Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required by any other provision of this Agreement or as required by applicable Law, unless Parent will otherwise agree in writing (which agreement will not be unreasonably withheld, delayed or conditioned), the Company will and will cause each Company Subsidiary to conduct its operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve substantially intact its business organization and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees). Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required by any other provision of this Agreement or as required by applicable Law, the Company will not and will cause each Company Subsidiary not to (unless required by applicable Law), between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned): (a) amend the Company Charter or Company Bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect); (b) issue, deliver, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards outstanding as of the date hereof in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylaws; (c) sell, pledge, dispose of, transfer, lease, license or encumber any material property or assets of the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000; (d) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries) or enter into any agreement with respect to its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries); (e) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interests; (f) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law; (g) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stock) any interest in any business, division, organization or any Person (or any material portion of the assets thereof), other than (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000; (h) enter into any new line of business that is material to the Company; (i) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become responsible for the obligations of any Person for borrowed money, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate; (j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice; (k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice; (l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,000; (m) except to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice), (B) grant any additional rights to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement); (n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director; (o) forgive any loans to Service Providers or any of their respective affiliates; (p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law; (q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents; (r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement; (s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy; (t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or (u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act; (v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation; (w) authorize or enter into any Contract or otherwise make any commitment, in each case to do any of the foregoing in clauses (a) through (v).
Appears in 2 contracts
Samples: Merger Agreement (Ch2m Hill Companies LTD), Merger Agreement (Jacobs Engineering Group Inc /De/)
Conduct of Business by the Company Pending the Closing. (a) The Company covenants and agrees that, between the date of this Agreement and until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7VIII, except as set forth in Section 5.1 6.1(a) of the Company Disclosure Schedule, as otherwise expressly contemplated, required or permitted by any other provision of this Agreement or Agreement, as required by applicable Law, unless Parent will otherwise agree Law or as consented to in writing by Parent (which agreement will consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company will will, and will cause each Company Subsidiary to (i) conduct its operations business in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve substantially intact its business organization and (ii) maintain use its reasonable best efforts to keep available the services of the current officers, key employees and consultants of the Company and each Company Subsidiary and to preserve its assetsthe current relationships of the Company and each Company Subsidiary with each of the key customers, properties suppliers and positive other Persons with whom the Company or any Company Subsidiary has business relations that are material business relationships to the Company or any Company Subsidiary.
(including employees). b) Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 6.1(a) of the Company Disclosure Schedule, as otherwise expressly contemplated, required or permitted by any other provision of this Agreement or Agreement, as required by applicable LawLaw or as consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company will shall not, and shall not and will cause each permit any Company Subsidiary not to (unless required by applicable Law)to, between the date of this Agreement and until the earlier of the Effective TimeTime and the termination of this Agreement in accordance with Article VIII, directly or indirectly, do, or agree to do, take any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):actions:
(ai) amend or otherwise change the Company Charter or Company Bylaws Memorandum and Articles or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any the Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)Subsidiaries;
(bii) issue, deliver, sell, pledge, transfer, encumber or otherwise dispose of, grantor authorize, transfer propose or encumber, or authorize agree to the issuance, delivery, sale, pledge, disposition, grant, transfer, encumbrance or encumbrance disposition of, any shares of any class or series of its share capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any securities convertible into or exchangeable for, or options, warrants warrants, calls, commitments or other rights of any kind to acquire acquire, any shares of such any class or series of its share capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), of the Company or any Company Subsidiary, other than (ix) the issuance of Shares upon the vesting, settlement or pursuant to the exercise or settlement of Company Accelerated Equity Share Awards outstanding as of existing on the date hereof in accordance with their terms, (ii) transactions between applicable Company Share Plans and the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries applicable award agreements on the terms in effect on the date hereof or (iiiy) expressly required under any Contract in effect on the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylawsdate hereof);
(c) sell, pledge, dispose of, transfer, lease, license or encumber any material property or assets of the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(diii) declare, set aside, establish a record date for, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its share capital stock or Equity Interests (except as between other than dividends paid by a Company Subsidiary to the Company and its Subsidiaries or between the to any other wholly-owned Company Subsidiaries) Subsidiary), or enter into any agreement with respect to the voting of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)share capital;
(eiv) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire or offer to acquire, directly or indirectly, any of its share capital stock or other Equity Interests, or authorize securities convertible or propose the issuance of exchangeable into or exercisable for any other securities in respect of, in lieu of or in substitution for shares of its share capital stock or other Equity Interests, except pursuant to the exercise or settlement of Company Share Awards, employee severance, retention, termination, change of control and other contractual rights existing on the date hereof on the terms in effect on the date hereof;
(fv) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, including by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization Person or any Person (division thereof or any material portion of the assets thereof), other than (i) as required pursuant to the terms of or make any existing Company Material Contract to which the Company loan, advance or capital contribution to, or investment in, any Person or any Company Subsidiary is a party division thereof, except any such acquisitions, loans, advances, contributions or (ii) as required pursuant to the terms of any existing non-Company Material Contract, investments that are consistent with past practice and which acquisition is individually are for consideration not in excess of $10,000,000, 10,000,000 (or an equivalent amount in RMB) individually and $30,000,000 (or an equivalent amount in RMB) in the aggregate not in excess of $20,000,000for all such transactions by the Company and the Company Subsidiaries;
(hvi) enter into redeem, repurchase, prepay, defease, cancel, incur or otherwise acquire, or modify the terms of, any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money Indebtedness or issue or sell any debt securities (or rights to acquire debt securities) other Contracts evidencing Indebtedness or assume, guarantee or endorse, or otherwise become responsible for for, the obligations of any Person for borrowed moneyIndebtedness, in each case other than except for (A) Indebtedness incurred under the Company’s or any indebtedness Company Subsidiary’s existing credit facilities as in effect on the date hereof in an aggregate amount not to exceed the maximum amount authorized under the Contracts evidencing such Indebtedness, (B) Indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices in a principal amount not in excess of RMB150,000,000 for all such Indebtedness by the Company and the Company Subsidiaries in the aggregate and (C) Indebtedness owed by any wholly-owned Company Subsidiary to the Company or any other wholly-owned Company Subsidiary.
(vii) grant any Lien on any material assets, other than Liens granted in connection with any Indebtedness permitted under Section 6.1(b)(vi) or any Permitted Encumbrances;
(viii) sell, transfer, lease, license, assign or otherwise dispose of (including, by merger, consolidation, or sale of stock or assets) any entity, business, assets, rights or properties of the Company or any Company Subsidiary pursuant having a current value in excess of RMB50,000,000 in the aggregate;
(ix) sell, transfer, assign, license, grant any other rights (including any covenant not to xxx, option, right of first refusal, and right of first offer) under, or otherwise dispose of (including, by merger, consolidation or sale of stock or assets), abandon, permit to lapse, permit to be subject to any Lien, or fail to maintain or protect in full force and effect (including any failure to protect the Existing Credit Facilities confidentiality of), any material Company Intellectual Property, or disclose to any Person any confidential information (except for disclosure of confidential information in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms confidentiality agreements, and non-exclusive licenses of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement Intellectual Property granted by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,000;
(m) except to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice);
(x) authorize, (B) grant or make any additional rights to severance or termination pay commitment with respect to, any single capital expenditure in excess of RMB20,000,000 or capital expenditures for the Company and the Company Subsidiaries in excess of RMB100,000,000 in the aggregate;
(xi) enter into any severance agreement with, any director, officer employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course line of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit outside of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of its existing business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement segments that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole;
(xii) except as otherwise required by Law or expressly required under any Contract in effect on the date hereof, and (z) for awards in cash in lieu of (A) grant or announce any stock option option, equity, equity-linked or incentive awards or cash incentives thatchange the vesting dates of any Company Share Award from the vesting date for such Company Share Award set forth in Section 4.2(a) of the Company Disclosure Schedule, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards subject to Section 6.12(b), grant or cash incentives thatannounce any increase in the salaries, but for this Agreementbonuses or other compensation and benefits payable by the Company or any Company Subsidiary to any of the employees, would otherwise be granted to officers, directors, shareholders or other service providers of the Company or any Company Subsidiary having a total annual base salary and incentive compensation opportunity in excess of $300,000 (or an equivalent amount in RMB), (C) hire (or enter into any employment agreements with) any employees who are not officers having a total annual base salary and incentive compensation opportunity in accordance with Company policies and practices for purposes excess of retention with a payout period of no more than one $500,000 (1) year, with or an aggregate cash award equivalent amount under sub clauses (A) and (B) of no more than $1,000,000in RMB), (D) pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other employee benefit not required by any existing Company Plan, (E) enter into or adopt any new, or materially increase benefits under or renew, amend or terminate any existing Company Benefit Plan or Foreign Benefit Plan benefit arrangement or any collective bargaining agreement or (except as contemplated by this Agreement)F) take any action or fail to take any action which would (with the passage of time, the consummation of the Transactions or otherwise) require a payment or give rise to any rights of any Person in connection with the Transactions;
(nxiii) hire except as may be required by GAAP or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any a result of their respective affiliates;
(p) a change in Law, make any change in accounting principles, policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Lawmethods;
(qxiv) waivechange any material method of Tax accounting, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any amended material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material TaxesTax liability, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material closing agreement with respect to any Tax, surrender any right to claim a material Tax sharing or similar agreementrefund, fail to pay any material Taxes as they become due and payable;
(sxv) terminate settle, release, waive or modify compromise any pending or threatened Action of or against the Company or any of the Company Subsidiaries (A) for an amount in any material respect any Insurance Policy, excess of $100,000,000 (or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(tan equivalent amount in RMB) write up, write down or write off the book value of any tangible assets, in the aggregate, (B) entailing the incurrence of (x) any obligation or liability of the Company or any Company Subsidiary in excess of $5,000,000such amount, except for depreciation or (y) obligations that would impose any material restrictions on the business or operations of the Company or any of the Company Subsidiaries, or (C) that is brought by or on behalf of any current, former or purported holder of any share capital or debt securities of the Company or any Company Subsidiary relating to the Transactions;
(xvi) (A) enter into (other than extensions at the end of a term in the ordinary course of business), terminate or materially amend or modify any Company Material Contract or Contract that, if in effect on the date hereof, would have been a Company Material Contract, or (B) waive any material default under, or release, settle or compromise any material claim against the Company or liability or obligation owing to the Company under, any Company Material Contract;
(xvii) fail to maintain in full force and amortization effect material insurance policies covering the Company and the Company Subsidiaries and their respective properties, assets and businesses in accordance a form and amount consistent with GAAP consistently appliedpast practice;
(xviii) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary (other than the Merger or any merger or consolidation among wholly-owned Subsidiaries of the Company);
(xix) take any action which would result in any of the conditions to the Merger set forth in Article VII not being satisfied or that would reasonably be expected to prevent, materially delay or impair the ability of the Company to consummate the Merger; or
(uxx) engage in any transactionsknowingly commit, arrangements authorize or understandings with any Affiliate or other Person that would be required agree to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize foregoing actions or enter into any Contract letter of intent (binding or otherwise make any commitment, in each case non-binding) or similar agreement or arrangement with respect to do any of the foregoing actions.
(c) Nothing contained in clauses (a) through (v)this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the operations of the Company or any Company Subsidiary prior to the Effective Time. Prior to the Effective Time, each of Parent and Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its respective Subsidiaries’ respective operations.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. (a) The Company covenants and agrees that, between the date of this Agreement and the earlier to occur of the Effective Time and the termination of this Agreement in accordance with Article 7pursuant to Section 8.1 or Section 8.2 hereof and the Effective Time, except as expressly set forth in Section 5.1 6.1(a) of the Company Disclosure Schedule, as required otherwise expressly permitted or contemplated by any other provision of this Agreement or Agreement, as required by applicable Law, unless Parent will otherwise agree Law or as consented to in writing by Parent (which agreement will such consent not to be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company will will, and will cause each Company Subsidiary to to, conduct its operations business in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve substantially intact its business organization and (ii) maintain existing relations and preserve its assetsgoodwill with customers, properties suppliers and positive employees in all material business relationships (including employees)respects. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 6.1(a) of the Company Disclosure Schedule, as required otherwise expressly permitted or contemplated by any other provision of this Agreement or Agreement, as required by applicable LawLaw or as consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed), the Company will shall not, and shall not and will cause each permit any Company Subsidiary not to (unless required by applicable Law)to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, take any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):actions:
(ai) amend or otherwise change the Company Charter Certificate of Incorporation or the Company Bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any the Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)Subsidiaries;
(bii) issue, deliver, sell, pledge, dispose of, grantpledge, transfer grant or otherwise encumber, or authorize authorize, propose or agree to the issuance, delivery, sale, disposition, pledge, disposition, grant, transfer, grant or encumbrance of, any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such its capital stock or other Equity Interests, or any securities convertible into or exchangeable for, or options, warrants warrants, calls, commitments or other rights of any kind to acquire acquire, any shares of such any class or series of its capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), of the Company or any Company Subsidiary, other than as permitted pursuant to clause (ixi) below, the issuance settlement of Shares upon existing Company Purchase Rights pursuant to the vesting, settlement Employee Stock Purchase Plan or the exercise exercise, conversion or settlement of Company Accelerated Equity Awards Options, Company Stock Appreciation Rights, Company Restricted Stock Units or Company Convertible Notes outstanding as of the date hereof and in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylaws;
(c) sell, pledge, dispose of, transfer, lease, license or encumber any material property or assets of the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect respective terms as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000hereof);
(diii) declare, set aside, establish a record date for, make or pay any dividend or other distribution (whether payable in cash, stockEquity Interests, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as Interests, other than between the Company and its Subsidiaries or between the Company Subsidiaries) , or enter into any agreement with respect to the voting or registration of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)stock;
(eiv) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire or offer to acquire, directly or indirectly, any of its capital stock or other Equity Interests, or authorize securities convertible or propose the issuance of exchangeable into or exercisable for any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interests, except as permitted pursuant to clause (xi) below, or pursuant to (A) the Employee Stock Purchase Plan or the exercise, conversion or settlement of Company Options, Company Stock Appreciation Rights, Company Restricted Stock Units or Company Convertible Notes outstanding as of the date herein in accordance with their respective terms, or (B) employee severance, retention, termination, change of control and other contractual rights existing on the date hereof on the terms in effect on the date hereof;
(fv) acquire (including by merger, consolidation or acquisition of Equity Interests or assets) any Person or any assets or securities thereof, or make any loan, advance or capital contribution to, or investment in, any Person or any division thereof, except (w) any such acquisitions, loans, advances, contributions or investments that are in the ordinary course of business consistent with past practice and are for consideration not in excess of $1,000,000 individually, or $2,500,000 for all such transactions by the Company and the Company Subsidiaries in the aggregate, (x) investments of cash on hand in accordance with the Company’s investment policies in the ordinary course of business, (y) acquisitions of assets, including raw materials, supplies and inventory, in the ordinary course of business, and (z) capital expenditures permitted by clause (ix);
(vi) redeem, repurchase, or prepay (other than in accordance with its terms), defease, cancel, incur or otherwise acquire, or modify the terms of, any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person for borrowed money;
(vii) enter into or materially amend or modify (other than extensions at the end of a term in the ordinary course of business) any Company Material Contract or Contract that, if in effect on the date hereof, would have been a Company Material Contract, or terminate, cancel or waive any rights under any such Contract other than in the ordinary course of business;
(viii) without limitation of Section 6.2, sell, pledge, let lapse, transfer, lease, sublease, license, guarantee, assign, abandon or otherwise dispose of, or encumber or otherwise grant any Lien (other than any Permitted Lien) on, any assets, rights or properties of the Company or any Company Subsidiary (including any Company Intellectual Property), other than, in each case, sales of inventory or surplus equipment or non-exclusive licenses under Company Intellectual Property in the ordinary course of business consistent with past practice;
(ix) authorize, or make any commitment with respect to, any single capital expenditure in excess of $1,000,000 or capital expenditures for the Company and the Company Subsidiaries in excess of $2,500,000 in the aggregate, except for capital expenditures that are contemplated by the Company’s existing plan for annual capital expenditures for 2013 previously made available to Parent;
(x) enter into any new line of business outside of its existing business segments;
(xi) (A) except to the extent required by applicable Law or any Company Plan existing on the date of this Agreement, grant or announce any stock option, equity or incentive awards or any increase in the salaries, bonuses or other compensation and benefits payable by the Company or any Company Subsidiary to any current or former executive officers, directors or any other employees or consultants of the Company or any Company Subsidiary, (B) hire any new executive officer, (C) except to the extent required by applicable Law or any Company Plan existing on the date of this Agreement, pay or agree to pay any pension, retirement allowance, termination or severance pay, or bonus, (D) except to the extent required by applicable Law or any Company Plan existing on the date of this Agreement, enter into or amend any Company Plan or Contract of employment or any consulting, bonus, severance, retention, retirement or similar Contract, (E) except as required to ensure that any Company Plan is not then out of compliance with applicable Law, enter into, commence participation in, amend, terminate or adopt any new, or increase benefits under any existing, Company Plan or any collective bargaining agreement, or (F) forgive any loans, or issue any loans to any directors, officers, employees or contractors of the Company or any Company Subsidiary;
(xii) except in accordance with GAAP consistently applied, write up, write down or write off the book value of any assets or, except as may be required by GAAP or as a result of a change in Law, make any material change in accounting principles, policies, practices, procedures or methods;
(xiii) settle or compromise any material claim or assessment for Taxes, or, except as may be required by applicable Law, materially change any method of Tax accounting, or make or change any Tax election;
(xiv) without limitation of Section 6.2, merge or consolidate the Company or any Company Subsidiary with or into any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stock) any interest in any business, division, organization or any Person (or any material portion of the assets thereof), other than (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become responsible for the obligations of any Person for borrowed money, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,000;
(m) except to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice), (B) grant any additional rights to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement)Subsidiary;
(nxv) hire or appoint forgive any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or directorloans;
(oxvi) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding Action (including any Proceeding relating to this Agreement or the transactions contemplated herebyTransaction Litigation) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 1,000,000 individually or $10,000,000 3,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, Parent, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agentsAffiliates;
(rxvii) (ia) encourage customers to make payments earlier than would otherwise reasonably be expected (based on normal customer purchasing patterns) to be made to the Company or change any material Tax electionthe Company Subsidiaries, (iib) adopt agree to payment terms or change any conditions with suppliers that are not consistent in all material Tax accounting methodrespects with past practice, (iiic) file with respect to the Covered Products, make any material amendment change in the selling, distribution, advertising, terms of sale or collection practices that is inconsistent with past practices, other than changes in selling and marketing strategies designed to more fully drive procedural volume and device utilization among both new and existing users through a Tax Returnmore disciplined approach to the business utilizing effective business planning, targeting and segmenting of customers and the clinical pathway to train for sustained utilization, or (ivd) with respect to the Covered Products, engage in the process of positioning inventory with distributors, wholesalers, retailers or customers in excess of customers’ requirements or initiate or engage in any program, activity or other action (including any rebate, discount, chargeback or refund policy or practice) that could reasonably be expected to result, directly or indirectly, in sales or profits significantly in excess of normal purchasing patterns of customers of the Company and the Company Subsidiaries or users of Covered Products; or
(xviii) enter into any closing agreement with a Governmental Entity with respect or arrangement to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, in each case to do any of the foregoing actions.
(b) Nothing contained in clauses (a) through (v)this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the operations of the Company or any Company Subsidiary prior to the Acceptance Time. Prior to the Acceptance Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective businesses and operations.
