and except as otherwise consented to in writing by the Purchaser:
(a) conduct its businesses in the ordinary course on a basis consistent with past practice and not engage in any new line of business or enter into any agreement, transaction or activity or make any commitment with respect to the Business or the properties and assets of the Company except those in the ordinary course of business and not otherwise prohibited under this Section 6.1;
(b) use commercially reasonable efforts to preserve intact the goodwill and business organization of the Company, keep the officers and employees of the Company available to the Purchaser and preserve the relationships and goodwill of the Company with customers, distributors, suppliers, employees and others having business relations with the Company;
(c) maintain its existence and good standing in the State of California and in each jurisdiction in which the ownership or leasing of its property or the conduct of its business requires such qualification, except where the failure to so qualify will not have a Company Material Adverse Effect;
(d) duly and timely file or cause to be filed all reports and returns required to be filed with any Court or Governmental Entity and promptly pay or cause to be paid when due all Taxes and other governmental charges, including interest and penalties levied or assessed, unless diligently contested in good faith by appropriate proceedings;
(e) maintain in existing condition and repair (ordinary wear and tear excepted), consistent with past practices, all buildings, offices and other structures located on the Real Property, and all equipment, fixtures and other tangible personal property located on the Real Property;
(f) not authorize for issuance, issue and deliver any additional shares of its capital stock or securities convertible into or exchangeable for shares of its capital stock, or issue or grant any right, option or other commitment for the issuance of shares of its capital stock or of such securities, or split, combine or reclassify any shares of its capital stock, other than issuance of shares of the Company Stock pursuant to the exercise of Company Options issued and outstanding on the date hereof;
(g) not amend or modify its charter documents;
(h) not declare any dividend, pay or set aside for payment any dividend or other distribution or make any payment to any related parties other than the payment of salaries in the ordinary course of business under existing contracts and agreements;
(i) not create any subsidiary, acquire any capital stock or other equity securities of any corporation or acquire any equity or ownership interest in any business or entity;
(j) not dispose of or permit to lapse any rights to the use of any patent, trademark, trade name, service mark, xxcense or copyright of the Company, including, without limitation, any of the Intellectual Property, or dispose of or disclose to any Person (other than disclosure in the ordinary course of business or pursuant to existing license agreements or existing nondisclosure agreements), any trade secret, formula, process, technology or know-how of the Company not heretofore a matter of public knowledge;
(k) not (i) sell any assets, other than finished goods sold in the ordinary course of business, (ii) create, incur or assume any indebtedness secured by the real or personal property of the Company, (iii) grant, create, incur or suffer to exist any Liens on the real or personal properties of the Company which did not exist on the date hereof, (iv) incur any liability or obligation (absolute, accrued or contingent) except in the ordinary course of business consistent with past practice, (v) write-off any guaranteed checks, notes or accounts receivable except in the ordinary course of business consistent with past practice, (vi) write-down the value of any asset or investment on the books or records of the Company, except for depreciation and amortization in the ordinary course of business and consistent with past practice, (vii) cancel any debt or waive any claims or rights, (viii) make any commitment for any capital expenditure in excess of $10,000 individually or in excess of $100,000 in the aggregate or (ix) enter into any material contract or agreement outside the ordinary course of business involving payments by the Company greater than $100,000 individually or in the aggregate without the prior written consent of the TrusteePurchaser;
(l) not increase in any manner the base compensation of, it shall or enter into any new bonus or incentive agreement or arrangement with, any of its current or former employees, directors or consultants;