Appears in 1 contract
Samples: Merger Agreement (Conceptus Inc)
Conduct of Business by the Company Pending the Closing. The Company covenants and Each Seller agrees that, between the date of this Agreement and the earlier of Closing Date, unless Purchaser shall otherwise agree in writing, each Seller shall, and shall cause the Effective Time and Company to: (w) conduct the termination of this Agreement in accordance with Article 7, except as set forth in Section 5.1 business of the Company Disclosure Schedule, as required by any other provision of this Agreement or as required by applicable Law, unless Parent will otherwise agree in writing (which agreement will not be unreasonably withheld, delayed or conditioned), the Company will and will cause each Company Subsidiary to conduct its operations only in the ordinary course of business consistent with past practice practice; (x) pay and perform any of the Company's debts, obligations and Liabilities relating to the business and the Assets and Properties of the Company as and when due and the Contracts and other commitments relating to the business and the Assets and Properties of the Company in accordance with the terms and provisions thereof; (y) comply with all Laws and Orders that may be applicable to any of the business or the Assets and Properties of the Company; and (z) use commercially reasonable its best efforts to (i) keep available the services of the Employees and to preserve current relationships with corporate partners, customers, suppliers, manufacturers and other persons doing business with the Company in order to preserve substantially intact its the business organization of the Company. By way of amplification and (ii) maintain and preserve its assetsnot limitation, properties and positive material business relationships (including employees). Without limiting the foregoingeach Seller shall not, and as an extension thereof, except as set forth in Section 5.1 of shall cause the Company Disclosure Schedule, as required by any other provision of this Agreement or as required by applicable Law, the Company will not and will cause each Company Subsidiary not to (unless required by applicable Law)to, between the date of this Agreement and the Effective TimeClosing Date, directly or indirectly, dotake, or agree to dotake or allow, cause or permit any other Person to take, agree, agree to take or allow, cause or permit any of the following actions without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):Purchaser:
(a) amend the Company Charter or Company Bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect);
(b) issue, deliver, sell, pledge, dispose of, grant, transfer transfer, lease, license, guarantee or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease or encumbrance of, any shares of capital stock license of, or other Equity Interests inany Encumbrance on, the Company or and any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), the Assets and Properties of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards outstanding as of the date hereof in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylaws;
(c) sell, pledge, dispose of, transfer, lease, license or encumber any material property or assets of the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(d) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries) or enter into any agreement with respect to its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries);
(e) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interests;
(f) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stock) any interest in any business, division, organization or any Person (or any material portion of the assets thereof), other than (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become responsible for the obligations of any Person for borrowed money, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or where immaterial (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company both individually and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate) in both amount and significance;
(jb) acquire, other than in the ordinary business of the Company, any Assets and Properties, or acquire or make any loansarrangement to acquire any Inventory in excess of the amount of Inventory which, guaranteestogether with Inventory existing as of the date hereof, advances is necessary to fulfill firm purchase orders with delivery dates prior to the Closing Date, and obligations of the Company under long-term purchase contracts with delivery dates prior to the Closing Date, which, in each case, the Company is responsible for fulfilling prior to the Closing or capital contributions towhich the Company will be responsible for fulfilling after the Closing giving effect to the terms of this Agreement and the transactions contemplated hereby;
(c) engage with any Person in any merger, consolidation or other business combination transaction;
(d) violate, breach or default under in any material respect, or investments take or fail to take any action that (with or without notice or lapse of time or both) would constitute a material violation or breach of, or default under, any term or provision of any Business Contract, Business License, Real Property Lease or Personal Property Lease; or terminate, cancel or request any material change in, or agree to any material change in, any other Person in excess Business Contract, Business License, Real Property Lease and Personal Property Lease; or enter into or amend any Contract, that would constitute a Business Contract, Business License, Real Property Lease and Personal Property Lease and that, if fully performed, would not be permitted under this Section 5.01;
(e) make or authorize any capital expenditure with respect to the business of $5,000,000 in the aggregateCompany, other than (A) immaterial loans or advances to employees or independent contractors capital expenditures in the ordinary course of business consistent with past practice, (B) without prejudice practice that have been budgeted for the fiscal period in question and have heretofore been disclosed in writing to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practicePurchaser;
(kf) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,000;
(m) except to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to to, or the rate of vacation accrual of, any director, officer, employee or other service provider of the Company or any Company Subsidiary Employees; (except, in the case of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice), (Bii) grant any additional options to, grant any rights to severance or termination pay to, or enter into any employment or severance agreement which provides benefits upon a change in control of the Company that would be triggered by the transactions contemplated hereby or by the Ancillary Agreements with, any director, officer employee or other service provider of Employee who is not currently entitled to such benefits from the Company or any Company Subsidiary transactions contemplated hereby; (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (Ciii) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, termination employment, termination, severance or severance other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee Employee except to the extent required by applicable Law or other service provider the terms of a collective bargaining agreement in effect as of the Company date hereof; (iv) enter into or amend any Company Subsidiary Contract, commitment or arrangement with any of the Employees; or (exceptv) make any representation or promise, oral or written, to any Employee concerning any Benefit Plan, except for statements as to the rights or accrued benefits of any Employee under the terms of any Benefit Plan in effect as of the date hereof;
(xg) in the case of group health incur, cancel, pay, prepay, discharge or medical coverage subject to annual review satisfy any claim or Liability other than in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement)business;
(nh) hire engage in any transaction with respect to any of the Assets and Properties or appoint the business of the Company with any Company executive officer (as defined by Rule 3b-7 promulgated under officer, director, Affiliate or Associate of the Exchange Act) or director;
(o) forgive any loans to Service Providers Company, or any Associate of their respective affiliates;
(p) make any change in accounting policiessuch officer, practicesdirector or Affiliate, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in either outside the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agentsother than on an arm's-length basis;
(r) (i) make any change with respect to the Company's accounting policies, principles, methods or change procedures, including revenue recognition policies, other than as required by GAAP;
(j) make any material Tax election, (ii) adopt election or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent Tax liability relating to any extension or waiver the business of the statutory period Company or any of limitations applicable to any claim or assessment in respect the Assets and Properties of Taxes, or (vii) enter into any material Tax sharing or similar agreementthe Company;
(sk) terminate permit any insurance policy naming the Company as a beneficiary or modify a loss payee and relating to the business or any of the Assets or Properties of the Company to be cancelled, terminated or not renewed, except in the ordinary course of business;
(l) maintain the Books and Records of the Company relating either to the business or to any of the Assets and Properties of the Company in a manner not consistent with past business practices;
(m) take any action which would adversely affect the goodwill of the Company's suppliers, manufacturers, customers, licensees and others with whom it has business relations in connection with the business of the Company in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently appliedrespect; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(wn) authorize or enter into any Contract or otherwise make any commitment, in each case commitment to do any of the foregoing or to take any action which would make any of the representations or warranties in clauses (a) through (v)ARTICLE III untrue or incorrect in any material respect or prevent each Seller or the Company from performing or cause such Seller or the Company not to perform its covenants and agreements herein or result in any of the conditions to the Closing set forth herein not being satisfied.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as set forth in Section 5.1 6.01 of the Company Disclosure Schedule, Schedule or as required expressly contemplated by any other provision of this Agreement or as required by applicable LawAgreement, unless Parent will shall otherwise agree in writing writing, (which agreement will not be unreasonably withheld, delayed or conditioned), x) the respective businesses of the Company will and will cause each the Company Subsidiary to conduct its operations in Subsidiaries shall be conducted only in, and the Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practice and (y) the Company shall use commercially all reasonable efforts to (i) keep available the services of such of the current officers, significant employees and consultants of the Company and the Company Subsidiaries and to preserve the current relationships of the Company and the Company Subsidiaries with such of the corporate partners, customers, suppliers and other persons with which the Company or any Company Subsidiary has significant business relations in order to preserve substantially intact its business organization organization. By way of amplification and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees). Without limiting the foregoing, and as an extension thereofnot limitation, except as set forth in Section 5.1 6.01 of the Company Disclosure Schedule, Schedule or as required expressly contemplated by any other provision of this Agreement or as required by applicable LawAgreement, neither the Company will not and will cause each nor any Company Subsidiary not to (unless required by applicable Law)shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (Parent, which consent will shall not be unreasonably withheld, delayed withheld or conditioned):delayed:
(a) amend the Company Charter or Company Bylaws otherwise change its certificate of incorporation or bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)documents;
(b) issue, deliver, sell, pledge, dispose of, grant, transfer transfer, lease, license, guarantee or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license or encumbrance of, (i) any shares of capital stock of, or other Equity Interests in, of the Company or any Company Subsidiary of any class, or securities convertible into, into or exchangeable or exercisable for, for any shares of such capital stock or other Equity Interestsstock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securitiesstock, or any other ownership interest (including, without limitation, any such interest represented by Contract rightphantom interest), of the Company or any Company Subsidiary, other than Subsidiary except for (iA) the issuance of Shares upon the vesting, settlement or the exercise issuances of Company Accelerated Equity Awards Common Stock pursuant to options, warrants and convertible Company Capital Stock outstanding as of on the date hereof in accordance and disclosed as such pursuant to Section 4.03 and (B) employee stock option grants to non-officers and directors of the Company; provided, however, that (x) such grants are at fair market value and at a level consistent with their termspast practice, (iiy) transactions between Parent has received notice of the Company Company's intention to grant such options and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or has consented thereto in writing (iiiwhich consent shall not be unreasonably withheld) and (z) the issuance aggregate amount of such granted options does not exceed 25,000 shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylaws;
Stock, or (cii) sell, pledge, dispose of, transfer, lease, license or encumber any material property or assets of the Company or the any Company Subsidiaries Subsidiary;
(other than non-exclusive grants of Intellectual Property Rights in the ordinary course of businessc) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(d) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries) or enter into any agreement with respect to its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries);
(e) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interests;
(f) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any businesscorporation, divisionpartnership, other business organization or any Person (person or any material portion of the assets division thereof), other than (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or ; (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee incur any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise as an accommodation become responsible for for, the obligations of any Person for borrowed money, in each case other than (A) any indebtedness person for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,000;
(m) except to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice), (B) grant any additional rights to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, in each case to do any of the foregoing in clauses (a) through (v).
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. (a) The Company covenants and agrees that, between the date of this Agreement and the earlier to occur of the Effective Time and the termination of this Agreement pursuant to Section 7.1 and the Effective Time, except as expressly set forth in accordance Section 5.1(a) of the Company Disclosure Letter, as otherwise permitted or contemplated by this Agreement (including pursuant to Section 5.14), as required by applicable Law or as consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed), the Company will, and will cause each Company Subsidiary to, conduct its business in the ordinary course consistent with Article 7past practice and the Company and the Company Subsidiaries will use their reasonable best efforts to (x) preserve substantially intact the Company’s and the Company Subsidiaries’ business organization, (y) maintain existing relations with customers, suppliers, creditors and business partners and (z) keep available the services of its and the Company Subsidiaries’ current officers and employees. Without limiting the foregoing, except as set forth in Section 5.1 5.1(a) of the Company Disclosure ScheduleLetter, as otherwise permitted or contemplated by this Agreement (including pursuant to Section 5.14), as required by any other provision of this Agreement applicable Law or as required by applicable Law, unless Parent will otherwise agree consented to in writing by Parent (which agreement will such consent not to be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company will shall not, and will cause each shall not permit any Company Subsidiary to conduct its operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve substantially intact its business organization and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees). Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required by any other provision of this Agreement or as required by applicable Law, the Company will not and will cause each Company Subsidiary not to (unless required by applicable Law)to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, take any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):actions:
(ai) amend or otherwise change or propose to amend or change the Company Charter Articles of Incorporation or the Company Bylaws or equivalent organizational documents of the Company Subsidiaries;
(ii) issue, deliver, sell, pledge or otherwise encumber, or authorize, propose or agree to the issuance, delivery, sale, pledge, or encumbrance of, any Company Subsidiary shares of its capital stock or other Equity Interests, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of any class or series of its capital stock or other Equity Interests (other than routine amendments as permitted pursuant to Section 5.1(a)(xii) below or pursuant to (A) the Employee Stock Purchase Plan or the Company Deferred Compensation Plans (subject to the organizational documents requirements of any Section 2.4 and Section 2.5), or (B) the exercise, conversion or settlement of Company Subsidiary Options, Company Restricted Stock Units or Company Performance Shares in accordance with their terms in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respectpractice);
(b) issue, deliver, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards outstanding as of the date hereof in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylaws;
(c) sell, pledge, dispose of, transfer, lease, license or encumber any material property or assets of the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(d) declare, set aside, establish a record date for, make or pay any dividend or other distribution (whether payable in cash, stockEquity Interests, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as Interests, other than between the Company and its Subsidiaries or between the Company Subsidiaries) or enter into any agreement with respect to its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries);
(eiv) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire or offer to acquire, directly or indirectly, any of its capital stock or other Equity Interests, or authorize securities convertible or propose the issuance of exchangeable into or exercisable for any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interests, except as permitted pursuant to clause (xii) below, or pursuant to the “net exercise” of Company Options or to satisfy applicable tax withholding amounts upon the exercise or settlement of Company Options, Company Restricted Stock Units, Company Performance Shares or rights under the Company Deferred Compensation Plans;
(fv) merge or consolidate with other than transactions solely among any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectlyCompany and the Company Subsidiaries, acquire (including, without limitation, including by merger, consolidation, acquisition of assets consolidation or acquisition of stockEquity Interests or assets) any interest in any business, division, organization business or Person or any division or assets thereof, or make any loan, advance or capital contribution to, or investment in, any business or Person (or any material portion of the assets division thereof), other than (i) as required pursuant to the terms of except any existing Company Material Contract to which the Company such acquisitions, loans, advances, contributions or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, investments that are consistent with past practice and which acquisition is individually are for consideration not in excess of $10,000,0001,000,000 individually, or $2,500,000 for all such transactions by the Company and the Company Subsidiaries in the aggregate not aggregate, or investments of cash on hand in excess freely tradeable securities in the ordinary course of $20,000,000business consistent with past practices;
(hvi) enter into any new line other than borrowings under, or repayments of business that is material to principal and interest on, the Company;
(i) directly ’s existing revolving credit facility in the ordinary course of business, redeem, repurchase, or indirectlyprepay, incurdefease, assume cancel, incur or guarantee otherwise acquire, or modify the terms of, any indebtedness for borrowed money or issue or sell any debt securities (or options, warrants, calls or other rights to acquire any debt securities) , or assume, guarantee or endorse, or otherwise become responsible for for, the obligations of any Person for borrowed money, money in each case excess of $3,000,000 in the aggregate;
(vii) grant or authorize any Lien on any of its assets other than Permitted Encumbrances and Liens securing indebtedness permitted by Section 5.1(a)(vi);
(viii) enter into or materially amend or modify (other than extensions of one year or less at the end of a term in the ordinary course of business) any Company Material Contract or Material Real Property Lease or Contract that, if in effect on the date hereof, would have been a Company Material Contract, or terminate any such Contract, or waive, release or assign any rights or claims under any Company Material Contract or Material Real Property Lease;
(ix) without limitation of Section 5.2, sell, transfer, lease, sublease, license, assign, pledge, abandon or otherwise dispose of any: (A) owned Real Property, (B) material Company Intellectual Property, other than licenses of material Company Intellectual Property in the ordinary course of business, or (C) other assets, rights or properties of the Company or any indebtedness Company Subsidiary having a current value in excess of $1,000,000, other than, in the case of Subsection (C), sales of inventory or surplus equipment in the ordinary course of business;
(x) authorize, or make any commitment with respect to, any single capital expenditure in excess of $1,000,000 or capital expenditures for borrowed money incurred the Company and the Company Subsidiaries in excess of $3,000,000 in the aggregate, except for capital expenditures that are contemplated by the Company’s existing plan for annual capital expenditures for 2016 previously made available to Parent;
(xi) enter into any new line of business outside of its existing business segments;
(xii) (A) except to the extent required by applicable Law or any existing Company Plan or by written agreements existing on the date of this Agreement, grant or announce any stock option, equity or incentive awards or any material increase in the salaries, bonuses or other compensation and benefits payable by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course any executive officers, directors, employees, consultants or independent contractors of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregateSubsidiary, other than (A) immaterial loans or advances to employees or independent contractors than, in any case, in the ordinary course of business consistent with past practice, (B) without prejudice hire any new executive officer or promote any person to Section 5.1(i)an executive officer position, loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers except in the ordinary course of business consistent with past practice;
practice to replace an executive officer whose employment has terminated, (kC) terminatehire or promote any employee, cancel, modify consultant or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case independent contractor other than in the ordinary course of business consistent with past practice;
, (lD) make or authorize terminate the employment of any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of executive officer other than for cause (as reasonably determined by the Company Disclosure ScheduleBoard), other than capital expenditures that are not, in the aggregate, in excess of $5,000,000;
(mE) except to the extent required by (i) applicable Law, (ii) the Law or any existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence by written agreements existing on the date of this Agreement: (A) increase , pay or agree to pay any pension, retirement allowance, termination or severance pay not required by any existing Company Plan or other Contract in effect on the compensation or benefits payable or to become payable date of this Agreement to any director, officer, director or employee of the Company or any Company Subsidiary, (F) except to the extent required by applicable Law or any existing Company Plan or by written agreements existing on the date of this Agreement, pay or agree to pay any material bonus not required by any existing Company Plan or other service provider Contract in effect on the date of this Agreement to any officer, director or employee of the Company or any Company Subsidiary (exceptwhose current base salary exceeds $160,000, in the case of individuals who are not officers or directors, except for increases in connection agreements with promotions or periodic reviews in the ordinary course of business consistent with past practice), (B) grant any additional rights to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review newly hired employees in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable (G) except to the employee than is the case as of extent required by applicable Law or any existing Company Plan or by written agreements existing on the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to enter into or amend any Contracts of employment or any consulting, bonus, severance, retention, retirement or similar Contract for the benefit of any officer, director or employee of the Company or any Company Subsidiary, except for agreements for newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(nany executive officer) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief onpractice, or the admission of wrongdoing by, the Company, (H) except as required to ensure that any Company Subsidiary Plan is not then out of compliance with applicable Law, enter into or adopt any of their respective directorsnew, officersor materially increase benefits under any existing, employees or agentsCompany Plan;
(rxiii) except as may be required by GAAP or as a result of a change in Law, make any material change in accounting principles, policies, practices, procedures or methods;
(ixiv) change any material method of Tax accounting, make or change any material Tax election, (ii) adopt or change any annual Tax accounting period, settle any material Tax accounting methodAction, (iii) file amend any material amendment to a Tax ReturnReturns or file claims for material Tax refunds, (iv) enter into any material closing agreement with agreement, or surrender in writing any right to claim a Governmental Entity with respect to Taxesmaterial Tax refund, (v) settle offset or compromise any claim other reduction in Tax liability or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory limitation period of limitations applicable to any material Tax claim or assessment relating to the Company or a Company Subsidiary (provided that Parent’s consent shall be deemed given with respect to any such extension or waiver to the extent Parent fails to respond to a request for consent from the Company within twenty-four (24) hours of such request);
(xv) adopt or enter into a plan of complete or partial liquidation or dissolution of the Company or any Company Subsidiary;
(xvi) other than with respect to any Action contemplated by Section 5.7 (subject to compliance with Section 5.7), institute, settle or compromise any Actions pending or threatened before any arbitrator, court or other Governmental Entity involving the admission of liability or payment of monetary damages by the Company or any Company Subsidiary of any amount exceeding $500,000 in respect the aggregate, other than (A) any Action brought against Parent or Merger Sub arising out of Taxesa breach or alleged breach of this Agreement by Parent or Merger Sub, and (B) the settlement of claims, liabilities or obligations reserved against on the most recent balance sheet of the Company included in the Company SEC Filings, provided that neither the Company nor any Company Subsidiary shall settle or agree to settle any Action which settlement involves a conduct remedy or injunctive or similar relief or has a materially restrictive impact on the Company’s or any Company Subsidiary’s business;
(viixvii) enter into any material Tax sharing intercompany loan, advance or similar agreement;
(s) terminate capital contribution involving the Company or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, Company Subsidiary organized in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently appliedUnited States or the Netherlands (other than transactions solely among United States entities or transactions solely among non-United States entities); or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(vxviii) enter into any contractagreement, make any commitment or arrangement to take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, in each case to do any of the foregoing actions.
(b) Nothing contained in clauses (a) through (v)this Agreement is intended to give Parent, directly or indirectly, the right to control or direct the operations of the Company or any Company Subsidiary prior to the Effective Time. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective businesses and operations.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. (a) The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as set forth in Section 5.1 5.1(a) of the Company Disclosure Schedule, Schedule or as specifically required by any other provision of this Agreement or as required by applicable LawAgreement, unless Parent will shall otherwise agree in writing (which agreement will not be unreasonably withheld, delayed withheld or conditioneddelayed), the Company will will, and will cause each Company Subsidiary to to, (i) conduct its operations only in the ordinary and usual course of business consistent with the Company’s budgets, plans and past practice practice, (ii) use its commercially reasonable efforts to keep available the services of the current officers, key employees and consultants of the Company and each Company Subsidiary and preserve the goodwill and current relationships of the Company and each Company Subsidiary with customers, suppliers and other Persons with whom the Company or any Company Subsidiary has significant business relations, (iii) use commercially reasonable efforts to (i) preserve substantially intact its business organization organization, (iv) comply in all material respects with all applicable Laws and Orders and (iiv) maintain and preserve its assets, properties and positive material business relationships (including employees)use commercially reasonable efforts to protect the Company Intellectual Property. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 5.1(a) of the Company Disclosure Schedule, Schedule or as specifically required by any other provision of this Agreement or as Agreement, the Company shall not (unless required by applicable Law), the Company will and shall not and will cause each permit any Company Subsidiary not to (unless required by applicable Law), between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will not to be unreasonably withheld, delayed withheld or conditioneddelayed):
(ai) amend the Company Charter or Company Bylaws otherwise change its certificate of incorporation or bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)documents;
(bii) issue, deliver, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Convertible Notes or Company Accelerated Equity Awards Options, or settlement of Restricted Stock Units, outstanding as of the date hereof in accordance with their terms, terms (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock Rights in accordance with the terms of the Company Charter and Rights Agreement, if a “Section 8(a)(ii) Event” or “Section 10 Event” (each as defined in the Company BylawsRights Agreement) shall have occurred with respect to a Person other than Parent or the Purchaser or any of their respective affiliates);
(ciii) sell, pledge, dispose of, transfer, lease, license license, guarantee or encumber any material property encumber, or assets of authorize the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license license, guarantee or encumbrance is individually not of, any material property or assets (including without limitation Intellectual Property Rights and Technology) of the Company or any Company Subsidiary, except pursuant to existing Contracts or commitments or the sale or purchase of goods in excess the ordinary course of $10,000,000business consistent with past practice, or in enter into any commitment or transaction outside the aggregate not in excess ordinary course of $20,000,000business consistent with past practice;
(div) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between other than dividends paid by a Company Subsidiary to the Company and its Subsidiaries or between the Company SubsidiariesCompany) or enter into any agreement with respect to the voting or registration of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)stock;
(ev) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or stock, other Equity Interests, Interests or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interestssecurities;
(fvi) merge or consolidate the Company or any Company Subsidiary with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization of the Company or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable LawCompany Subsidiary;
(gvii) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization Person or any Person (division thereof or any material portion of the assets thereof)assets, other than (i) as required pursuant to the terms acquisitions of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or assets in the aggregate not in excess ordinary course of $20,000,000business consistent with past practice;
(hviii) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee incur any indebtedness for borrowed money (other than trade payables incurred in the ordinary course of business consistent with past practice) or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise as an accommodation become responsible for (whether directly, contingently or otherwise), the obligations of any Person for borrowed money, in each case (other than (Aa Company Subsidiary) any indebtedness for borrowed money incurred by (other than letters of credit or similar arrangements issued to or for the Company or any Company Subsidiary pursuant to the Existing Credit Facilities benefit of suppliers and manufacturers in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (ipractice); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(jix) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, (other than (Aa Company Subsidiary) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practicematerial amount;
(kx) terminate, cancel, modify or amend any Company Material Contractrenew, or cancelrequest or agree to any material amendment or modification to, modifychange in, amendor waiver under, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(lxi) make or authorize any capital expenditure in excess of $500,000 in the aggregate, other than as included in the Company’s capital expenditure budget set forth on Section 5.1(l) of as disclosed to Parent prior to the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,000date hereof;
(mxii) except to the extent required by (i) applicable LawLaw (including as may be reasonably necessary to comply with or exempt payment from Section 409A of the Code), (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan described in Section 3.12(a) of the Company Disclosure Schedule or Company CBA, (iii) this Agreement or (iv) contractual commitments or corporate policies with respect to severance or termination pay in existence on the date of this AgreementAgreement as disclosed in Section 3.12(a) of the Company Disclosure Schedule: (A) increase the compensation or benefits payable or to become payable to any directorits directors, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, employees (except for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practicepractice in salaries or wages of employees (other than officers) of the Company or any Company Subsidiary that do not result in a material increase in the aggregate compensation or benefits of the Company and the Company Subsidiaries), ; (B) grant any additional rights to severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or employee or other service provider of the Company or any Company Subsidiary (exceptSubsidiary, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, termination employment, termination, severance or severance other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officerofficer or employee, employee except to the extent required by the terms of a collective bargaining agreement in existence on the date of this Agreement; (C) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan; or (D) terminate the employment of the Company’s Chief Executive Officer, any senior executive reporting directly to the Chief Executive Officer as of the date of this Agreement or any other service provider of participant in the Company’s Change in Control Plan, as amended, or the Company’s Senior Executive Severance Plan;
(xiii) hire any Person for employment with the Company or any of Company Subsidiary (exceptA) at a level of “Assistant Vice President” or higher, (xB) for employment at a location outside of the United States or (C) at a level below “Assistant Vice President” if, after such hire, the average rate of employee hiring at or below such level would exceed ten employees per month for the period since the date of this Agreement, or the aggregate number of employees hired at or below such level since the date of this Agreement would be greater than forty;
(xiv) forgive any loans to directors, officers, employees or any of their respective affiliates;
(i) except as provided in this Agreement, pre-pay any long-term debt; (ii) waive, release, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the case ordinary course of group health business consistent with past practice and in accordance with their terms; (iii) accelerate or medical coverage subject to annual review delay collection of notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, actions that would not increase the cost ; (iv) delay or accelerate payment of such group health any account payable in advance of its due date or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments such liability would have been paid in the ordinary course of business that are not consistent with past practice; or (v) vary its inventory practices in any material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement)respect from past practices;
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(pxvi) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accountsprocedures, other than as required by GAAP or by applicable Lawa Governmental Entity;
(qxvii) waive, release, assign, commence, settle or compromise any material claims;
(xviii) compromise, settle or agree to settle any Proceeding suit, action, claim, proceeding or investigation (including without limitation any Proceeding suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 500,000 individually or $10,000,000 1,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, Company or any Company Subsidiary or any of their respective directors, officers, employees or agentsSubsidiary;
(r) (ixix) make or change any material Tax election, election (iiother than routine Tax elections made in the ordinary course of business consistent with past practice) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material liability for Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(sxx) terminate amend, modify or modify in any material respect any Insurance Policywaive, or fail propose to maintain amend, modify or waive, or otherwise take any Insurance Policy with at least substantially action under, the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance PolicyCompany Rights Agreement;
(txxi) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,0001,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(vxxii) enter into any contract, exempt or make any commitment Person (other than Parent, the Purchaser and any Parent Subsidiary) or any action taken by such Person not subject to (i) the provisions of Section 203 of the DGCL, (ii) any other state takeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares or (iii) the Company Rights Agreement;
(xxiii) take any action that requires consent of Apollo Global Management, LLC is intended or any of its affiliates pursuant would reasonably be expected to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, result in each case to do any of the foregoing conditions to the Offer set forth in clauses (a) through (v).Annex I or the conditions to the Merger set forth in Article 6 not being satisfied;
Appears in 1 contract
Samples: Merger Agreement (Lilly Eli & Co)
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and or the termination of this Agreement in accordance with Article 7Agreement, except as set forth in Section 5.1 6.1 of the Company Disclosure ScheduleSchedule or as specifically required or permitted by this Agreement or required by Law, unless Acquiror shall otherwise consent thereto in writing, the Company shall, and shall cause each of its Subsidiaries to: conduct its operations only in the ordinary and usual course of business consistent with past practice and, to the extent consistent therewith, use its reasonable best efforts to preserve intact its business organizations and maintain its rights, franchises and existing goodwill and relations with customers, suppliers, creditors, lessors, lessees, employees and business associates. In addition, the Company shall not, and shall not permit its Subsidiaries to, take any action that the Company knows, at the time it prepares to take or takes such action, would (i) materially adversely affect or delay the ability of the Company or Acquiror to perform any of their respective material obligations in a timely basis under this Agreement or (ii) have a Material Adverse Effect with respect to the Company. By way of amplification and not limitation, except as set forth in Section 6.1 of the Company Disclosure Schedule or as specifically required or permitted by any other provision of this Agreement or as required by applicable Law, unless Parent will otherwise agree in writing (which agreement will not be unreasonably withheld, delayed or conditioned), the Company will and will cause each Company Subsidiary to conduct its operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve substantially intact its business organization and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees). Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required by any other provision of this Agreement or as required by applicable Law, the Company will not and will cause each Company Subsidiary not to (unless required by applicable Law), between the date of this Agreement and the earlier of the Effective TimeTime or the termination of this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):Acquiror:
(a) amend the Company Charter or Company Bylaws otherwise change its certificate of incorporation or bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)documents;
(b) issue, deliver, sell, pledge, dispose of, grant, transfer or transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, of any shares of capital stock or Rights of, or other Equity Interests in, the Company or any Company Subsidiary of its Subsidiaries of any class, or securities convertible into, or exchangeable or exercisable for, for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract contract right), of the Company or any Company Subsidiaryof its Subsidiaries, other than (ix) the issuance of Shares Company Common Stock pursuant to the Company’s DRIP and/or 401(K) Plan, (y) the issuance of Company Common Stock upon the vesting, settlement exercise or the exercise conversion of Company Accelerated Equity Awards Options outstanding as of the date hereof in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries terms or (iiiz) the issuance granting of options to purchase up to 25,000 shares of Company Common Stock upon in the conversion aggregate in the ordinary course of shares of Company Preferred Stock in accordance business consistent with the Company Charter and Company Bylawspast practice;
(c) sell, pledge, dispose of, transfer, lease, license license, guarantee or encumber any material property encumber, or assets of authorize the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license license, guarantee or encumbrance is individually not in excess of, any material property or assets (including Intellectual Property) of $10,000,000the Company or deposits of the Company Bank, except pursuant to existing Contracts or commitments or the sale or purchase of goods or the pledge of securities in the aggregate not in excess ordinary course of $20,000,000business consistent with past practice;
(d) other than regular quarterly dividends on Company Shares of $0.15 per Company Share, declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries) or enter into any agreement with respect to its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)stock;
(e) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock stock, other Equity Interests or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interests;
(f) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stock) any interest in any business, division, organization or any Person (or any material portion of the assets thereof)securities, other than (i) as required the repurchase of Company Shares following termination of employment with, or provision of services to, the Company or any Subsidiary, pursuant to the terms of any Company Option or agreement existing Company Material Contract on the date of this Agreement pursuant to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms shares of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to restricted stock were issued by the Company;
(if) enter into any agreement or otherwise agree to acquire, directly or indirectlyindirectly (whether by merger or consolidation, incuracquisition of stock or assets or by formation of a joint venture or otherwise), assume any business or guarantee any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or any interest therein;
(g) incur any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) trust preferred securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for for, the obligations of any Person person (other than a wholly owned Subsidiary of the Company) for borrowed money, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company deposits, federal funds borrowings and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan borrowings from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside Federal Home Loan Bank of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers San Francisco in the ordinary course of business consistent with past practice;
(h) make any loan, loan commitment or renewal or extension thereof to any person which would, when aggregated with all outstanding loans, commitments for loans or renewals or extensions thereof made to such person and any affiliate or immediate family member of such person, exceed $3,000,000 without submitting complete loan package information customarily submitted to the board of directors of the Company or applicable Subsidiary or the loan committee of the Company or applicable Subsidiary in connection with obtaining approval of such action to the chief credit officer of Acquiror for review with a right of comment at least one (1) full Business Day prior to taking such action; provided, that, if Acquiror objects in writing to such loan or loan commitment or renewal or extension thereof prior to the end of such Business Day, the Company or applicable Subsidiary shall obtain the approval of a majority of the members of the board of directors of the Company or applicable Subsidiary or the loan committee, as the case may be, prior to making such loan or loan commitment or renewal or extension thereof (for the sake of clarity, the issuance of or the commitment to issue a letter of credit by the Company or applicable Subsidiary on behalf of or for the benefit of a third party shall constitute a loan or loan commitment under this clause);
(i) other than in securities transactions as provided in (ii) below and purchases of DPC assets, make any investment either by contributions to capital, property transfers or purchase of any property or assets of any person and (ii) other than purchases of (w) direct obligations of, or obligations secured by the full faith and credit of, the United States of America with a remaining maturity at the time of purchase of one year or less, (x) securities issued by U.S. Government Agencies, (y) federal funds, or (z) certificates of deposits of any commercial bank, purchase or acquire securities of any type; provided, however, that in the case of investment securities, the Company or applicable Subsidiary may purchase investment securities if, within one (1) Business Day after the Company requests in writing (which request shall describe in reasonable detail the investment securities to be purchased and the prices thereof) that Acquiror consent to the making of any such purchase, Acquiror has approved such request in writing or has not responded in writing to such request;
(j) except as required by applicable law or regulation or the FRB, FDIC or DFI, (i) implement or adopt any material change in its interest rate and other risk management policies, procedures or practices, (ii) fail to follow in any material respect its existing policies or practices with respect to managing its exposure to interest rate and other risk or (iii) fail to use commercially reasonable means to avoid any material increase in its aggregate exposure to interest rate risk;
(k) take any action or omit to take any action that may result, individually or in the aggregate with any other actions or omissions, in a material violation of the Bank Secrecy Act, the anti-money laundering laws and regulations or the policies and procedures of the Company or any of its Subsidiaries with respect to the foregoing;
(l) terminate, cancel, modify cancel or amend request any Company Material Contractchange in, or cancel, modify, amend, release, assign or waive agree to any rights or claims under any Company Material Contractchange in, or enter into any contract or amend any Contract thatagreement that calls for aggregate annual payments of $25,000 or more and which is not terminable at will or with 30 days or less notice without payment of a premium or penalty, if existing on the date hereof, would be a Company Material Contract, in each case other than loans and loan participations in the ordinary course of business and consistent with past practicepractice and in accordance with Section 6.1(h);
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,000;
(m) except to the extent required by (i) applicable Lawenter into, (ii) the existing terms renew or allow to renew automatically, make any new grants of awards under, amend or otherwise modify any Company Benefit Planemployment, Foreign Benefit Plan or Company CBAconsulting, (iii) this Agreement or (iv) contractual commitments with respect to transition, termination, severance or termination pay in existence on the date of this Agreement: (A) similar agreements or arrangements or increase the compensation or benefits payable or to become payable to any directorits directors, officer, employee officers or employees other service provider of the Company or any Company Subsidiary (except, than increases in the case of individuals compensation for employees who are not officers or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business and consistent with past practice), provided that no such increase or increases shall result in an annual adjustment of more than 3% in the aggregate cash compensation that is payable to all employees as a group; (Bii) grant or increase any additional rights to severance or termination pay to, or enter into any employment or severance agreement with, any director, officer employee or other service provider employee of the Company or any Company Subsidiary (exceptof its Subsidiaries, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, termination employment, termination, severance or severance other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officerofficer or employee, except to the extent required by applicable Law or this Agreement; or (iii) take any affirmative action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan, other than as expressly permitted by this Agreement; and provided, further, however, that nothing in this Section 6.1 shall prohibit the Company or Company Bank from (y) awarding and paying bonus compensation in accordance with the terms and conditions of its 2005 management performance plan as in existence on the date hereof and accrued in accordance with GAAP, and (z) adopting and subsequently implementing annual or quarterly incentive compensation programs for fiscal 2006 for their officers and employees consistent with their past practice, so long as the Company provides Acquiror at least three (3) business days prior written notice of the intended adoption of, and consults with Acquiror concerning, such program or programs for fiscal 2006.
(n) hire any person as an employee or other service provider of the Company or any of its Subsidiaries or promote any employee, except (i) to satisfy contractual obligations existing as of the date hereof and set forth in Schedule 3.11 of the Company Subsidiary (exceptDisclosure Schedule, (xii) in persons hired to fill any vacancies arising after the date hereof and whose employment is terminable at the will of the Company or applicable Subsidiary upon and after the consummation of the Holding Company Merger or Bank Merger, as the case may be, and (iii) any person hired to fill a newly created position with the Company or the Company Bank if such person’s base salary and any guaranteed bonus, in each case considered on an annual basis, will not exceed $75,000 during his or her first year of group health employment;
(o) accelerate the payment of any material liabilities or medical coverage subject to annual review obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health ;
(p) materially change any actuarial or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable other assumptions used to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material calculate funding obligations with respect to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as contemplated may be required by this Agreement)GAAP, ERISA or the express terms of any such plan;
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(oq) forgive any loans to Service Providers directors, officers or employees of the Company or any of their respective affiliatesits Subsidiaries;
(pr) make any material change in accounting policiespolicies or procedures, practices, principles, methods or procedures or payment or collection of accounts, other than except as required by GAAP or by applicable Lawa Governmental Entity;
(qs) waive, release, assign, commencesettle or compromise any material claims, compromiseor any material litigation or arbitration for an amount in excess of $50,000, individually, or $100,000 in the aggregate or which would impose any material restriction on the business of the Company or Acquiror or any of their Subsidiaries or would reasonably be expected to create precedent for claims that are reasonably likely to be material to the Company or Acquiror or any of their Subsidiaries;
(t) make any material tax election, settle or agree to settle compromise any Proceeding (including material liability for Taxes, amend any Proceeding relating to this Agreement Tax Return or the transactions contemplated hereby) file any refund for Taxes, other than compromises, settlements or agreements in the ordinary course of business or as may be required by a Governmental Entity;
(u) make any capital expenditures other than capital expenditures in the ordinary and usual course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) in amounts not in excess of exceeding $5,000,000 25,000 individually or $10,000,000 500,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract agreement or otherwise make any commitment, in each case commitment to do any of the foregoing in clauses (a) through (v)foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. (a) The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as set forth in Section 5.1 5.1(a) of the Company Disclosure Schedule, Schedule or as specifically required by any other provision of this Agreement or as required by applicable LawAgreement, unless Parent will shall otherwise agree in writing (which agreement will not be unreasonably withheld, delayed withheld or conditioneddelayed), the Company will will, and will cause each Company Subsidiary to to, (i) conduct its operations only in the ordinary and usual course of business consistent with the Company’s budgets, plans and past practice practice, (ii) use its commercially reasonable efforts to keep available the services of the current officers, key employees and consultants of the Company and each Company Subsidiary and preserve the goodwill and current relationships of the Company and each Company Subsidiary with customers, suppliers and other Persons with whom the Company or any Company Subsidiary has significant business relations, (iii) use commercially reasonable efforts to (i) preserve substantially intact its business organization organization, (iv) comply in all material respects with all applicable Laws and Orders and (iiv) maintain and preserve its assets, properties and positive material business relationships (including employees)use commercially reasonable efforts to protect the Company Intellectual Property. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 5.1(a) of the Company Disclosure Schedule, Schedule or as specifically required by any other provision of this Agreement or as Agreement, the Company shall not (unless required by applicable Law), the Company will and shall not and will cause each permit any Company Subsidiary not to (unless required by applicable Law), between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will not to be unreasonably withheld, delayed withheld or conditioneddelayed):
(ai) amend the Company Charter or Company Bylaws otherwise change its certificate of incorporation or bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)documents;
(bii) issue, deliver, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Convertible Notes or Company Accelerated Equity Awards Options, or settlement of Restricted Stock Units, outstanding as of the date hereof in accordance with their terms, terms (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock Rights in accordance with the terms of the Company Charter and Rights Agreement, if a “Section 8(a)(ii) Event” or “Section 10 Event” (each as defined in the Company BylawsRights Agreement) shall have occurred with respect to a Person other than Parent or the Purchaser or any of their respective affiliates);
(ciii) sell, pledge, dispose of, transfer, lease, license license, guarantee or encumber any material property encumber, or assets of authorize the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license license, guarantee or encumbrance is individually not of, any material property or assets (including without limitation Intellectual Property Rights and Technology) of the Company or any Company Subsidiary, except pursuant to existing Contracts or commitments or the sale or purchase of goods in excess the ordinary course of $10,000,000business consistent with past practice, or in enter into any commitment or transaction outside the aggregate not in excess ordinary course of $20,000,000business consistent with past practice;
(div) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between other than dividends paid by a Company Subsidiary to the Company and its Subsidiaries or between the Company SubsidiariesCompany) or enter into any agreement with respect to the voting or registration of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)stock;
(ev) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or stock, other Equity Interests, Interests or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interestssecurities;
(fvi) merge or consolidate the Company or any Company Subsidiary with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization of the Company or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable LawCompany Subsidiary;
(gvii) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization Person or any Person (division thereof or any material portion of the assets thereof)assets, other than (i) as required pursuant to the terms acquisitions of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or assets in the aggregate not in excess ordinary course of $20,000,000business consistent with past practice;
(hviii) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee incur any indebtedness for borrowed money (other than trade payables incurred in the ordinary course of business consistent with past practice) or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise as an accommodation become responsible for (whether directly, contingently or otherwise), the obligations of any Person for borrowed money, in each case (other than (Aa Company Subsidiary) any indebtedness for borrowed money incurred by (other than letters of credit or similar arrangements issued to or for the Company or any Company Subsidiary pursuant to the Existing Credit Facilities benefit of suppliers and manufacturers in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (ipractice); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(jix) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, (other than (Aa Company Subsidiary) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practicematerial amount;
(kx) terminate, cancel, modify or amend any Company Material Contractrenew, or cancelrequest or agree to any material amendment or modification to, modifychange in, amendor waiver under, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(lxi) make or authorize any capital expenditure in excess of $500,000 in the aggregate, other than as included in the Company’s capital expenditure budget set forth on Section 5.1(l) of as disclosed to Parent prior to the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,000date hereof;
(mxii) except to the extent required by (i) applicable LawLaw (including as may be reasonably necessary to comply with or exempt payment from Section 409A of the Code), (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan described in Section 3.12(a) of the Company Disclosure Schedule or Company CBA, (iii) this Agreement or (iv) contractual commitments or corporate policies with respect to severance or termination pay in existence on the date of this AgreementAgreement as disclosed in Section 3.12(a) of the Company Disclosure Schedule: (A) increase the compensation or benefits payable or to become payable to any directorits directors, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, employees (except for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practicepractice in salaries or wages of employees (other than officers) of the Company or any Company Subsidiary that do not result in a material increase in the aggregate compensation or benefits of the Company and the Company Subsidiaries), ; (B) grant any additional rights to severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or employee or other service provider of the Company or any Company Subsidiary (exceptSubsidiary, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, termination employment, termination, severance or severance other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officerofficer or employee, employee except to the extent required by the terms of a collective bargaining agreement in existence on the date of this Agreement; (C) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan; or (D) terminate the employment of the Company’s Chief Executive Officer, any senior executive reporting directly to the Chief Executive Officer as of the date of this Agreement or any other service provider of participant in the Company’s Change in Control Plan, as amended, or the Company’s Senior Executive Severance Plan;
(xiii) hire any Person for employment with the Company or any of Company Subsidiary (exceptA) at a level of “Assistant Vice President” or higher, (xB) for employment at a location outside of the United States or (C) at a level below “Assistant Vice President” if, after such hire, the average rate of employee hiring at or below such level would exceed ten employees per month for the period since the date of this Agreement, or the aggregate number of employees hired at or below such level since the date of this Agreement would be greater than forty;
(xiv) forgive any loans to directors, officers, employees or any of their respective affiliates;
(i) except as provided in this Agreement, pre-pay any long-term debt; (ii) waive, release, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the case ordinary course of group health business consistent with past practice and in accordance with their terms; (iii) accelerate or medical coverage subject to annual review delay collection of notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, actions that would not increase the cost ; (iv) delay or accelerate payment of such group health any account payable in advance of its due date or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, such liability would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements have been paid in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments practice; or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify vary its inventory practices in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policyfrom past practices;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, in each case to do any of the foregoing in clauses (a) through (v).