(m) not vote or consent or take any other action to: (i) adopt, amend or terminate any partnership agreementCompany Benefit Plan or increase the benefits provided under any Company Benefit Plan, limited liability company agreement, certificate of incorporation, by-laws or other organizational documents of promise or commit to undertake any Issuer in any way that changes the rights of the Company with respect to any Pledged Equity Interests or adversely affects foregoing in the validity, perfection or priority of the Trustee's security interest therein, (ii) permit any issuer of any Pledged Equity Interest to issue to any Person other than the Company any additional stock, partnership interests, limited liability company interests or other equity interests of any nature or to issue securities convertible into or granting the right of purchase or exchange for any stock or other equity interest of any nature of such Issuer, (iii) other than as permitted under the Indenture or this Agreement, permit any Issuer to dispose of all or a material portion of its assets, (iv) waive any default under or breach of any terms, in each case which would adversely affect the validity, perfection or priority of the Trustee's security interest hereunder, of any organizational document relating to the issuer of any Pledged Equity Interest or (v) cause any Issuer of any Pledged Partnership Interests or Pledged LLC Interests which are not securities (for purposes of the Uniform Commercial Code) on the date hereof to elect or otherwise take any action to cause such Pledged Partnership Interests or Pledged LLC Interests to be treated as securities for purposes of the Uniform Commercial Codefuture;
(bn) without the prior written consent of the Trusteenot amend any existing employment, it shall not permit any Issuer to merge or consolidate unless all the outstanding capital stock severance, consulting, or other equity interests of the surviving compensation agreement or resulting corporationenter into any new employment, limited liability companyseverance, partnership consulting or other entity is, upon such merger or consolidation, pledged hereunder and no cash, securities or other property is distributed in respect of the outstanding equity interests of any other constituent Personcompensation agreement;
(co) maintain supplies and inventory at levels that are in the event that it acquires rights in any Pledged Equity Interests after the date hereof, it shall deliver to the Trustee a completed Pledge Supplement ordinary course of business and consistent with respect to such Pledged Equity Interests; notwithstanding the foregoing, except in the case of a transaction contemplated by Section 4(k) hereof, the security interest of the Trustee shall attach to all Pledged Equity Interests immediately upon the Company's acquisition of rights therein and shall not be affected by the failure of the Company to deliver any such supplementpast practice;
(dp) except as provided continue to extend customers credit, collect accounts receivable and pay accounts payable and similar obligations in the next sentence, in the event that the Company receives any dividends, interest or distributions on any Pledged Equity Interests, or any securities or other property upon the merger, consolidation, liquidation or dissolution of any Issuer, then (a) such dividends, interest or distributions and securities or other property shall be included in the definition of Collateral without, except in the case of a transaction contemplated by Section 4(k) hereof, further action and (b) the Company shall immediately take all steps, if any, necessary or advisable to ensure the validity, perfection, priority and, if applicable, control of the Trustee over the same, and pending any such action the Company shall be deemed to hold such dividends, interest, distributions, securities or other property in trust for the benefit of the Trustee and shall segregate the same from all other property of the Company; notwithstanding the foregoing, so long as no Event of Default shall have occurred and be continuing, the Company shall have the right to retain and utilize in its business all ordinary cash dividends and distributions paid in the normal course of the business of the applicable Issuerconsistent with past practice;
(eq) it shall comply with perform all of its obligations under all, and not default or suffer to exist any partnership agreement event or limited liability company agreement relating to Pledged Partnership Interests condition which with notice or Pledged LLC Interests lapse of time or both would constitute a default under any Company Contract (except those being contested in good faith) and shall enforce all of its material rights with respect to not assume or amend any such Interestscontract or commitment that is or would be a Company Contract;
(fr) it will defend the Pledged Equity Interests against the claims and demands of all Personsnot pay, discharge or satisfy any claim, liability or obligation (absolute, contingent or otherwise) other than holders the payment, discharge or satisfaction in the ordinary course of Permitted Liens hereinbusiness consistent with past practice of claims, liabilities and obligations reflected or reserved against in the unaudited balance sheet of the Company at March 31, 2001, or incurred in the ordinary course of business consistent with past practice;
(gs) without not increase any reserves for contingent liabilities (excluding any adjustment to bad debt reserves in the prior written consent ordinary course of the Trustee, it shall not withdraw as a partner or member of business consistent with past practice and any Issuer if such withdrawal would materially and adversely affect the value of the Collateraladjustments required by subparagraph (u) below);