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between From the date of this Agreement and hereof until the earlier of the Effective Time Closing Date and the termination of this Agreement in accordance with Article 7VII, except (a) as expressly required hereunder, (b) as required by applicable Law, (c) if Parent shall have expressly consented in advance in writing (such consent not to be unreasonably withheld, conditioned or delayed), or (d) as set forth in on the correspondingly numbered subsection of Section 5.1 of the Company Disclosure Schedule, as required by any other provision of this Agreement or as required by applicable Law, unless Parent will otherwise agree in writing (which agreement will not be unreasonably withheld, delayed or conditioned), i) the Company will shall, and will shall cause each Company Subsidiary its Subsidiaries to, use commercially reasonable efforts to (x) conduct its operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (iy) (A) preserve substantially the goodwill of the Company and its Subsidiaries and keep intact their respective material assets, properties and Contracts; (B) keep available the services of its current officers and key employees; and (C) preserve the current relationships with customers, suppliers, distributors, lessors, licensors, licensees, creditors, contractors, Governmental Entities and other persons with whom the Company or any of its Subsidiaries has business organization relations, and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees). Without limiting the foregoingCompany shall not, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required by any other provision of this Agreement or as required by applicable Law, the Company will shall cause its Subsidiaries not and will cause each Company Subsidiary not to (unless required by applicable Law), between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):to:
(a) amend the Company Charter or Company Bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect);
(b) issue, deliver, sell, pledgedistribute, dispose ofassign, transfer, grant, transfer or encumber, or authorize the issuance, sale, pledge, dispositionhypothecate, grant, transfer, dispose of or encumbrance of, otherwise encumber any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of its Subsidiaries or any class, or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), securities of the Company or any Company Subsidiaryof its Subsidiaries, other than (ix) incurring Liens required pursuant to and in accordance with the terms of the Company Credit Facility and the Company Notes Indenture or (y) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards outstanding as of the date hereof or in connection with the grant or settlement of Company Awards granted after the date hereof not in violation of this Agreement, in each case, in accordance with their terms, ;
(iib) transactions between merge or consolidate the Company and a wholly-owned Company Subsidiary or between wholly-owned Company any of its Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylawsany Person;
(c) sell, pledge, dispose of, transfer, lease, license or encumber acquire any material property or assets of the Company or the Company Subsidiaries (other than non-exclusive grants acquisitions of Intellectual Property Rights inventory held for sale or used, in each case in the ordinary course of business) except pursuant to or any other Person or business of any other Person (iwhether by merger or consolidation, acquisition of stock or assets or by formation of a joint venture or otherwise) or make any Company Material Contract investment in effect as any Person, other than (A) an investment in any wholly owned Subsidiary of the date of this Agreement Company or (iiB) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license acquisitions or encumbrance is investments for consideration not to exceed $25,000,000 individually not in excess of or $10,000,000, or 100,000,000 in the aggregate not in excess of $20,000,000aggregate;
(d) declareeffect any recapitalization, set asidereclassification, make in-kind dividend, equity split or pay any dividend or other distribution similar change in capitalization (whether payable in cash, stock, property or a combination thereof) except with respect to any wholly owned Subsidiary of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries) or enter into any agreement with respect to its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiariesthat remains wholly owned following such transaction);
(e) reclassifyamend their certificates or articles of incorporation or limited liability company agreements (or equivalent organizational documents);
(f) make, adjust, combine, split, subdivide declare or amend the terms ofpay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock stock, or any other Equity Interests;
securities or obligations convertible (fwhether currently convertible or convertible only after the passage of time or the occurrence of certain events) merge into or consolidate exchangeable for any shares of its capital stock, except for (A) any dividends or distributions from a wholly owned Subsidiary to another wholly owned Subsidiary or the Company, (B) the acceptance of Shares, or withholding of Shares otherwise deliverable, to satisfy withholding Taxes incurred in connection with any Person or adopt a plan the exercise, vesting and/or settlement of complete or partial liquidation or resolutions providing for a complete or partial liquidationCompany Awards, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition and (C) the acquisition of Shares in bankruptcy or consent to connection with the filing forfeiture of any bankruptcy petition under any applicable LawCompany Awards not in violation of this Agreement and in accordance with their terms;
(g) directly make any redemption or indirectly, acquire purchase of any Equity Interests (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stock) any interest in any business, division, organization or any Person (or any material portion of the assets thereof), other than (iany Company Awards) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000its Subsidiaries;
(h) enter into sell, assign, transfer, convey, lease or otherwise dispose or create any new line material Lien on any of business that is material to the Company;
(i) directly ’s or indirectlyits Subsidiaries’ assets or properties, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become responsible for the obligations of any Person for borrowed money, in each case other than except (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities Permitted Liens, (B) in the ordinary course of business consistent with past practice practice, (C) sales or (B) any indebtedness for borrowed money (dispositions of assets that are obsolete, worn out, surplus or any guarantee no longer used or useful in the conduct of such indebtedness) solely between the business of the Company and a its Subsidiaries, or (D) any such transactions solely by and among the Company and its wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregateSubsidiaries;
(ji) make sell, assign, transfer, abandon or exclusively license any loansCompany Intellectual Property material to the Company and its Subsidiaries, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregatetaken as a whole, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice for the sale of obsolete assets or (C) pursuant to Section 5.1(i), loans solely between Contracts existing as of the date hereof set forth in the Company Disclosure Schedule;
(j) enter into any Affiliate Contracts;
(k) knowingly disclose any Trade Secrets or material confidential information of the Company and its wholly-Subsidiaries to any Person, other than in the ordinary course of business consistent with past practice, to Persons who are under a contractual, legal, or ethical obligation to maintain the confidentiality of such information;
(l) make any capital investment in, or any capital contribution or loan or advance to, or guaranty for the benefit of, any Person that (i) is not a wholly owned Subsidiaries or between Subsidiary (except as required by the organizational documents of the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, Subsidiaries in effect as of the date hereof) or (ii) is a wholly owned Subsidiary (except in the ordinary course of business consistent with past practice);
(m) make capital expenditures or commitments that are, in the aggregate and on an annualized basis for the preceding twelve (12) months at any time, more than 110% of the Target Capital Expenditures;
(n) (i) incur more than $50,000,000 of indebtedness, other than (A) borrowings or credit extensions under the Company Credit Facility (including in respect of letters of credit) for working capital and general corporate purposes in an amount not to exceed, in the aggregate, the available borrowing amount under such existing agreements as in effect on the date hereof, (B) indebtedness between or among the Company and its wholly owned Subsidiaries in the ordinary course of business consistent with past practice, (C) guarantees by the Company or its wholly owned Subsidiaries of indebtedness of the Company or its wholly owned Subsidiaries, which indebtedness is incurred in compliance with this Section 5.1, (D) indebtedness arising solely from a change in GAAP, (E) refinancing indebtedness incurred in connection with the refinancing of any indebtedness or revolving facility or line of credit existing on and as in effect on the date of this Agreement (including under the Company Credit Facility), (F) letters of credit, bank guarantees, security or performance bonds or similar credit support instruments, overdraft facilities or cash management programs, in each case issued, made, entered into or drawn in the ordinary course of business consistent with past practice, or (ii) amend the terms of the documentation governing any indebtedness existing on the date of this Agreement in a manner that would be adverse to the Company and its Subsidiaries, taken as a whole, other than (A) at the request of Parent or Merger Sub or (B) with respect to any supplement or delivery required under such documentation as in effect on the date hereof; provided that any indebtedness incurred other than pursuant to the foregoing clauses (i)(A) through (i)(F) shall (x) be on current market terms for such type of indebtedness (as determined by the Company in good faith) and (y) not contain any provisions under which loanthe consummation of the Transactions could result in any acceleration, guaranteeevent of default or similar consequence (including as a result of the identity of Parent, advance Merger Sub, the SCP Persons, the BCI Persons, the Guarantors and their respective affiliates) thereunder; provided, further, that prior to the consummation of any individual transaction resulting in the incurrence by the Company or capital contribution is individually not any of its Subsidiaries of indebtedness in excess of $10,000,0005,000,000 (other than indebtedness incurred pursuant to the foregoing clauses (i)(A) through (i)(F)), the Company shall provide Parent a reasonable opportunity to review the terms of the definitive documentation of such transaction, and shall consider in good faith any comments of Parent with respect thereto.
(o) (i) except as required by the terms of any Company Benefit Plan as in effect on the date hereof or as adopted, amended or modified after the date hereof, in each case not in violation of this Agreement or any Collective Bargaining Agreement, (A) increase the compensation or benefits payable or provided (or that may become payable or provided) to any current or former employee or individual service provider of the Company, (B) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of any compensation or benefits, (C) grant any new equity-based or other long-term incentive awards, amend or modify the terms of any outstanding equity-based or other long-term incentive awards, pay any incentive or performance-based compensation or benefits at a level greater than the level earned based on actual performance through the end of the applicable performance period as determined by the Company in the aggregate not in excess ordinary course of $20,000,000 and business consistent with past practice, (D) extended payment pay or agree to pay to any current or former employee or individual service provider any severance, retention, change in control compensation, pension, retirement allowance or other benefit not required by the terms of any Company Benefit Plan existing as of the date hereof, (E) establish any Company Benefit Plan that was not in existence prior to the date of this Agreement, excluding any At-Will Independent Contractor Agreement or employee offer letter that is terminable at any time by the Company without notice and without further liability and does not provide any change in control or severance or notice payments or benefits, or amend or terminate any Company Benefit Plan in existence on the date of this Agreement, or (F) hire or promote any employee or terminate the employment of any employee (other than “for customers cause”, as determined by the Company in good faith and in the ordinary course of business consistent with past practice), other than the hiring, promoting or terminating of any employee with an annual aggregate target cash compensation (consisting of the sum of annual base salary and target annual bonus) less than $425,000 in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,000;
(m) except to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice), (B) grant any additional rights to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) (i) make make, change or revoke any material Tax election or adopt or change any material annual Tax election, (ii) adopt accounting period or change any material Tax accounting method, (iiiii) file amend any material amendment to a Tax Return, (iviii) enter into any closing agreement with a Governmental Entity with respect to any material Taxes, (iv) request any ruling from any Governmental Entity with respect to material Taxes, (v) settle any material Tax claim, audit or compromise any claim or assessment in respect of material Taxesassessment, (vi) consent agree to any an extension or waiver of the statutory period statute of limitations applicable with respect to any claim or assessment material Taxes (except in respect the ordinary course of Taxes, business) or (vii) surrender any right to claim a refund, offset or other reduction of material Taxes;
(q) settle, release, waive or compromise any existing or pending or threatened Proceeding if such settlement, release, waiver or compromise (i) with respect to the payment of monetary damages, involves the payment of monetary damages exceeding $1,000,000 individually or $5,000,000 in the aggregate, (ii) with respect to any non-monetary terms and conditions therein, imposes or requires actions that would or would be reasonably expected to be material to the Company and its Subsidiaries, taken as a whole, (iii) involves an admission of guilt or liability by the Company or any of its Subsidiaries, or (iv) with respect to any Proceeding set forth on Section 5.1(q) of the Company Disclosure Schedule;
(r) (i) terminate or materially amend any Company Material Contract, other than any renewal (including renewals technically effected by re-execution thereof upon expiration) or expiration in the ordinary course of business of such Company Material Contract in accordance with the terms of such Company Material Contract and (in the case of renewals) on substantially the same terms, (ii) enter into any Contract that, if entered into prior to the date of this Agreement, would be a Company Material Contract of the type set forth in clauses (i)(B), (iii), (v), (vi), (viii), (ix), (x) or (xiii) (other than, in the case of clause (xiii), any such Contract governing indebtedness for borrowed money or with an officer of the Company) of Section 3.16(a) (or, except in the ordinary course of business consistent with past practice, of any other type), or take any of the actions set forth in clauses (i) or (iii) hereof with respect to any Contract that, if entered into prior to the date of this Agreement, would be a Company Material Contract, or (iii) waive any material Tax sharing right under or similar agreementrelease, settle or compromise any material claim under any Company Material Contract;
(s) terminate participate in or modify enter into any Contracts in respect of any material respect programs sponsored or financed by any Insurance Policy, or fail Governmental Entities that obligate the Company to maintain any Insurance Policy with at least substantially incur annual expenses in excess of $10 million in the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policyaggregate;
(t) write up, write down or write off except as required by the book value terms of any tangible assetsCollective Bargaining Agreement, in (i) modify, renew, extend, or enter into any collective bargaining agreement or other Contract with any labor union, labor organization, works council or other employee representative body or (ii) recognize or certify any labor union, labor organization, works council, or other employee representative body as the aggregate, in excess bargaining representative for any employees of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; orthe Company or its Subsidiaries;
(u) engage in adopt a plan or agreement of complete or partial liquidation or dissolution of the Company or any transactionsof its Subsidiaries, arrangements except for the liquidation or understandings with dissolution of any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Actdormant Subsidiary;
(v) enter into any contractnew line of business material to the Company and its Subsidiaries, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designationtaken as a whole;
(w) authorize or enter into any Contract or otherwise the Company shall not fail to comply with Section 5.1(ii)(w) of the Company Disclosure Schedule; or
(x) agree to take, make any commitmentcommitment to take, or adopt any resolutions in each case to do support of, any of the foregoing actions prohibited by this Section 5.1. Without limiting the scope of covenants of the Company set forth in clauses this Section 5.1, the parties hereto acknowledge and agree that (aA) through nothing contained in this Section 5.1 is intended to give Parent, directly or indirectly, the right to direct the control or operations of the Company or any of its Subsidiaries prior to the Closing and (v)B) prior to the Closing, subject to this Section 5.1, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over the operations of itself and its Subsidiaries.
Appears in 1 contract
Samples: Merger Agreement (Consolidated Communications Holdings, Inc.)
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as set forth in Section 5.1 5.01 of the Company Disclosure Schedule, Schedule or as required contemplated by any other provision of this Agreement or as required by applicable LawAgreement, unless Parent will otherwise agree shall consent in writing (writing, which agreement will consent shall not be unreasonably withheldwithheld or delayed, delayed or conditioned), (1) the businesses of the Company will and will cause each the Company Subsidiary to conduct its operations in Subsidiaries shall be conducted only in, and the Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practice and (2) the Company shall use commercially its reasonable best efforts to (i) keep available the services of such of the current officers, significant employees and consultants of the Company and the Company Subsidiaries and to preserve the current relationships of the Company and the Company Subsidiaries with such of the customers, suppliers and other persons with which the Company or any Company Subsidiary has significant business relations in order to preserve substantially intact its business organization organization. By way of amplification and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees). Without limiting the foregoing, and as an extension thereofnot limitation, except as set forth in Section 5.1 5.01 of the Company Disclosure Schedule, Schedule or as required contemplated by any other provision of this Agreement or as required by applicable LawAgreement, the Company will not shall not, and will shall neither cause nor permit any Company Subsidiaries or any of the Company's affiliates (over which it exercises control), or any of its or their officers, directors, employees and agents (in each Company Subsidiary not to (unless required by applicable Law)case, in their capacities as such) to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following following, without the prior written consent of Parent (Parent, which consent will shall not be unreasonably withheld, delayed withheld or conditioned):delayed:
(a) amend the Company Charter or Company Bylaws otherwise change its charter or bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)documents;
(b) issue, deliver, sell, pledge, dispose of, grant, transfer or transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, (i) any shares of capital stock of, or other Equity Interests in, of the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, for any shares of such capital stock or other Equity Interestsstock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securitiesstock, or any other ownership interest (including, without limitation, any such interest represented by Contract rightphantom interest), of the Company or any Company Subsidiary, other than Subsidiary (i) except for the issuance of Shares upon the vesting, settlement or any shares of capital stock issuable pursuant to the exercise of any Company Accelerated Equity Awards Options outstanding as of on the date hereof in accordance with their terms, of this Agreement); or (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylaws;
(c) sell, pledge, dispose of, transfer, lease, license or encumber any material property or assets of the Company or the any Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights Subsidiary, except in all cases in the ordinary course of business) except pursuant business and in a manner consistent with past practice; provided that the aggregate amount of any such sale or disposition (other than a sale or disposition of petroleum products or other inventory in the ordinary course of business consistent with past practice, as to (i) which there shall be no restriction on the aggregate amount), or pledge, grant, transfer, lease, license, guarantee or encumbrance of such property or assets of the Company or any Company Material Contract in effect as of the date of this Agreement Subsidiary shall not exceed (x) $500,000 or (iiy) in the case of any non-Company Material Contractsale or disposition of retail gasoline sites, in effect as $1,000,000, provided that not more than four retail gasoline sites may be disposed of under this subsection (y) between the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000Effective Time;
(dc) declare, set aside, make or pay any dividend or other distribution (whether distribution, payable in cash, stock, property or a combination thereof) otherwise, with respect to any of its capital stock or Equity Interests (except as between stock, other than dividends paid by any of the wholly owned Company Subsidiaries to the Company and its Subsidiaries or between in the Company Subsidiaries) or enter into any agreement ordinary course of business consistent with respect to its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)past practice;
(ed) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interestsstock;
(fi) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any businesscorporation, divisionpartnership, organization other business organization, person or any Person (division thereof or any material portion of the assets thereof)assets, other than (ix) as required pursuant to the terms acquisitions of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become responsible for the obligations of any Person for borrowed money, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities assets in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,000;
300,000 or (my) except purchases (whether for cash or pursuant to an exchange) of crude oil or intermediate products for refining or refined petroleum products or other inventory for resale in the extent required by (i) applicable Law, ordinary course of business and consistent with past practice; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the existing terms obligations of any person for borrowed money, except for indebtedness for borrowed money incurred in the ordinary course of business and consistent with past practice under the Loan and Security Agreement, effective as of December 10, 1998 and last amended effective as of March 16, 2000, between Congress Financial Corporation and First Union National Bank, as lenders, Congress Financial Corporation, as administrative agent, the Company Benefit Planand certain of the Company Subsidiaries, Foreign Benefit Plan as borrowers, or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect incurred to severance or termination pay in existence refinance outstanding indebtedness for borrowed money existing on the date of this Agreement: Agreement (Awhich refinancing shall not increase the aggregate amount of indebtedness permitted to be outstanding thereunder and shall not include any covenants that shall be materially more burdensome to the Company in any material respect or increase costs to the Surviving Corporation after the Effective Time in any material respect), or other indebtedness for borrowed money with a maturity of not more than one year in a principal amount not, in the aggregate, in excess of $1,000,000; (iii) terminate, cancel or request any material change in, or agree to any material change in any Material Contract or enter into any contract or agreement material to the business, results of operations or financial condition of the Company and the Company Subsidiaries taken as a whole, in either case other than in the ordinary course of business, consistent with past practice; (iv) make or authorize any capital expenditure, other than as set forth in Section 5.01(e)(iv) of the Disclosure Schedule; or (v) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.01(e);
(f) increase the compensation or benefits payable or to become payable to any directorits officers or employees, officer, employee except for increases in accordance with past practices in salaries or other service provider wages of employees of the Company or any Company Subsidiary (except, in the case of individuals who are not officers of the Company, or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice), (B) grant any additional rights to severance or termination pay to, or enter into any employment or severance agreement with, any director, officer employee or other service provider employee of the Company or any Company Subsidiary (exceptSubsidiary, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, compensation, stock option (including, without limitation, the granting of stock options, stock appreciation rights, stock option appreciation unit awards, performance awards or performance restricted stock awards), stock purchase, pension, retirement, deferred compensation, termination employment, termination, severance or severance other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officerofficer or employee, employee except as contemplated by this Agreement or to the extent required by applicable Law or the terms of a collective bargaining agreement or a contractual obligation existing on the date hereof;
(g) take any action with respect to modifying accounting policies or procedures, other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review than actions in the ordinary course of business business, consistent with past practice, actions that would not increase practice or the cost requirements of such group health or medical coverage plan U.S. GAAP and as advised by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement)Company's regular certified independent public accountants;
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(qh) waive, release, assign, commence, compromise, settle or agree to settle compromise any Proceeding (including any Proceeding relating to this Agreement material claims or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary litigation involving money damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in 250,000, except for claims asserted by the aggregate, in any case without the imposition of equitable relief on, Company or the admission of wrongdoing by, the Company, any applicable Company Subsidiary or any of their respective directors, officers, employees or agentsSubsidiary;
(r) (i) make or change any material Tax election, (ii) adopt election or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim material federal, state, local or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material foreign Tax sharing or similar agreementliability;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(wj) authorize or enter into any Contract formal or informal agreement or otherwise make any commitmentcommitment to do any of the foregoing;
(k) amend or modify, or propose to amend or modify, the Rights Agreement, as amended as of the date hereof, except as contemplated in each case this Agreement;
(l) take any action that will be likely to result in the representations and warranties set forth in Article III becoming false or inaccurate in any material respect (or, with respect to any representation and warranty already qualified by materiality, false or inaccurate in any respect);
(m) enter into or carry out any other transaction other than in the ordinary and usual course of business or other than as permitted pursuant to the other clauses in this Section 5.01;
(n) take any action or fail to take any action that could reasonably be expected to have or result in a Material Adverse Effect; or
(o) permit or cause any Company Subsidiary to do any of the foregoing in clauses (a) through (v)or agree or commit to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Crown Central Petroleum Corp /Md/)
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the earlier of (A) the Effective Time and or (B) the date of termination of this Agreement in accordance with Article 7Agreement, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required specifically permitted by any other provision of this Agreement Agreement, unless Parent shall otherwise agree in writing or as required by applicable Law, unless Parent will otherwise agree in writing (which agreement will not be unreasonably withheld, delayed or conditioned), the Company will will, and will cause each Company Subsidiary to to, (i) conduct its operations in all material respects only in the ordinary and usual course of business consistent with past practice practice, and use commercially reasonable efforts to (i) preserve substantially intact its business organization and shall not take any action inconsistent therewith or with this Agreement, (ii) use its reasonable best efforts to keep available the services of the current officers, employees and consultants of the Company and each Company Subsidiary and to preserve the current relationships of the Company and each Company Subsidiary with such of the customers, suppliers, distributors, business partners and other Persons with which the Company or any Company Subsidiary has business relations, (iii) have in effect and maintain in all material respects at all times, insurance substantially of the kinds and preserve in the amounts as is in effect as of the date of this Agreement, and (iv) keep substantially in working condition and good order and repair all of its assetsmaterial assets and other material properties, properties normal wear and positive material business relationships (including employees)tear excepted. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required specifically permitted by any other provision of this Agreement or as required by applicable LawAgreement, the Company will shall not, and shall not and will cause each permit any Company Subsidiary not to (unless required by applicable Law)to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the Parent’s prior written consent consent, unless required by applicable Law or in accordance with the Company’s 2006 capital budget set forth on Section 6.1 of Parent the Company Disclosure Schedule or as otherwise set forth on Section 6.1 of the Company Disclosure Schedule (which consent will not be unreasonably withheld, delayed or conditionedwith each exception specifically identified by paragraph number):
(a) amend acquire by merging or consolidating with or by purchasing a substantial Equity Interest in or a substantial portion of the Company Charter assets of, or Company Bylaws by any other manner, any business, corporation, partnership, association or equivalent documents other business organization or division thereof with a value or purchase price in excess of $1,000,000, or enter into any Company Subsidiary (other than routine amendments to the organizational documents of agreement providing for any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)merger, acquisition, divestiture or similar transaction;
(b) issue, deliver, sell, pledgelease, license or otherwise dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, of its properties or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), of the Company or any Company Subsidiaryassets, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards outstanding as of the date hereof in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylaws;
(c) sell, pledge, dispose of, transfer, lease, license or encumber any material property or assets of the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant licenses to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(d) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries) or enter into any agreement with respect to its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries);
(e) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interests;
(f) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stock) any interest in any business, division, organization or any Person (or any material portion of the assets thereof), other than (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become responsible for the obligations of any Person for borrowed money, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors customers in the ordinary course of business consistent with past practice, (Bii) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries dispositions of equipment that is no longer used or between the Company’s wholly-owned Subsidiariesuseful, (Ciii) without prejudice to Section 5.1(i), (i) as required pursuant to the terms sales of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers assets in the ordinary course of business consistent with past practicepractice and (iv) sales, leases, licenses or dispositions of assets with a fair market value not in excess of $1,000,000 in respect of any one asset and not in excess of $10,000,000 in the aggregate;
(kc) terminateamend or propose to amend the Company Certificate of Incorporation or Company Bylaws or, cancelin the case of the Company Subsidiaries, modify their respective constituent documents;
(d) other than dividends from any wholly-owned Company Subsidiary to its parent, declare, set aside or amend pay any dividend or other distribution payable in cash, capital stock, property or otherwise with respect to any shares of its capital stock, or purchase, redeem or otherwise acquire, or offer to purchase, redeem or otherwise acquire, any shares of its capital stock, other equity securities, other ownership interests or any options, warrants or rights to acquire any such stock, securities or interests (except for repurchases of Company Common Shares to the extent required pursuant to Repurchase Rights);
(e) split, combine or reclassify any outstanding shares of its capital stock;
(f) issue, sell, authorize, or agree to the issuance or sale of, any shares of, or any options, warrants or rights of any kind to acquire any shares of, or any securities convertible into or exchangeable for any shares of, any Equity Interests of the Company or any Company Material ContractSubsidiary, except for the Company Common Shares issuable upon exercise of (i) Company Options outstanding on the date hereof or cancel, modify, amend, release, assign or waive any rights or claims under any (ii) Company Material Contract, or enter into or amend any Contract that, if existing Warrants outstanding on the date hereof;
(g) grant, would be a amend or change the terms of any Company Material ContractOption or stock appreciation right, phantom stock or other stock-based incentive award of any kind, or accelerate or change the period of exercisability or vesting of any Company Option or stock appreciation right, phantom stock or other stock-based incentive award of any kind, or amend any Repurchase Rights or accelerate or change the period of vesting of any Company Common Shares subject to Repurchase Rights, or authorize cash payments in exchange for any Company Option or stock appreciation right, phantom stock or other stock-based incentive award of any kind, in each case case, except as a result of the Merger;
(i) take any action with respect to the grant of or increase in any severance or termination pay to any current or former director, executive officer or employee (solely with respect to employees, other than in the ordinary course of business consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,000;
(m) except to the extent required by (i) applicable Lawor any Company Subsidiary, (ii) execute any employment, deferred compensation or other similar agreement with any director, executive officer or employee (solely with respect to employees, other than in the existing terms ordinary course consistent with past practice) of the Company or any Company Benefit Plan, Foreign Benefit Plan or Company CBASubsidiary, (iii) this Agreement or (iv) contractual commitments with respect to increase the benefits payable under any existing severance or termination pay in existence on the date of this Agreement: policies or employment agreements, (Aiv) increase the compensation compensation, bonus, severance or other benefits payable of current or former directors, executive officers or employees (solely with respect to become payable employees, other than in the ordinary course consistent with past practice) of the Company or any Company Subsidiary, (v) adopt or establish any new employee benefit plan (including any severance plan) or amend any existing employee benefit plan (including any severance plan), except as may be required by Law, or as may be required to comply with Section 409A of the Code, or (vi) pay any benefit to a current or former director, officer, executive officer or employee or other service provider of the Company or any Company Subsidiary not required by any existing agreement or employee benefit plan (exceptincluding any severance plan) or, (vii) take any action that would result in its incurring any obligation for any payments or benefits described in clauses (i), (ii) or (iii) except to the extent required in a written Contract or agreement in existence as of the date of this Agreement and set forth in the case Company Disclosure Schedule;
(i) hire any Person as an executive officer of individuals who are the Company or, except in the ordinary course of business, enter into, amend or extend the term of, any employment or consulting agreement with any officer, employee, consultant or independent contractor (other than offer letters to new employees using the Company’s standard, unmodified form of offer letter which provides for at-will employment and which does not officers provide for severance, acceleration or directorspost-termination benefits, for increases in connection with promotions other than those generally available to employees of the Company or periodic reviews a Company Subsidiary), or enter into any collective bargaining agreement;
(i) make any material Tax election except in the ordinary course of business and consistent with past practice); (ii) change in any material respect any accounting method in respect of Taxes; and (iii) settle any material Tax claim, action or proceeding, except (BA) grant any additional rights to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review settlements in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable (B) settlements to the employee extent subject to reserves existing as of the date hereof in accordance with GAAP;
(k) commence any legal proceeding, or settle, compromise or otherwise resolve any litigation or other legal proceedings, other than is the case resolution through trial judgment for any legal proceeding in existence as of the date hereof, (y) involving a payment of more than $1,000,000 in the any one case of collective bargaining agreements, amendments in the ordinary course of business that are not material by or to the Company and or any of the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(nl) hire or appoint incur any Company executive officer Indebtedness (as defined other than capitalized lease obligations permitted by Rule 3b-7 promulgated under the Exchange Act) or director;
clauses (o) forgive or (s) below) in excess of $10,000,000 or which may not be prepaid without penalty, or modify the terms of any loans to Service Providers existing Indebtedness of the Company or any of their respective affiliates;
Company Subsidiary, except (pi) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements draws made in the ordinary course of business consistent with past practice that involve only pursuant to the payment Company’s Credit Facility not to exceed an amount of monetary damages $215,000,000 outstanding at any time or (net ii) for real estate leases reasonably necessary in connection with distribution Contracts entered into after the date hereof to the extent permitted by this Agreement;
(m) assume, guarantee, endorse or otherwise as an accommodation become responsible for, the obligations of any payments other Person, or, subject to clause (p) below, make any loans, advances or proceeds received through insurance investment in capital contribution to any Person, except (i) to or indemnity arrangementsfor the benefit of the Company Subsidiaries or (ii) for those not in excess of $5,000,000 individually or $10,000,000 1,000,000 in the aggregate;
(n) create or assume any material Encumbrance on any material asset;
(o) make or commit to make capital expenditures in excess of $1,000,000 in the aggregate after the date of this Agreement;
(p) make any loans or advances (other than routine travel advances, in any case without sales commission draws to employees of the imposition of equitable relief on, Company or the admission of wrongdoing by, the Company, any Company Subsidiary and advance purchase payments to suppliers in an aggregate amount not in excess of $1,250,000 in the ordinary course of business consistent with past practice) to, or any investment in or capital contribution to, any Person (including any officer, director or employee of the Company) other than intra-company transfers between the Company and a Company Subsidiary in the ordinary course of business consistent with past practice, or forgive or discharge in whole or in part any outstanding loans or advances, or otherwise modify any loan previously granted to any such Person;
(q) enter into any agreement, arrangement or commitment that limits or otherwise restricts the Company or any Company Subsidiary, or that would, after the Effective Time, limit or restrict Parent or any of the Parent Subsidiaries or any of their respective directorsAffiliates or any successor thereto, officersfrom engaging or competing in any line of business or in any geographic area, employees or agentswhich provides exclusive rights or “most favored nation” rights of any kind or scope to any party;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity other than with respect to Taxesany agreement with Parent, (v) settle terminate, amend, modify or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into knowingly waive any material Tax sharing provision of any confidentiality or similar standstill agreement to which it is a party or, upon notice of a material breach, fail to enforce, to the fullest extent permitted by Law, the provisions of such agreement;
(s) (i) amend, terminate or modify in any material respect any Insurance PolicyCompany Material Contract, or fail to maintain (ii) enter into any Insurance Policy Contract that would have been a Company Material Contract if it were in effect on the date hereof involving consideration or other obligation in excess of $1,000,000 annually, except for real estate leases reasonably necessary in connection with at least substantially distribution Contracts entered into after the same coverage and on terms and conditions not less advantageous date hereof to the insured than such existing Insurance Policyextent permitted by this Agreement;
(t) write upmaterially change the terms on which, write down or write off the book value of any tangible assetsmanner in which, it extends warranties or indemnification rights to customers in a manner that is adverse to the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; orCompany or the Company Subsidiaries;
(u) engage knowingly take, or agree to commit to take, any action that would reasonably be expected to result in any transactionsof the conditions to the Merger not being satisfied, arrangements or understandings would make any representation or warranty of the Company contained herein inaccurate in any material respect at the Effective Time, or that would materially impair the ability of the Company, Parent, Merger Sub or the holders of Company Common Shares to consummate the Merger in accordance with any Affiliate the terms hereof or materially delay such consummation including, without limitation, adoption or implementation of a rights plan or other Person that would be required to be disclosed under Item 404 of Regulation Santi-K under the Securities Acttakeover arrangement or device;
(v) enter into any contract, make Contract to re-sell or distribute any commitment licensed or take any action that requires consent non-licensed “Parts Manufacturer Approvals” products or parts of Apollo Global Management, LLC Parent or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of DesignationAffiliates;
(w) authorize or enter into any Contract agreement, arrangement or otherwise make any commitmentcommitment that subjects the Company to compliance with requirements of the Federal Acquisition Regulation or Cost Accounting Standards beyond the level of compliance required as of the date of this Agreement, in each case provided, that with respect to do this subsection 6.1(w) such consent shall not be unreasonably withheld or delayed; or
(x) agree to take any of the foregoing actions described in clauses subsections (a) through (v)w) of this Section 6.1. Nothing contained in this Agreement shall give Parent, directly or indirectly, rights to control or otherwise direct the Company’s operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its operations.
Appears in 1 contract
Samples: Merger Agreement (Boeing Co)
Conduct of Business by the Company Pending the Closing. The Between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7, except for any Permitted Action or as set forth in Section 5.1 of the Company covenants Disclosure Schedule or as otherwise expressly required by any other provision of this Agreement, or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), the Company will, and agrees thatwill cause each of its Subsidiaries to, use its reasonable best efforts to (i) conduct its operations in all material respects in the ordinary course of business in a manner consistent with past practice, (ii) preserve substantially intact its and its Subsidiaries’ business organizations, assets and properties in all material respects, (iii) keep available the services of the current officers, employees and consultants of the Company and each of its Subsidiaries and (v) preserve the goodwill and current relationships of the Company and each of its Subsidiaries with customers, suppliers, lessors, licensors, creditors, contractors and other Persons, in each case with which the Company or any of its Subsidiaries has significant business relations. Without limiting the foregoing, except for any Permitted Action or as set forth in Section 5.1 of the Company Disclosure Schedule or as otherwise expressly required by any other provision of this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required by any other provision of this Agreement or as required by applicable Law, unless Parent will otherwise agree in writing (which agreement will not be unreasonably withheld, delayed or conditioned), the Company will and will cause each Company Subsidiary to conduct its operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve substantially intact its business organization and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees). Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required by any other provision of this Agreement or as required by applicable Law, the Company will not and will cause each Company Subsidiary not to (unless required by applicable Law), between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, take any of the following actions without the prior written consent of Parent (which consent will not to be unreasonably withheld, delayed conditioned or conditioneddelayed):
(a) amend the Company Charter its certificate of incorporation or Company Bylaws bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)documents;
(b) issue, deliver, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, encumber any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of its Subsidiaries of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), securities of the Company or any Company Subsidiaryof its Subsidiaries, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards Options or settlement of Company RSUs or Company PBUs outstanding as of the date hereof in accordance with their terms, (ii) transactions between terms as in effect on the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylawsdate hereof;
(c) sell, pledge, dispose of, transfer, lease, license guarantee or encumber any material property or assets of the Company or the Company any of its Subsidiaries (other than non-exclusive grants Intellectual Property) having a value in excess of Intellectual Property Rights $2,000,000 individually or $5,000,000 in the ordinary course of business) aggregate, except pursuant to (i) any Company Material Contract in effect as required pursuant to existing Contracts as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as the sale or purchase of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or inventory in the aggregate not in excess ordinary course of $20,000,000business consistent with past practice;
(d) sell, assign, pledge, transfer, license, abandon, or otherwise dispose of any Company Owned Intellectual Property, except in the ordinary course of business consistent with past practice;
(e) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or other Equity Interests (Interests, except as between for dividends paid by a wholly-owned Subsidiary of the Company and its Subsidiaries or between to the Company Subsidiaries) or enter into any agreement with respect to its capital stock or Equity Interests (except as between another wholly-owned Subsidiary of the Company and its Subsidiaries or between the Company Subsidiaries)Company;
(ef) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other Equity Interests, or authorize or propose except with respect to any wholly owned Subsidiary of the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity InterestsCompany;
(fg) merge or consolidate the Company or any of its Subsidiaries with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization of the Company or file a petition in bankruptcy or consent any of its Subsidiaries, except with respect to (and only among) any wholly owned Subsidiaries of the filing of any bankruptcy petition under any applicable LawCompany;
(gh) directly or indirectly, acquire (including, without limitation, including by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization Person or any Person (or any material portion of the assets thereof)assets, other than (i) as required pursuant to the terms acquisitions of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contractinventory, raw materials and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become responsible for the obligations of any Person for borrowed money, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities property in the ordinary course of business consistent with past practice and (ii) any other acquisitions with a purchase price (including the assumption of indebtedness) of less than $5 million individually, or $25 million in the aggregate for all such acquisitions;
(Bi) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for (whether directly, contingently or otherwise), the obligations of any guarantee Person (other than a wholly-owned Subsidiary of such indebtednessthe Company) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause for borrowed money, except for (i); except that any loan from ) in connection with refinancing of existing indebtedness upon maturity thereof, (ii) borrowings under the Company Company’s existing credit facilities or any Company Subsidiary located issuances of commercial paper for working capital and general corporate purposes in the United States ordinary course of business consistent with past practice and (iii) indebtedness not to any Company Subsidiary located outside of the United States shall be limited to exceed $10,000,000 5 million in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person (other than any wholly-owned Subsidiary of the Company) in excess of $5,000,000 2 million individually or $5 million in the aggregate;
(k) terminate, other than cancel or renew, or agree to any material amendment or modification to or waiver under any Company Material Contract, or knowingly take (Aor fail to take) immaterial loans any action that would reasonably be expected to cause or advances to employees result in a material breach of, or independent contractors material default under, any Company Material Contract, or, except in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of made available to Parent prior to the Company Disclosure Scheduledate hereof, other than (i) capital expenditures made in response to operational emergencies or (ii) capital expenditures that are not, in the aggregate, in excess of $5,000,0005 million;
(m) except (i) to the extent required by (i) this Agreement, applicable Law, (ii) Law or the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this AgreementContract: (A) increase the compensation or benefits payable or to become payable to any directorService Provider, officer, employee other than (i) increases to base salary or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews hourly wage rate made in the ordinary course of business consistent with past practice)practice in an annual amount not to exceed 4% in the aggregate or, with respect to any individual executive officer, 10% of the applicable executive officer’s base salary and (ii) increases in target bonus amounts directly resulting from such base salary or wage rate increases, (B) grant any additional rights new severance, change of control, retention, termination or similar compensation or benefits to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice)Service Provider, (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination material Company Benefit Plan (except for administrative amendments to or severance plan, agreement, trust, fund, policy or arrangement for the benefit annual renewals of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments Benefit Plans in the ordinary course of business that are do not result in a material to increase in costs for the Company), or establish, adopt, or enter into any new such arrangement that if in effect on the date hereof would be a Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000)Benefit Plan, (D) terminate waive any performance criteria or accelerate the vesting, exercisability or funding under any Company Benefit Plan Plan, (E) terminate (other than for cause) the employment of or Foreign Benefit Plan hire or promote any employee with an annual base salary that is or would be $300,000 or more; or (F) enter into, amend, negotiate or extend any collective bargaining agreement or other agreement with a labor union, works council or similar organization except as contemplated by this Agreement)would not result in a material increase in costs for the Company; or (G) effectuate a “plant closing,” “mass layoff” (as defined under WARN and any similar state Law) or other employee mass layoff event affecting in whole or in part any site of employment, facility or operating unit;
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accountsprocedures, in each case other than any such change as required by a change in GAAP or by applicable Lawa Governmental Entity;
(qo) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) investigation other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 10 million individually or and $10,000,000 25 million in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directorsits Subsidiaries; provided, officersthat settlements or Proceedings or investigations of the nature referenced in Section 2.3 and Section 5.13 shall be governed exclusively by Section 2.3 and Section 5.13, employees or agents;respectively.