(ht) it shall cause each Issuer to consent to the grant by the Company to the Trustee of a security interest maintain in full force and effect and in the Pledged Equity Interests issued same amounts policies of insurance comparable in amount and scope of coverage to that now maintained by such Issuer and, without limiting the foregoing, to consent to the transfer of any such Pledged Partnership Interest or Pledged LLC Interest to the Trustee or its nominee following the occurrence and continuance of an Event of Default and to the substitution on behalf of the Trustee or its nominee as a partner in any partnership or as a member in any limited liability company with all the rights and powers related theretoCompany;
(iu) so long as no Event of Default shall have occurred continue to maintain its books and be continuing:
(i) except as otherwise provided records in subsection (a) or (b) of this Section 4 or Section 8.01(a) hereofaccordance with GAAP consistently applied, the Company shall be entitled to exercise or refrain from exercising any and all voting and other consensual rights pertaining to the Pledged Equity Interests or any part thereof for any purpose not violating the terms of this Agreement or the Indenture; provided that the Company shall exercise or refrain from exercising any such right if the Trustee (which may act in its reasonable judgment or at the direction of the Holders of not less than on a majority in aggregate principal amount of the then outstanding Notes) shall have notified the Company that such action would have a material adverse effect on the value of the Pledged Equity Interests or any part thereof; and provided further that the Company shall give the Trustee at least five (5) Business Days' prior written notice of the manner in which it intends to exercise, or the reasons for refraining from exercising, any such right; it being understood, however, that neither the voting by the Company of any Pledged Stock for, or basis consistent with the Company's consent to, past practice;
(v) continue its cash management practices in the election ordinary course of directors (or similar governing body) at a regularly scheduled annual or other meeting of stockholders or business consistent with respect to incidental matters at any such meeting, nor the Company's consent to or approval of any action otherwise permitted under this Agreement or the Indenture, shall be deemed to violate the terms of this Agreement within the meaning of this Section 4(i), and no notice of any such voting or consent need be given to the Trusteepast practice; and
(iiw) not authorize, or commit or agree to take, any of the Trustee shall promptly execute foregoing actions described in subparagraphs (a) through (v) above. In connection with the continued operation of the Business between the date hereof and deliver (the Closing Date or cause to be executed and delivered) to until this Agreement is terminated as provided in Article VIII, the Company all proxieswill, and other instruments as the Sellers will cause the Company may from time to time reasonably request for to, confer in good faith on a regular and frequent basis with the purpose Purchaser regarding operational matters and the general status of enabling ongoing operations of the Company promptly and will notify the Purchaser of any event or occurrence that has had or may reasonably be expected to exercise voting have a Company Material Adverse Effect. The Company and other consensual the Sellers acknowledge that the Purchaser does not and will not waive any rights when it may have under this Agreement as a result of such consultations. Neither the Company nor the Sellers shall, and the Sellers shall not cause the Company to, take any action that would, or that could reasonably be expected to, result in any of the representations and warranties of the Sellers set forth in this Agreement becoming untrue to the extent to which it is entitled to exercise such rights pursuant to clause (i) above;
(j) upon the occurrence and during the continuance of an Event of Default:
(i) all rights of the Company to exercise or refrain from exercising the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease, and all such rights shall thereupon become vested in the Trustee, which shall thereupon during that any such period representation or warranty becoming untrue would have the sole right to exercise such voting and other consensual rights; and
(ii) in order to permit the Trustee to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto, the a Company shall promptly execute and deliver (or cause to be executed and delivered) to the Trustee all proxies, orders and other instruments as the Trustee may from time to time reasonably request for any such purpose; and
(k) if the Company shall acquire Pledged Equity Interests referred to in clause (ii) of the definition of the term "Issuers" contained in Section 1 hereof, it shall, if it does not own directly all of the issued and outstanding Voting Stock of the Issuer of such Pledged Equity Interests, cause the Subsidiaries of the Company that own, directly or indirectly, such Voting Stock to become parties to this Agreement or a supplement hereto and to execute such other documents and instruments, and take such action, as shall be necessary to effect the pledge of and security interest in such Pledged Equity Interests provided for in this Agreement; and this Agreement, as so supplemented, may provide for changes hereto necessary if any such Pledged Equity Interests represent less than all of the outstanding Voting Stock of the IssuerMaterial Adverse Effect.
Appears in 1 contract
Samples: Merger Agreement (Internet Security Systems Inc/Ga)