(rp) (i) make make, change or change revoke any material Tax election, (ii) adopt or change any of its material methods of reporting income or deductions for Tax accounting methodpurposes, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) or settle or compromise any claim material Tax liability or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into settle any material Tax sharing claim, audit or similar agreement;
(s) terminate or modify dispute, except, in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assetseach case, in the aggregate, in excess ordinary course of $5,000,000, except for depreciation business and amortization in accordance consistent with GAAP consistently appliedpast practice; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(wq) authorize or enter into any Contract or otherwise agree or make any commitment, in each case commitment to do any of the foregoing in clauses (a) through (v)foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the earlier Effective Time, except as set forth in Section 5.1 of the Effective Time Company Disclosure Schedule and the termination as expressly permitted or contemplated by any other provision of this Agreement or as required by applicable Law or the regulations or requirements of Nasdaq, unless Parent shall otherwise agree in accordance writing (which agreement shall not be unreasonably withheld, delayed or conditioned), the Company shall, and shall cause each Company Subsidiary to, (A) conduct its operations in the ordinary course of business substantially consistent with Article 7past practice (including with respect to underwriting matters), (B) use its commercially reasonable efforts to maintain its relationships with officers, key employees, Producers and customers and to renew policies with current insureds substantially consistent with past practice and (C) use its commercially reasonable efforts to preserve substantially intact its business organization and goodwill. Without limiting the foregoing, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required expressly permitted or contemplated by any other provision of this Agreement or as required by applicable Law, unless Parent will otherwise agree in writing (which agreement will not be unreasonably withheld, delayed Law or conditioned)the regulations or requirements of Nasdaq, the Company will shall not, and will cause each shall not permit any Company Subsidiary to conduct its operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve substantially intact its business organization and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees). Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required by any other provision of this Agreement or as required by applicable Law, the Company will not and will cause each Company Subsidiary not to (unless required by applicable Law)to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will shall not be unreasonably withheld, delayed or conditioned):
(ai) amend the Company Charter its articles of incorporation or Company Bylaws By-laws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)documents;
(bii) issue, deliver, sell, pledge, dispose of, grant, transfer or encumber, (A) issue or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, issuance of any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), securities of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards outstanding as of the date hereof in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the terms of Company Charter and Company Bylaws;
Equity Awards outstanding on the date hereof, or (cB) sell, pledge, dispose of, transfer, lease, license license, guarantee or encumber any material property encumber, or assets of authorize the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license license, guarantee or encumbrance is individually not in excess of, any material property or assets of $10,000,000the Company or any Company Subsidiary, except pursuant to contracts or commitments or the sale or purchase of goods, other property, assets or insurance in the aggregate not in excess ordinary course of $20,000,000business substantially consistent with past practice;
(diii) materially change its investment portfolio management practices or acquire or sell material Investment Assets, except in the ordinary course of business consistent with past practices and except that the Company may sell any or all of the 206,847 shares of Vanguard High Dividend Yield Index ETF (Ticker: VYM) owned by the Company on the date hereof;
(iv) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between other than dividends paid by (i) First Professionals Insurance Company, Inc. to the Company and its Subsidiaries or between not in excess of $100,000, (ii) a Company Subsidiary (other than a Company Insurance Subsidiary) to the Company Subsidiariesor (iii) a Company Insurance Subsidiary to another Company Insurance Subsidiary to the extent such dividend may be made without regulatory approval) or enter into any agreement with respect to the voting of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)stock;
(ev) other than cashless exercises of Company Options, reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock stock, other Equity Interests or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interestssecurities;
(fvi) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization person or any Person (all or any material portion substantially all of the assets thereof)of any person, other than in connection with investment management in the ordinary course of business;
(ivii) make any material change in accounting policies or procedures (including making any material change in actuarial policies or procedures or ceasing to use a third party consulting actuary), except as required pursuant by GAAP, Statutory Accounting Principles, by applicable Law or by a Governmental Authority;
(viii) (A) make, change or revoke any material election in respect of Taxes, (B) adopt or change any material accounting method in respect of Taxes, (C) enter into any material Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement, (D) settle or compromise any material claim, notice, audit report or assessment in respect of Taxes or (E) surrender any right to the terms claim a material refund of Taxes;
(ix) enter into, amend, renew or exercise any existing option to terminate or extend, in each case in any material respect, any material real estate lease (as lessor or lessee); enter into, amend or terminate, in each case in any material respect, any Company Material Contract to which the Company or any Company Subsidiary it is a party or by or to which it or its assets, properties or business are bound or subject, except as otherwise permitted by this Section 5.1 or in the ordinary course of business substantially consistent with past practice; or enter into or amend any Company Material Contract pursuant to which it agrees to refrain from competing with any third party;
(iix) other than as required by any judgment, order or arbitral award, enter into any agreement relating to the commutation of any assumed reinsurance program or assumed reinsurance treaty existing on the date hereof;
(xi) renew its ceded reinsurance program other than in the ordinary course of business substantially consistent with past practice;
(xii) except pursuant to the terms Company’s 2011 budget, a true, complete and accurate copy of which has been furnished to Parent prior to the date hereof, make any existing non-Company Material Contract, and which acquisition is individually not capital expenditures or commitment for any capital expenditures in excess of $10,000,000, or 100,000 in the aggregate not aggregate;
(xiii) settle any action, suit or other proceeding or investigation or threatened action, suit or other proceeding or investigation, except in the ordinary course of business substantially consistent with past practice;
(xiv) incur any Indebtedness in excess of $20,000,0001,000,000 in the aggregate;
(hxv) enter into any new line of business that is material to the Companybusiness;
(ixvi) directly make any material loan or indirectlyadvance to, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorseIndebtedness of, or otherwise become responsible for the obligations incur Indebtedness on behalf of any Person for borrowed moneythird party, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(lxvii) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget except as set forth in Section 5.10 and as described on Section 5.1(l) 5.1 of the Company Disclosure ScheduleSchedule (i) grant or pay any increase, other than capital expenditures that are notor announce or promise any increase, in the aggregatewages, salaries, compensation, bonuses, incentives, equity awards, severance, pension or other direct or indirect compensation or benefits payable to any of its employees, officers, directors, any affiliates of officers or directors, or service providers (other than commercially reasonable increases to non-affiliated service providers in excess the ordinary course of $5,000,000;
(m) except to the extent required by (i) applicable Lawbusiness), or (ii) establish, increase or promise to increase any benefits under any Company Benefit Plan, in either case except (A) as required by the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any directorhereof, officer, employee or other service provider of the Company or any Company Subsidiary law, rule or regulation, and (except, in B) the case payment of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews accrued but unpaid bonuses under existing agreements in the ordinary course of business and consistent with past practice);
(xviii) fail to file any Company SEC Filing other than (i) any report filed after the applicable deadline in accordance with Rule 12b-25 of the Exchange Act that has been filed within the time period prescribed by that rule; and (ii) with respect to any matter that is required to be reported solely pursuant to Item 1.01, 1.02, 2.03, 2.04, 2.05, 2.06, 4.02(a) or 5.02(e) of Form 8-K and that is reported in the next periodic report on Form 10-Q or Form 10-K required to be filed after the event giving rise to the requirement to report under such item;
(Bxix) grant any additional rights to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargainingexisting employment, welfareseverance, fringe benefitretention, incentive compensationchange in control or indemnification agreement with any of its past or present officers, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination directors or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (exceptemployees, (xii) in the case of group health promote any officers or medical coverage subject to annual review in the ordinary course of business consistent with past practiceemployees, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages or (net of iii) amend any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agentsexisting non-competition agreement;
(r) (ixx) make or change any material Tax electionchange in the business or its reinsurance structure, or Insurance Contracts, rates, underwriting practices and procedures or marketing methods;
(iixxi) adopt abandon, encumber, convey title (in whole or change in part), exclusively license or grant any material Tax accounting method, right or other licenses in or to Intellectual Property owned by the Company;
(iii) file any material amendment to a Tax Return, (ivxxii) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person arrangement that would be required to be disclosed under reported by the Company pursuant to Item 404 of Regulation S-K under promulgated by the Securities Act;SEC; or
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(wxxiii) authorize or enter into any Contract agreement or otherwise make any commitment, in each case commitment to do any of the foregoing in clauses (a) through (v)foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as set forth in Section 5.1 Sections 6.1(b), (f), (k) and (p) of the Company Disclosure Schedule, as required otherwise permitted or contemplated by any other provision of this Agreement or Agreement, as required by applicable Law, unless Parent will otherwise agree Law or as consented to in writing by Parent (which agreement will such consent not to be unreasonably withheld, delayed withheld or conditioneddelayed), the Company will will, and will cause each Company Subsidiary to, in all material respects (it being understood that in no event shall the Company’s participation in the negotiation (including activities related to due diligence), execution, delivery or public announcement (in accordance with this Agreement) or the pendency of this Agreement or the transactions contemplated hereby, be considered a breach of any of the provisions of this Section 6.1), (i) conduct its operations business in the ordinary course of business consistent with past practice practices, and (ii) use commercially its reasonable best efforts to (i) keep available the services of the current officers, key employees and consultants of the Company and each Company Subsidiary and to preserve the current relationships of the Company and each Company Subsidiary with each of the customers, suppliers and other Persons with whom the Company or any Company Subsidiary has business relations as is reasonably necessary to preserve substantially intact its business organization and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees)organization. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required otherwise contemplated by any other provision of this Agreement or Agreement, as required by applicable LawLaw or as consented to in writing by Parent (such consent not to be unreasonably withheld or delayed), the Company will shall not, and shall not and will cause each permit any Company Subsidiary not to (unless required by applicable Law)to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):following:
(a) amend or otherwise change the Company Charter or Certificate, the Company Bylaws By-laws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any the Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)Subsidiaries;
(b) except as permitted by Section 6.1(k) below, issue, deliver, sell, pledge, dispose of, grant, transfer pledge or otherwise encumber, or authorize authorize, propose or agree to the issuance, delivery, sale, pledge, disposition, grant, transfer, pledge or encumbrance of, any shares of its capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any classstock, or securities convertible intointo or exchangeable for, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any options, warrants warrants, calls, commitments or other rights of any kind to acquire acquire, any shares of such any class or series of its capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or pursuant to the exercise of Company Accelerated Equity Options or Company Stock-Based Awards outstanding as of existing on the date hereof in accordance with their terms, (ii) transactions between hereof); provided that the Company and shall be permitted to issue Company Stock-Based Awards, which issuances shall not constitute a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or violation of this Section 6.1, as long as the sum of (iiix) the issuance difference between (A) the product of (1) the aggregate number of shares of Company Common Stock upon included in such issuances and (2) the conversion of shares of Company Preferred Stock in accordance with Merger Consideration and (B) the aggregate amount paid to the Company Charter for such shares upon their issuance (such difference, the “Cash Shortfall”) and (y) the aggregate amount of payments made by the Company Bylaws;under Section 6.1(k) shall not exceed $10,000,000.
(c) sellestablish a record date for, pledge, dispose of, transfer, lease, license or encumber any material property or assets of the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(d) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between other than dividends paid by a wholly-owned Company Subsidiary to the Company and its Subsidiaries or between the to any other wholly-owned Company SubsidiariesSubsidiary) or other Equity Interests, or enter into any agreement with respect to the voting of its capital stock or other Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)Interests;
(ed) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire or offer to acquire, directly or indirectly, any of its capital stock or other Equity Interests, except pursuant to the exercise or authorize or propose settlement of Company Options, Company Stock-Based Awards, employee severance, retention, termination, change of control and other contractual rights existing on the issuance of any other securities date hereof in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interestsaccordance with their terms;
(fe) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, including by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) or make any investment in any interest in any business, division, organization Person or any Person (division thereof or any material portion of the assets thereof), other than except any such acquisitions or investments (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, that are consistent with past practices and which acquisition are for consideration that is individually not in excess of $10,000,00020,000,000, or in the aggregate aggregate, not in excess of $20,000,000100,000,000 for all such acquisitions by the Company and the Company Subsidiaries taken as a whole or (ii) of portfolios of credit card receivables upon the termination of credit card programs related thereto;
(hf) enter into any new line of business that is material to redeem, repurchase, prepay, defease, cancel, incur or otherwise acquire, or modify the Company;
(i) directly or indirectlyterms of, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become responsible for for, the obligations of any Person (other than a wholly owned Company Subsidiary) for borrowed money, except for (i) indebtedness incurred under the Company’s existing credit facilities (including any indebtedness incurred as a result of an exercise by the Company of an “accordion feature” under a pre-existing credit facility) or renewals or any refinancing thereof in each case the ordinary course of business, (ii) indebtedness for borrowed money in a principal amount not, in the aggregate, in excess of $10,000,000 for the Company and the Company Subsidiaries taken as a whole, (iii) indebtedness owing by any wholly-owned Company Subsidiary to the Company or any other than wholly-owned Company Subsidiary, (Aiv) indebtedness incurred to refinance any existing indebtedness in an amount not to exceed, and on terms no less favorable in the aggregate than, such existing indebtedness, and (v) indebtedness for borrowed money incurred with respect to acquisitions permitted pursuant to Section 6.1(e) or with respect to capital expenditures permitted pursuant to Section 6.1(i); provided that any indebtedness for borrowed money incurred or otherwise acquired or modified, or assumed under this clause (f) (other than any refinancing on terms no less favorable in the aggregate than the indebtedness being replaced thereby) shall not be subject to a prepayment penalty if such indebtedness were to be paid at or after the Effective Time;
(g) grant any Lien in any of its assets to secure any indebtedness for borrowed money, except in connection with indebtedness permitted under Section 6.1(f);
(h) sell, transfer, lease, license, assign or otherwise dispose of (including, by merger, consolidation or sale of stock or assets), any entity, business, assets, rights or properties having a current value in excess of $20,000,000 in the aggregate other than the sale, transfer, lease, license, assignment or other disposal of (i) data in the ordinary course of business, (ii) portfolios of credit card receivables upon the termination of the credit card program related thereto and (iii) credit card receivables as part of the Company’s and the Company Subsidiaries’ securitization program in the ordinary course of business;
(i) authorize, or make any commitment with respect to, any single capital expenditure which is in excess of $5,000,000 or capital expenditures which are, in the aggregate, in excess of $25,000,000 for the Company and the Subsidiaries taken as a whole, except capital expenditures that would not cause the Company’s aggregate annual capital expenditures to exceed the Company’s existing plan for annual capital expenditures for 2007 or 2008, as applicable, and previously made available to Parent;
(j) enter into any new line of business outside of its existing business segments;
(k) adopt or materially amend any material Company Benefit Plan, increase in any manner the compensation or fringe benefits of any director, officer or employee of the Company or any Company Subsidiary pursuant or pay or commit to the Existing Credit Facilities pay any material benefit not provided for by any existing Company Benefit Plan, in each case except (i) as reasonably necessary to comply with applicable Law, (ii) in the ordinary course of business consistent with past practice practices (including to address the requirements of written agreements or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from Contracts the Company or any Company Subsidiary located has entered into as of the date hereof), (iii) in connection with entering into or extending any employment or other compensatory agreements with individuals, other than executive officers or directors of the United States to Company or any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practicepractices, (Biv) without prejudice to Section 5.1(i), loans solely between in connection with entering into any retention agreements or programs determined by the Board of Directors of the Company as being reasonably necessary in order to maintain its business operations prior to, and its wholly-owned Subsidiaries or between extending through, the Company’s wholly-owned SubsidiariesEffective Date, provided that the sum of (Cx) without prejudice to Section 5.1(i), the Cash Shortfall and (iy) as required pursuant to the terms aggregate amount of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement payments made by the Company or any Company Subsidiary in compliance with the terms of under this AgreementSection 6.1(k) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually shall not in excess of exceed $10,000,000, or in the aggregate not in excess of $20,000,000 and (Dv) extended payment terms for customers general salary increases in the ordinary course of business consistent with past practicepractices or (vi) the amendment of any Company Benefit Plan that may be subject to Code Section 409A consistent with Code Section 409A and any guidance issued thereunder;
(kl) terminatepay, canceldischarge, modify settle or amend satisfy any material claims or obligations (absolute, accrued, contingent or otherwise), other than (i) performance of contractual obligations in accordance with their terms, (ii) payment, discharge, settlement or satisfaction in the ordinary course of business or (iii) payment, discharge, settlement or satisfaction in accordance with their terms, of claims, liabilities or obligations that have been (x) disclosed in the most recent financial statements (or the notes thereto) of the Company Material Contractincluded in the Company SEC Filings filed prior to the date hereof to the extent of such disclosure or (y) incurred since the date of such financial statements in the ordinary course of business;
(m) except as otherwise contemplated by this Agreement, or cancelincluding Sections 6.1(e) and 6.5.8, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, adopt or enter into a plan of complete or amend partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Contract thatCompany Subsidiary (other than the Merger);
(n) except as may be required by GAAP or as a result of a change in Law, if existing on the date hereofmake any material change in its principles, would be a Company Material Contractpractices, in each case procedures and methods of accounting;
(o) other than in the ordinary course of business consistent with past practicepractices, make or change any material Tax election, settle or compromise any material liability for Taxes, obtain any material Tax ruling or amend any material Tax Return;
(lp) make enter into, amend or authorize modify in any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, material respect (other than capital expenditures any such amendments or modifications to Material Contracts that are not, in the aggregate, in excess of $5,000,000;
(m) except to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who not Material Revenue Producing Contracts that are not officers or directors, for increases in connection with promotions or periodic reviews made in the ordinary course of business consistent with past practicepractices), (B) grant cancel or consent to the termination of any additional rights to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider of the Company Material Contract or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions Contract that would not increase the cost of such group health or medical coverage plan by more than 5% or result be a Company Material Contract if in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of effect on the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (Agreement except as contemplated permitted by any other provision of this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable LawSection 6.1;
(q) waivefail to maintain in full force and effect the material insurance policies covering the Company and Company Subsidiaries and their respective properties, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements assets and businesses in the ordinary course of business a form and amount consistent with past practice practices unless the Company determines in its reasonable commercial judgment that involve only the payment form or amount of monetary damages (net of any payments or proceeds received through such insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;should be modified; or
(r) (i) make knowingly commit or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment agree to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, in each case to do any of the foregoing actions or any action which would result in clauses (a) through (v)any of the conditions to the Merger set forth in Article 7 not being satisfied or that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company to consummate the Merger.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as set forth in Section 5.1 of the Company Disclosure Schedule, Schedule or as required specifically permitted or expressly contemplated by any other provision of this Agreement or as required by applicable LawAgreement, unless Parent will shall otherwise agree in writing (which agreement will not be unreasonably withheld, delayed or conditioned), writing: the Company will will, and will cause each Company Subsidiary to to, (A) conduct its operations only in the ordinary and usual course of business consistent with past practice and (B) use commercially its reasonable best efforts to (i) keep available the services of the current officers, key employees and key consultants of the Company and each Company Subsidiary and to preserve the current relationships of the Company and each Company Subsidiary with such of the customers, suppliers and other persons with which the Company or any Company Subsidiary has significant business relations as is reasonably necessary to preserve substantially intact its business organization and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees)organization. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, Schedule or as required specifically permitted or expressly contemplated by any other provision of this Agreement or as required by applicable LawAgreement, the Company will shall not and will cause each Company Subsidiary not to (unless required by applicable LawLaw or the regulations or requirements of the Exchange or any regulatory organization applicable to the Company), and shall not permit any Company Subsidiary to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed Parent:
Section 5.1.1 amend or conditioned):
(a) amend the Company Charter otherwise change its articles of incorporation or Company Bylaws bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)documents;
Section 5.1.2 (bA) issue, deliver, sell, pledge, dispose of, grant, transfer or transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, of any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract contract right), of the Company or any Company Subsidiary, other than than
(i) the issuance of Shares shares of Company Common Stock (and the related Company Rights) upon the vesting, settlement or the exercise of Company Accelerated Equity Awards Options outstanding as of the date hereof in accordance with their termsterms and the terms of this Agreement, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon (and the conversion of shares of related Company Preferred Stock Rights) pursuant to the ESPP in accordance with the terms of the ESPP and this Agreement or (iii) if a Triggering Event (as defined in the Company Charter and Rights Agreement) shall occur, the Company Bylaws;
Rights or (cB) sell, pledge, dispose of, transfer, lease, license license, guarantee or encumber any material property encumber, or assets of authorize the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license license, guarantee or encumbrance is individually not of, any material property or assets (including Intellectual Property) of the Company or any Company Subsidiary, except pursuant to existing contracts or commitments or the sale or purchase of goods in excess the ordinary course of $10,000,000business consistent with past practice, or in enter into any commitment or transaction outside the aggregate not in excess ordinary course of $20,000,000;business consistent with past practice other than transactions between a wholly owned Company Subsidiary and the Company or another wholly owned Company Subsidiary:
(d) Section 5.1.3 declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between other than dividends paid by a wholly owned Company Subsidiary to the Company and its Subsidiaries or between the to any other wholly owned Company SubsidiariesSubsidiary) or enter into any agreement with respect to the voting of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)stock;
(e) Section 5.1.4 reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock stock, other Equity Interests or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interestssecurities;
Section 5.1.5 (fA) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization person or any Person (division thereof or any material portion of the assets thereof)assets, other than (i) as required pursuant to the terms acquisitions of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become responsible for the obligations of any Person for borrowed money, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors assets in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i)incur any indebtedness for borrowed money or issue any debt securities or assume, loans solely between guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person (other than a wholly owned Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned SubsidiariesSubsidiary) for borrowed money, (C) without prejudice terminate, cancel or request any material change in, or agree to Section 5.1(i)any material change in, (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
, (lD) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Scheduleexpenditure, other than capital expenditures that are not, in the aggregate, in excess of $5,000,00010,000 for the Company and the Company Subsidiaries taken as a whole, (E) except in the ordinary course of business consistent with past practice, make or authorize any expenditure in an amount, together with all related expenditures, in excess of $10,000 or (F) enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1.5;
(m) Section 5.1.6 except to the extent as may be required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments or corporate policies with respect to severance or termination pay in existence on the date of this AgreementAgreement as disclosed in Section 3.10 of the Company Disclosure Schedule: (A) increase the compensation or benefits payable or to become payable to any directorits directors, officer, employee officers or other service provider employees (except for increases in accordance with past practices in salaries or wages of employees of the Company or any Company Subsidiary (except, in the case of individuals who which are not officers across-the-board increases); or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice), (B) grant any additional rights to severance or termination pay to, or enter into any employment or severance agreement with, any director, officer employee or other service provider employee of the Company or any Company Subsidiary (exceptSubsidiary, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, termination employment, termination, severance or severance other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officerofficer or employee, employee except to the extent required by applicable Law or other service provider the terms of a collective bargaining agreement in existence on the Company date of this Agreement.
Section 5.1.7 (A) pre-pay any long-term debt or pay, discharge or satisfy any Company Subsidiary claims, liabilities or obligations (exceptabsolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice and in accordance with their terms, (xB) accelerate or delay collection of notes or accounts receivable in advance of or beyond their regular due dates or the case of group health or medical coverage subject to annual review dates when the same would have been collected in the ordinary course of business consistent with past practice, actions that would not increase the cost (C) delay or accelerate payment of such group health any account payable in advance of its due date or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments such liability would have been paid in the ordinary course of business that are not material to the Company and the Company Subsidiariesconsistent with past practice, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate vary the Company's inventory practices in any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement)material respect from the Company's past practices;
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) Section 5.1.8 make any change in accounting policies, practices, principles, methods policies or procedures or payment or collection of accountsprocedures, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of or except as required by GAAP or by a Governmental Entity;
Section 5.1.9 waive, release, assign, settle or compromise any payments material claims, or proceeds received through insurance any material litigation or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 arbitration;
Section 5.1.10 except in the aggregateordinary course of business consistent with past practice, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) (i) make or change any material Tax electionelection in respect of Taxes, (ii) adopt or change any material Tax accounting methodmethod in respect of a material amount of Taxes, (iii) file any material amendment to a Tax Return, (iv) enter into any tax allocation agreement, tax sharing agreement, tax indemnity agreement or closing agreement with a Governmental Entity with respect to Taxesagreement, (v) settle or compromise any claim claim, notice, audit report or assessment in respect of material Taxes, (vi) or consent to any extension or waiver of the statutory limitation period of limitations applicable to any claim or assessment in respect of Taxes;
Section 5.1.11 amend or modify, or (vii) enter into propose to amend or modify, or otherwise take any action under, the Company Rights Agreement;
Section 5.1.12 modify, amend or terminate, or waive, release or assign any material Tax sharing rights or similar agreementclaims with respect to any confidentiality or standstill agreement to which the Company is a party;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) Section 5.1.13 write up, write down or write off the book value of any tangible assets, individually or in the aggregate, in excess of $5,000,000for the Company and the Company Subsidiaries taken as a whole, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(vA) enter into knowingly take any contractaction to exempt or make not subject to any state takeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares or (B) take any action to exempt or make not subject to the Company Rights Agreement, make any commitment person or entity (other than Parent, Merger Sub and any Parent Subsidiary) or any action taken thereby, which person, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
Section 5.1.15 take any action that requires consent of Apollo Global Management, LLC is intended or would reasonably be expected to result in any of its affiliates pursuant the conditions to the Merger set forth in Article 6 not being satisfied; or
Section 3.2(g) of the Preferred Certificate of Designation;
(w) 5.1.16 authorize or enter into any Contract agreement or otherwise make any commitment, in each case commitment to do any of the foregoing in clauses (a) through (v)foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required expressly permitted by any other provision of this Agreement (and Section 5.1 of the Company Disclosure Letter) or as required by to comply with applicable Law, unless Parent will shall otherwise agree in writing (which agreement will shall not be unreasonably withheld, delayed or conditioned), the Company will will, and will cause each Company Subsidiary to to, (a) conduct its operations only in the ordinary and usual course of business consistent with past practice and practice, (b) use commercially reasonable efforts to keep available the services of the current officers, employees and consultants of the Company and each Company Subsidiary and preserve the goodwill and current relationships of the Company and each Company Subsidiary with customers, suppliers and other Persons with which the Company or any Company Subsidiary has significant business relations, (ic) preserve substantially intact its business organization organization, and (iid) maintain and preserve its assets, properties and positive comply in all material business relationships (including employees)respects with all applicable Laws. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, Letter or as required expressly permitted by any other provision of this Agreement or as required by applicable LawAgreement, the Company will shall not and will cause each Company Subsidiary not to (unless required by applicable Law), and shall not permit any Company Subsidiary to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):Parent:
(a) amend the Company Charter or Company Bylaws otherwise change its articles of incorporation or code of regulations or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)documents;
(b) issue, deliver, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards Options outstanding as of the date hereof or pursuant to the ESPP in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylaws;
(ci) sell, pledge, dispose of, transfer, leaselease (as lessor), license license, guarantee or encumber any material property or assets of the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in a Permitted Lien), or authorize the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease (as lessor), license, guarantee or encumbrance of (other than a Permitted Lien), any material property or assets (including Intellectual Property Rights and Technology) of the Company or any Company Subsidiary, except (A) pursuant to existing contracts or commitments or the sale, lease, license purchase or encumbrance is individually other disposition of goods in the ordinary course of business consistent with past practice, (B) in connection with liens granted to secure Indebtedness permitted to be incurred pursuant to Section 5.1(h), and (C) sales, lease or other dispositions of assets other than in the ordinary course of business having a fair market value not in excess of $10,000,000, or 50,000 in the aggregate not in excess aggregate; or (ii) enter into any commitment or transaction outside the ordinary course of $20,000,000business consistent with past practice other than transactions between a wholly-owned Company Subsidiary and the Company or another wholly-owned Company Subsidiary;
(d) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between other than dividends paid by a wholly-owned Company Subsidiary to the Company and its Subsidiaries or between the another wholly-owned Company SubsidiariesSubsidiary) or enter into any agreement with respect to the voting or registration of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)stock;
(e) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or stock, other Equity Interests, Interests or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interestssecurities;
(f) merge or consolidate the Company or any Company Subsidiary with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization of the Company or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable LawCompany Subsidiary;
(g) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization Person or any Person (or any material portion of the assets division thereof, except as permitted by Section 5.1(i), other than (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee incur any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise as an accommodation become responsible for (whether directly, contingently or otherwise), the obligations of any Person (other than a wholly-owned Company Subsidiary) for borrowed money, in each case other than (A) any indebtedness except for borrowed money incurred by borrowings under the Company or any Company Subsidiary pursuant to the Existing Credit Facilities Company’s existing credit facilities for working capital purposes in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee refinancing of such indebtedness) solely between existing credit facilities so long as such refinancing does not result in aggregate Indebtedness greater than that outstanding as of the date of such refinancing or other terms less favorable to the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (ithan the existing credit facilities); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(ji) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person (other than any wholly-owned Company Subsidiary) in excess of $5,000,000 10,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(kj) terminate, cancel, modify or amend any Company Material Contractrenew, or cancel, modify, amend, release, assign request or waive agree to any rights material change in or claims waiver under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(lk) make or authorize any capital expenditure (i) in the aggregate (together with all previous capital expenditures) in excess of the Company’s capital expenditure budget set forth on Section 5.1(las disclosed to Parent prior to the date hereof or (ii) of the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, individually in excess of $5,000,00025,000;
(ml) except to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or its directors, officers, employees or consultants (except for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practicepractice in salaries or wages of employees (other than officers) of the Company or any Company Subsidiary), ; (Bii) grant any additional rights to severance or termination pay to, or enter into any employment, change in control, retention, severance or similar agreement with, any current or former director, officer officer, consultant or employee or other service provider of the Company or any Company Subsidiary (exceptSubsidiary, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, termination consulting, employment, change in control, retention, termination, severance or severance other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or consultant; (iii) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan; or (iv) terminate the employment (other service provider than for cause), change the title, office or position, or materially reduce the responsibilities of any management, supervisory or other key personnel of the Company or any Company Subsidiary Subsidiary;
(exceptm) forgive any loans to directors, officers, employees or any of their respective affiliates;
(xn) (i) pre-pay any long-term debt; (ii) waive, release, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except in the case ordinary course of group health business consistent with past practice and in accordance with their terms; (iii) accelerate or medical coverage subject to annual review delay collection of notes or accounts receivable in advance of or beyond their regular due dates or the dates when the same would have been collected in the ordinary course of business consistent with past practice, actions that would not increase the cost ; (iv) delay or accelerate payment of such group health any account payable in advance of its due date or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments such liability would have been paid in the ordinary course of business that are not consistent with past practice; or (v) vary its inventory practices in any material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or directorrespect from past practices;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures materially affecting the reported consolidated assets, liabilities or payment or collection results of accountsoperations of the Company, other than as required by GAAP or by applicable Lawa Governmental Entity; provided, that the Company shall promptly notify Parent in the event of any material change in accounting policies, practice, principles, methods or procedures;
(qp) waive, release, assign, commence, settle or compromise any material claims;
(q) compromise, settle or agree to settle any Proceeding suit, action, claim, proceeding or investigation (including any Proceeding suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 25,000 individually or $10,000,000 100,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, Company or any Company Subsidiary or any of their respective directors, officers, employees or agentsSubsidiary;
(r) (i) make or change any material Tax election, (ii) adopt tax election or change settle or compromise any material Tax accounting methodliability for Taxes, (iii) file any amended Tax Return involving a material amendment to a Tax Returnamount of additional Taxes (except as required by Law), (iv) enter into any closing agreement with relating to a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect amount of Taxes, or waive or extend the statute of limitations in respect of Taxes (vii) enter into any material other than pursuant to extensions of time to file Tax sharing or similar agreementReturns obtained in the ordinary course of business);
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, 25,000 except for depreciation and amortization in accordance with GAAP consistently applied; or;
(t) take any action (i) to make the Company subject (A) to the provisions of Section 1701.831 of the OGCL or (B) any other state takeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares or any action taken thereby, or (ii) to opt out of or cause the restrictions contained in Section 1704 of the OGCL to not apply to the Company or its shareholders;
(u) engage take any action that is intended or would reasonably be expected to result in any transactions, arrangements or understandings with any Affiliate or other Person that would be required of the conditions to be disclosed under Item 404 of Regulation S-K under the Securities ActMerger set forth in Article 6 not being satisfied;
(v) enter into convene any contract, make any commitment regular or take any action that requires consent of Apollo Global Management, LLC special meeting (or any of its affiliates pursuant to Section 3.2(gadjournment thereof) of the Preferred Certificate shareholders of Designationthe Company other than a shareholder meeting to adopt this Agreement and the Merger (if such a meeting is required by applicable Law);
(w) fail to keep in force insurance policies or replacement or revised provisions providing insurance coverage with respect to the assets, operations and activities of the Company and the Company Subsidiaries as are currently in effect;
(x) spend, or commit to spend, more than $25,000 on any information technology products or services; or
(y) authorize or any of, enter into any Contract to do any of, or otherwise make any commitment, in each case commitment to do any of of, the foregoing in clauses (a) through (v)foregoing.
Appears in 1 contract
Samples: Merger Agreement (Peco Ii Inc)
Conduct of Business by the Company Pending the Closing. (a) The Company covenants and agrees that, between the date of this Agreement and until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7VIII, except as set forth in Section 5.1 6.1(a) of the Company Disclosure Schedule, as otherwise expressly required or permitted by any other provision of this Agreement or Agreement, as required by applicable Law, unless Parent will otherwise agree Law or as consented to in writing by Parent (which agreement will consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company will will, and will cause each Company Subsidiary to (i) conduct its operations business in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve substantially intact its business organization practice, and (ii) maintain use its reasonable best efforts to keep available the services of the current officers, key employees and consultants of the Company and each Company Subsidiary and to preserve its assetsthe current relationships of the Company and each Company Subsidiary with each of the key customers, properties suppliers and positive other Persons with whom the Company or any Company Subsidiary has business relations that are material business relationships (including employees)to the Company or any Company Subsidiary, taken as a whole. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 6.1(a) of the Company Disclosure Schedule, as otherwise expressly required or permitted by any other provision of this Agreement or Agreement, as required by applicable LawLaw or as consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company will shall not, and shall not and will cause each permit any Company Subsidiary not to (unless required by applicable Law)to, between the date of this Agreement and until the earlier of the Effective TimeTime and the termination of this Agreement in accordance with Article VIII, directly or indirectly, do, or agree to do, take any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):actions:
(ai) amend or otherwise change the Company Charter or Company Bylaws Memorandum and Articles or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any the Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)Subsidiaries;
(bii) issue, deliver, sell, pledge, transfer, encumber or otherwise dispose of, grantor authorize, transfer propose or encumber, or authorize agree to the issuance, delivery, sale, pledge, disposition, grant, transfer, encumbrance or encumbrance disposition of, any shares of any class or series of its share capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any securities convertible into or exchangeable for, or options, warrants warrants, calls, commitments or other rights of any kind to acquire acquire, any shares of such any class or series of its share capital stock or other Equity Interests (other than (x) pursuant to the exercise or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), settlement of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Share Awards outstanding as of existing on the date hereof on the terms in accordance with their termseffect on the date hereof, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iiiy) expressly required under any Contract in effect on the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylawsdate hereof);
(c) sell, pledge, dispose of, transfer, lease, license or encumber any material property or assets of the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(diii) declare, set aside, establish a record date for, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its share capital stock or Equity Interests (except as between other than dividends paid by a Company Subsidiary to the Company and its Subsidiaries or between the to any other Company Subsidiaries) Subsidiary wholly-owned by Company), or enter into any agreement with respect to the voting of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)share capital;
(eiv) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire or offer to acquire, directly or indirectly, any of its share capital stock or other Equity Interests, or authorize securities convertible or propose the issuance of exchangeable into or exercisable for any other securities in respect of, in lieu of or in substitution for shares of its share capital stock or other Equity Interests, except pursuant to the exercise or settlement of Company Share Awards, employee severance, retention, termination, change of control and other contractual rights existing on the date hereof on the terms in effect on the date hereof;
(fv) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, including by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization Person or any Person (division thereof or any material portion of the assets thereof), other than (i) as required pursuant to the terms of or make any existing Company Material Contract to which the Company loan, advance or capital contribution to, or investment in, any Person or any Company Subsidiary is a party division thereof, except any such acquisitions, loans, advances, contributions or (ii) as required pursuant to the terms of any existing non-Company Material Contract, investments that are consistent with past practice and which acquisition is individually are for consideration not in excess of $10,000,000, 5,000,000 (or an equivalent amount in RMB) individually and $30,000,000 (or an equivalent amount in RMB) in the aggregate not in excess of $20,000,000for all such transactions by the Company and the Company Subsidiaries;
(hvi) enter into redeem, repurchase, prepay, defease, cancel, incur or otherwise acquire, or modify the terms of, any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money Indebtedness or issue or sell any debt securities (or rights to acquire debt securities) other Contracts evidencing Indebtedness or assume, guarantee or endorse, or otherwise become responsible for for, the obligations of any Person for borrowed moneyIndebtedness, in each case other than except for (A) Indebtedness incurred under the Company's or any indebtedness Company Subsidiary's existing credit facilities as in effect on the date hereof in an aggregate amount not to exceed the maximum amount authorized under the Contracts evidencing such Indebtedness, (B) Indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices in a principal amount not in excess of $200,000,000 (or an equivalent amount in RMB) for all such Indebtedness by the Company and the Company Subsidiaries in the aggregate and (C) Indebtedness owed by any wholly-owned Company Subsidiary to the Company or any other wholly-owned Company Subsidiary.
(vii) grant any Lien on any of its assets, other than Liens granted in connection with any Indebtedness permitted under Section 6.1(a)(vi);
(viii) sell, transfer, lease, license, assign or otherwise dispose of (including, by merger, consolidation, or sale of stock or assets) any entity, business, assets, rights or properties of the Company or any Company Subsidiary pursuant to having a current value in excess of $5,000,000 (or an equivalent amount in RMB) in the Existing Credit Facilities aggregate;
(ix) except for disclosure of confidential information in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee and pursuant to confidentiality agreements, and non-exclusive licenses of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from Intellectual Property granted by the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, sell, transfer, assign, license, grant any other rights (including any covenant not to sxx, option, right of first refusal, and right of first offer) under, or otherwise dispose of (including, by merger, consolidation or sale of stock or assets), abandon, permit to lapse, permit to be subject to any Lien, or fail to maintain or protect in full force and effect (including any failure to protect the confidentiality of), any Company Intellectual Property, or disclose to any Person any confidential information;
(x) authorize, or make any commitment with respect to, any single capital expenditure in excess of $5,000,000 (or an equivalent amount in RMB) or capital expenditures for the Company and the Company Subsidiaries in excess of $30,000,000 (or an equivalent amount in RMB) in the aggregate;
(xi) enter into any new line of business outside of its existing business segments that is material to the Company and the Company Subsidiaries taken as a whole;
(xii) except as otherwise required by Law or expressly required under any Contract in effect on the date hereof, (A) grant or announce any stock option, equity, equity-linked or incentive awards or change the vesting dates of any Company Share Awards from the vesting date for the Company Share Awards set forth in Section 4.2(a) of the Company Disclosure Schedule, (B) without prejudice subject to Section 5.1(i6.12(b), loans solely between grant or announce any increase in the Company salaries, bonuses or other compensation and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement benefits payable by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date employees, officers, directors, shareholders or other service providers of this Agreement the Company or any Company Subsidiary having a total annual base salary and which loan, guarantee, advance or capital contribution is individually not incentive compensation opportunity in excess of $10,000,0001,000,000 (or an equivalent amount in RMB), (C) hire (or in the aggregate not enter into any employment agreements with) any employees having a total annual base salary and incentive compensation opportunity in excess of $20,000,000 and 1,000,000 (or an equivalent amount in RMB), (D) extended pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other employee benefit not required by any existing Company Plan, (E) enter into or adopt any new, or materially increase benefits under or renew, amend or terminate any existing Company Plan or benefit arrangement or any collective bargaining agreement, or (F) take any action or fail to take any action which would (with the passage of time, the consummation of the transactions contemplated hereby or otherwise) require a payment terms or give rise to any rights of any Person in connection with the Transactions;
(xiii) except as may be required by GAAP or as a result of a change in Law, make any change in accounting principles, policies, practices, procedures or methods;
(xiv) materially change any method of Tax accounting, make or change any material Tax election, adopt or change any material accounting method, file any amended material Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of Taxes, enter into any material closing agreement with respect to any Tax, surrender any right to claim a material Tax refund, fail to pay any material Taxes as they become due and payable, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax;
(xv) settle, release, waive or compromise any pending or threatened Action of or against the Company or any of the Company Subsidiaries (A) for customers an amount in excess of $5,000,000 (or an equivalent amount in RMB) in the aggregate, (B) entailing the incurrence of (x) any obligation or liability of the Company or any Company Subsidiary in excess of such amount, or (y) obligations that would impose any material restrictions on the business or operations of the Company or any of the Company Subsidiaries, or (C) that is brought by or on behalf of any current, former or purported holder of any share capital or debt securities of the Company or any Company Subsidiary relating to the Transactions;
(xvi) (A) enter into (other than extensions at the end of a term in the ordinary course of business business), terminate or materially amend or modify any Company Material Contract, VIE Contract or Contract that, if in effect on the date hereof, would have been a Company Material Contract, or (B) waive any material default under, or release, settle or compromise any material claim against the Company or Company Subsidiary or liability or obligation owing to the Company or Company Subsidiary under any Company Material Contract or VIE Contract;
(xvii) fail to maintain in full force and effect material insurance policies covering the Company and the Company Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice;
(kxviii) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, adopt or enter into a plan of complete or amend any Contract thatpartial liquidation, if existing on the date hereofdissolution, would be a Company Material Contractmerger, in each case other than in the ordinary course of business consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Scheduleconsolidation, other than capital expenditures that are notrestructuring, in the aggregate, in excess of $5,000,000;
(m) except to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any director, officer, employee recapitalization or other service provider reorganization of the Company or any Company Subsidiary (exceptother than the Merger or any merger or consolidation among wholly-owned Subsidiaries of the Company);
(xix) fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(xx) take any action which would result in any of the conditions to the Merger set forth in Article VII not being satisfied or that would reasonably be expected to prevent, in materially delay or impair the case ability of individuals who are not officers the Company to consummate the Merger; or
(xxi) knowingly commit, authorize or directors, for increases in connection with promotions or periodic reviews in agree to take any of the ordinary course of business consistent with past practice), (B) grant any additional rights to severance or termination pay to, foregoing actions or enter into any severance letter of intent (binding or non-binding) or similar agreement withor arrangement with respect to any of the foregoing actions.
(b) Nothing contained in this Agreement is intended to give Parent, any directordirectly or indirectly, officer employee the right to control or other service provider direct the operations of the Company or any Company Subsidiary (exceptprior to the Effective Time. Prior to the Effective Time, in the case each of individuals who are not officers or directorsParent and Company shall exercise, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit terms and conditions of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees complete control and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies supervision over its and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their its respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their Subsidiaries’ respective directors, officers, employees or agents;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, in each case to do any of the foregoing in clauses (a) through (v)operations.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between Between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7, except as set forth in Section 5.1 of the Company Disclosure Schedule, Schedule or as otherwise expressly required by any other provision of this Agreement Agreement, or as required by applicable Law, unless with the prior written consent of Parent will otherwise agree in writing (which agreement will not to be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company will will, and will cause each Company Subsidiary to of its Subsidiaries to, (i) conduct its operations only in the ordinary course of business in a manner consistent with past practice and use commercially reasonable efforts to (i) preserve substantially intact its business organization practice, and (ii) maintain use its reasonable best efforts to keep available the services of the current officers, employees and consultants of the Company and each of its Subsidiaries and to preserve the goodwill and current relationships of the Company and each of its assetsSubsidiaries with customers, properties suppliers and positive material other Persons with which the Company or any of its Subsidiaries has business relationships (including employees)relations. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, Schedule or as otherwise expressly required by any other provision of this Agreement or as required by applicable LawAgreement, the Company will shall not, and shall not and will cause each Company Subsidiary not to (unless required by applicable Law)permit any of its Subsidiaries to, between the date of this Agreement and the earlier of the Effective TimeTime and the termination of this Agreement in accordance with Article 7, directly or indirectly, do, or agree to do, take any of the following actions without the prior written consent of Parent (which consent will not to be unreasonably withheld, delayed conditioned or conditioneddelayed):
(a) amend the Company Charter its certificate of incorporation or Company Bylaws bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect(including by merger, consolidation or otherwise);
(b) issue, deliver, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, encumber any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of its Subsidiaries of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), securities of the Company or any Company Subsidiaryof its Subsidiaries, other than (i) the issuance of Company Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards Options or the settlement of Company RSUs outstanding as of the date hereof in accordance with their existing terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylaws;
(c) sell, pledge, dispose of, transfer, lease, license license, guarantee or encumber any material property or assets of the Company or the Company any of its Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) Property), except pursuant to (i) pursuant to the express terms of any Company Material Contract in effect as of the date of this Agreement or hereof, (ii) any non-Company Material Contract, in effect as the sale or disposition of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license property or encumbrance is individually assets with a fair market value not in excess of $10,000,000, 50,000 individually or $250,000 in the aggregate not (including, for the avoidance of doubt, any sale or disposition of Equity Interests of Comvita New Zealand Limited), or (iii) the sale of inventory in excess the ordinary course of $20,000,000business;
(d) sell, assign, pledge, transfer, license, abandon, or otherwise dispose of any Intellectual Property of the Company or any of its Subsidiaries, except (i) the abandonment, in the ordinary course of business, of Company Owned Intellectual Property that in the Company’s reasonable business judgment is no longer used or useful in the business of the Company and its Subsidiaries and is no longer commercially practicable to maintain, and (ii) the non-exclusive licensing or sublicensing of Company Intellectual Property to affiliates, customers, distributors, and customers in the ordinary course of business;
(e) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or other Equity Interests (Interests, except as between for dividends paid by a wholly-owned Subsidiary of the Company and its Subsidiaries or between to the Company Subsidiaries) or enter into any agreement with respect to its capital stock or Equity Interests (except as between another wholly-owned Subsidiary of the Company and its Subsidiaries or between the Company Subsidiaries)Company;
(ef) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other Equity Interests, except (i) with respect to any wholly-owned Subsidiary of the Company or authorize (ii) the acceptance of Company Shares as payment for the exercise price of Company Options or propose for withholding taxes incurred in connection with the issuance exercise of any other securities in respect ofCompany Options or the settlement of Company RSUs, in lieu each case in accordance with past practice and the terms of or in substitution for shares of its capital stock or other the applicable Company Equity InterestsPlan and applicable award agreement(s);
(fg) merge or consolidate the Company or any of its Subsidiaries with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization of the Company or file a petition in bankruptcy or consent any of its Subsidiaries, except with respect to any wholly-owned Subsidiary of the filing of any bankruptcy petition under any applicable LawCompany;
(gh) directly or indirectly, acquire (including, without limitation, including by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization or any Person (or any material portion of the assets business line or division thereof)) or assets, other than (i) as required pursuant to acquisitions of inventory, raw materials and other property in the terms ordinary course of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or business and (ii) as required pursuant to the terms any other acquisitions with a purchase price of any existing non-Company Material Contract, and which acquisition is individually not in excess of less than $10,000,000, or 250,000 in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to the Companyaggregate;
(i) directly or indirectly, incur, assume or guarantee incur any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise as an accommodation become responsible for (whether directly, contingently or otherwise), the obligations of any Person (other than a wholly-owned Subsidiary of the Company) for borrowed money, except (i) in each case other than (A) any connection with refinancings of existing indebtedness for borrowed money incurred by on terms no less favorable to the Company (and in an aggregate principal amount not in excess of) such existing indebtedness, (ii) for borrowings under the Company’s existing credit facilities or any Company Subsidiary pursuant to the Existing Credit Facilities issuances of commercial paper for working capital and general corporate purposes in the ordinary course of business consistent with past practice or business, and (Biii) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States not to any Company Subsidiary located outside of the United States shall be limited to exceed $10,000,000 250,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person (other than any wholly-owned Subsidiary of the Company) in excess of $5,000,000 50,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify cancel or amend any Company Material Contractrenew, or cancel, modify, amend, release, assign agree to any material amendment to or waive any rights or claims waiver under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practicebusiness;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of as disclosed to Parent prior to the Company Disclosure Scheduledate hereof, other than capital expenditures that are not, in the aggregate, in excess of $5,000,00050,000;
(m) except to the extent required by (ix) applicable Law, or (iiy) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or disclosed in Section 3.11(a) of the Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay Disclosure Schedule as in existence on effect as of the date of this Agreementhereof: (Ai) increase the compensation or benefits payable or to become payable to any directorService Provider, officer, employee other than annual merit increases in annual base salary or base rate of pay for employees (other service provider of the Company or any Company Subsidiary (exceptthan officers), in the case of individuals who are not officers or directorseach case, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice), business; (Bii) grant amend any Company Benefit Plan (other than any administrative amendment that could not reasonably be expected result in a material additional rights cost to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider of the Company or any its affiliates, or obligate the Company Subsidiary (exceptor its affiliates to maintain such Company Benefit Plan beyond December 31, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice2017), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or new arrangement that if in effect on the date hereof would be a Company Benefit Plan (for the benefit avoidance of doubt, including, any directoremployment, officerseverance, employee change in control, retention, bonus guarantee or other service provider of the Company similar agreement or arrangement); (iii) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Subsidiary Benefit Plan (exceptincluding funding any grantor trust); (iv) pay or award, or commit to pay or award, any bonuses or incentive compensation (x) in the case of group health or medical coverage subject to other than annual review bonuses payable in the ordinary course of business consistent during the first quarter of the Company’s fiscal year); (v) grant any equity-based or equity-linked awards; (vi) enter into any collective bargaining agreement, or any works council, labor union or similar agreement or arrangement; (vii) hire or terminate the employment (other than for cause) of any officer or any Service Provider with past practiceannual compensation in excess of $100,000; or (viii) promote any officers or employees, actions that would not increase the cost except for a promotion of such group health or medical coverage plan by more than 5% or result in an employer/any employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material and prior notice of which is provided to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement)Parent;
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accountsprocedures, other than as required by GAAP or by applicable Lawa Governmental Entity;
(qo) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements of Proceedings (excluding Transaction Litigation) in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 25,000 individually or $10,000,000 50,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agentsits Subsidiaries;
(rp) (i) make make, change or change revoke any material Tax election, (ii) adopt or change any material of its methods of reporting income or deductions for Tax accounting methodpurposes (or file a request to make any such change), (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any material Tax liability, claim, audit or dispute, (iv) surrender any right to claim or assessment in a material Tax refund, (v) file any amended Tax Return with respect of material Taxesto any Tax, (vi) consent to enter into any extension Tax allocation, sharing, indemnity or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxesclosing agreement, or (vii) waive or extend the statute of limitations with respect to any Tax other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business;
(q) enter into any material Tax sharing new line of business or similar agreementmaterially alter any existing line of business, other than in the ordinary course of business;
(sr) voluntarily cancel, terminate or modify in any material respect any Insurance Policy, or fail to maintain renew (in a form and amount consistent with past practice) any Insurance Policy with at least substantially material insurance policies covering the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write upCompany, write down any of its Subsidiaries or write off the book value any of any tangible assetstheir respective businesses, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently appliedassets or properties; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(ws) authorize or enter into any Contract or otherwise make any commitment, in each case commitment to do any of the foregoing in clauses (a) through (v)foregoing.
Appears in 1 contract
Samples: Merger Agreement (Integra Lifesciences Holdings Corp)
Conduct of Business by the Company Pending the Closing. (a) The Company covenants and agrees that, between the date execution and delivery of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as set forth in Section 5.1 6.1(a) of the Company Disclosure ScheduleLetter, as otherwise required or expressly contemplated by this Agreement, as required by any other provision of this Agreement applicable Law or as required by applicable Law, unless Parent will otherwise agree consented to in writing (by Parent, which agreement will consent shall not be unreasonably withheld, delayed conditioned or conditioned)delayed, the Company will will, and will cause each Company Subsidiary to to, (i) conduct its operations business in the ordinary course of business consistent with past practice and (ii) use its commercially reasonable efforts to (i) keep available the services of the current officers and key employees of the Company and each Company Subsidiary and to preserve substantially intact its business organization the current relationships of the Company and (ii) maintain each Company Subsidiary with each of the customers, suppliers, distributors and preserve its assets, properties and positive other Persons with whom the Company or any Company Subsidiary has material business relationships (including employees)relations. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 6.1(a) of the Company Disclosure ScheduleLetter, as otherwise expressly contemplated by this Agreement, as required by any other provision of this Agreement applicable Law or as required consented to in writing by applicable LawParent, which consent shall not be unreasonably withheld, conditioned or delayed, the Company will shall not, and shall not and will cause each permit any Company Subsidiary not to (unless required by applicable Law)to, between the date execution and delivery of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, take any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):actions:
(ai) amend or otherwise change the Company Charter or Certificate of Incorporation, the Company Bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)Subsidiary;
(bii) issue, deliver, sell, pledge, dispose oftransfer, grant, transfer or encumber, modify the terms of or authorize otherwise dispose, or authorize, commit, propose or agree to the issuance, delivery, sale, pledge, disposition, grant, transfer, encumbrance, modification of the terms of or encumbrance disposition of, any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such its capital stock or other Equity Interests, or any securities convertible into or exchangeable for, or options, warrants warrants, calls, commitments or other rights of any kind to acquire acquire, any shares of such any class or series of its capital stock or other Equity Interests, including the issuance, sale or other transfer of any Equity Interests pursuant to or such convertible in settlement of any obligations under any Contract or exchangeable securities, or any other ownership interest commercial arrangement (including, without limitation, any such interest represented by Contract right), of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards outstanding as of the date hereof in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock issued upon the conversion of shares of Company Preferred Stock exercise in accordance with the terms of outstanding Company Charter Stock-Based Awards disclosed to Parent and Company Bylaws;
(c) sell, pledge, dispose of, transfer, lease, license or encumber any material property or assets of the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant granted prior to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000Agreement);
(diii) declare, set aside, establish a record date for, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or other Equity Interests, or make any other actual, constructive or deemed distribution in respect of its capital stock or other Equity Interests (except as between other than cash dividends paid by a wholly-owned domestic Company Subsidiary to the Company and its Subsidiaries or between the to any other wholly-owned domestic Company Subsidiaries) Subsidiary), or enter into any agreement agreement, understanding or arrangement with respect to the voting or registration of its capital stock or other Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)Interests;
(eiv) reclassify, adjust, combine, split, adjust, subdivide or amend the terms of, or redeem, purchase or otherwise acquire or offer to acquire, directly or indirectly, any of its capital stock or other Equity Interestssecurities, or authorize securities convertible or propose the issuance of exchangeable into or exercisable for any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interestssecurities;
(fv) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, including by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any businessPerson or any division thereof or any assets thereof or enter into any joint venture, divisionlegal partnership (excluding, organization for the avoidance of doubt, strategic relationships, alliances, reseller agreements and similar commercial relationships) or similar arrangement with any Person, except for any purchases of inventory from suppliers in the ordinary course of business consistent with past practice pursuant to agreements existing as of the date of this Agreement (or that are subsequently entered into by the Company without breaching this Agreement);
(vi) make any loans, advances or capital contributions to or investments in any Person (other than loans or advances by the Company to any material portion direct or indirect wholly-owned Subsidiary of the assets thereof), other than (iCompany) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or 50,000 in the aggregate not in excess of $20,000,000aggregate;
(hvii) enter into any new line of business that is material to the Company;
(i) directly or indirectlyredeem, repurchase, prepay, defease, cancel, incur, assume or guarantee otherwise acquire, or modify the terms of, any indebtedness for borrowed money Indebtedness (including any long-term or short-term debt) or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become liable or responsible for (whether directly, contingently or otherwise), the obligations of any Person for borrowed moneyIndebtedness, in each case other than (A) any indebtedness except for borrowed money the incurrence of Indebtedness incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between under the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers credit facilities in the ordinary course of business consistent with past practice;
(kviii) terminategrant any Encumbrance on any of its assets, canceltangible or intangible, modify other than Encumbrances granted in connection with any Indebtedness permitted under Section 6.1(a)(vii);
(ix) other than the sale, lease or amend licensing of products or services of the Company and the Company Subsidiaries in the ordinary course of business consistent with past practice, sell, transfer, lease, abandon, exchange, mortgage, pledge, guarantee, license, assign or otherwise dispose of or encumber (including, by merger, consolidation, or sale of stock or assets) any entity, business, assets, rights or properties of the Company or any Company Material ContractSubsidiary;
(x) authorize, incur or cancelmake any commitment with respect to, modifyany single capital expenditure in excess of $150,000 or capital expenditures for the Company and the Company Subsidiaries in excess of $350,000 in the aggregate, amendexcept for capital expenditures in accordance with the Company’s plan for annual capital expenditures for 2016 set forth on Section 6.1(a)(x) of the Company Disclosure Letter;
(xi) enter into any new line of business or materially change any existing line of business;
(xii) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor or waive, release, assign grant or waive transfer any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contractright of material value, in each case other than in the ordinary course of business;
(A) except to the extent required by a Company Plan, (1) grant, announce or effect any increase in the salaries, bonuses or other compensation and benefits payable by the Company or any Company Subsidiary to any of the employees, officers, directors or other service providers of the Company or any Company Subsidiary, pay any special bonus or special remuneration to any director, officer or employee, or pay any benefit not required by (or accelerate the time of payment or vesting of any payment becoming due under) any Company Plan as in effect as of the date of this Agreement; or (2) except as otherwise set forth in this Section 6.1(a)(xiii), enter into, adopt, amend (including accelerating the vesting), modify or terminate any Company Plan, (B) hire any new employees, unless such hiring is in the ordinary course of business consistent with past practice and is with respect to employees having an annual base salary opportunity not to exceed $125,000, (C) enter into any change in control, severance or similar agreement or any retention or similar agreement with any officer, employee, director or independent contractor or (D) enter into any collective bargaining Contract or agreement to form a work council or other agreement with any labor organization or works council;
(xiv) except as may be required by GAAP or as required by a change in Law, (A) make any change in accounting principles, policies, practices, procedures or methods or (B) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(lxv) make (A) change any material method of Tax accounting, (B) file any amended Tax Return or authorize any capital expenditure other Tax Return that could materially increase the Taxes payable by the Company or its Subsidiaries, (C) change any material Tax election, (D) consent to any extension or waiver of any limitation period with respect to any material Tax, Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns), (E) settle, consent to or compromise any material Tax liability, claim or assessment, (F) enter into any closing agreement with respect to any material Tax or (G) surrender any right to claim a material Tax refund;
(xvi) settle, release, discharge, waive or compromise any pending or threatened Action of or against the Company or any of the Company Subsidiaries (A) requiring a monetary payment in an amount in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are not, $50,000 individually and $100,000 in the aggregate, (B) that requires the incurrence of (1) any obligation or liability of the Company in excess of $5,000,000such amounts, including costs or revenue reductions or (2) obligations that would impose any material restrictions on the business or operations of the Company or any of the Company Subsidiaries, (C) involves any non-monetary relief or remedy, including any injunctive relief, or (D) that is brought by any current, former or purported holder of any capital stock or debt securities of the Company or any Company Subsidiary relating to the transactions contemplated by this Agreement, including any Transaction Litigation;
(mxvii) except to the extent required by (i) applicable Lawenter into, (ii) the existing terms of terminate, renew, extend or materially amend or modify or waive any material rights or obligations under any Company Benefit PlanMaterial Contract or any Contract that, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay if in existence effect on the date of this Agreement: , would have been a Company Material Contract;
(Axviii) increase fail to maintain in full force and effect material insurance policies covering the compensation Company and the Company Subsidiaries and their respective properties, assets and businesses at levels that are at least at current levels and in any event in a form and amount consistent with past practice;
(xix) adopt or benefits payable enter into a plan of complete or to become payable to any directorpartial liquidation, officerdissolution, employee merger, consolidation, restructuring, recapitalization or other service provider reorganization of the Company or any Company Subsidiary (exceptother than the Merger);
(xx) enter into, in adopt or implement any “poison pill” or similar stockholder rights plan;
(xxi) (A) sell, assign or transfer all or any portion of its or any of the case of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice)Company Subsidiaries’ Intellectual Property, (B) grant any additional rights to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider licenses of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants Intellectual Property except for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review non-exclusive licenses granted in the ordinary course of business consistent with past practice, actions that would not increase (C) abandon or cease to prosecute or maintain any of the cost of such group health Company Registered Intellectual Property or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement any other Intellectual Property that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and conduct of the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards Business or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate disclose any Company Benefit Plan trade secrets or Foreign Benefit Plan (except as contemplated by this Agreement)other material confidential information to any Person that is not subject to a legally-binding confidentiality obligation with respect thereto;
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(uxxii) engage in any transactionstransaction with, arrangements or understandings with enter into any agreement, arrangement or understanding with, any Affiliate of the Company or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed under pursuant to Item 404 of Regulation S-K under the Securities Act404;
(vxxiii) enter into effectuate a “plant closing,” “mass layoff” (each as defined in WARN) or other employee layoff event affecting in whole or in part any contractsite of employment, make any commitment facility, operating unit or employee; or
(xxiv) commit, authorize or agree to take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize foregoing actions or enter into any Contract letter of intent (binding or otherwise make any commitmentnon-binding) or similar agreement.
(b) Nothing contained in this Agreement is intended to give Parent, in each case directly or indirectly, the right to do any control or direct the operations of the foregoing in clauses (a) through (v)Company or any Company Subsidiary prior to the Effective Time. Prior to the Effective Time, each of Parent and Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and the Company Subsidiaries’ respective operations.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. (a) The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the valid termination of this Agreement in accordance with Article 7Section 7.01, except as set forth in Section 5.1 5.01 of the Company Disclosure Schedule, as required expressly permitted by any other provision of this Agreement or as required by applicable Law, unless Parent will shall otherwise agree in writing (which agreement will not be unreasonably withheld, delayed or conditioned)writing, the Company will shall, and will shall cause each Company Subsidiary to (i) conduct its operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve substantially intact its business organization and practice, (ii) maintain all material Company Permits, and (iii) use reasonable best efforts to keep available the services of its and the Company Subsidiaries’ officers and key employees, and preserve its assetstheir goodwill, properties assets and positive technology, as well as their relationships with customers, suppliers, licensors, licensees, resellers and others having material business relationships (including employees)dealings with them. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 5.01 of the Company Disclosure Schedule, as required expressly permitted by any other provision of this Agreement or as required by applicable Law, subject to Section 5.01(b), the Company will not shall not, and will shall cause each Company Subsidiary not to (unless required by applicable Law)to, between the date of this Agreement and the earlier of the Effective TimeTime and valid termination of this Agreement in accordance with Section 7.01, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):Parent:
(ai) amend or otherwise change the Company Charter Certificate or Company Bylaws or any certificate of incorporation or bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)Subsidiary;
(bii) issue, deliver, sell, pledge, dispose of, grant, transfer or encumberotherwise subject to any Lien, or authorize the issuance, delivery, sale, pledge, disposition, grant, transfer, or encumbrance subjection to any Lien of, any shares of capital stock of, or other Equity Interests in, in the Company or any Company Subsidiary of any class, or any securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, securities or any other ownership interest (including, without limitation, including any such interest represented by Contract rightrights), of the Company or any Company Subsidiary, other than (iw) the issuance of Shares upon the vesting, exercise or settlement or the exercise of Company Accelerated Equity Awards Options, Company RSUs and Company Performance RSUs that are outstanding on the date of this Agreement solely in accordance with their terms as of the date hereof of this Agreement, (x) pursuant to, and in accordance with, the ESPP and (y) grants of Company RSUs in accordance with their terms, (iiSection 5.01(a)(ii) transactions between of the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or Disclosure Schedule;
(iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylaws;
(c) sell, lease, license, transfer or otherwise dispose of, allow to lapse or expire, pledge, dispose of, transfer, lease, license mortgage or otherwise encumber or subject to any material property or assets of the Company or the Company Subsidiaries Lien (other than non-exclusive grants of a Permitted Lien), any Company Intellectual Property Rights or Software or any other material properties, rights or assets (including shares of capital stock or other Equity Interests of a Company Subsidiary), other than (A) Services Agreements in the ordinary course of business, or (B) except pursuant to (i) transfers among the Company and its direct or indirect wholly-owned Company Subsidiaries, in each case, excluding entering into any reseller or hosting agreement under which the Company or any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000Subsidiary will distribute software to a third party;
(div) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any shares of its capital stock or other Equity Interests (except as between other than dividends paid by a wholly-owned Company Subsidiary to the Company and its Subsidiaries or between another wholly-owned Company Subsidiary in the Company Subsidiariesordinary course of business consistent with past practice) or enter into any agreement Contract with respect to the voting or registration of its capital stock;
(A) except as required by the terms of the instruments governing such securities as of the date of this Agreement, redeem, purchase or otherwise acquire any outstanding shares of capital stock or other Equity Interests (except as between of the Company or any Company Subsidiary, except in connection with the exercise or settlement of any Company Option, Company RSUs or Company Performance RSUs, in each case that are outstanding on the date of this Agreement, or are issued thereafter in compliance with the terms of this Agreement, and its Subsidiaries solely in accordance with their terms as of the date of this Agreement; or between the Company Subsidiaries);
(eB) reclassify, adjust, combine, split, subdivide subdivide, adjust or amend the terms rights of, or redeem, purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or other Equity Interests, Interests of the Company or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity InterestsCompany Subsidiary;
(fvi) merge or consolidate the Company or any Company Subsidiary with any Person third party or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization of the Company or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable LawCompany Subsidiary;
(gvii) directly or indirectly, acquire (including, without limitation, including by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization Person or any Person (division thereof, or any material portion of the assets thereof), (other than (i) as required pursuant to the terms acquisitions of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become responsible for the obligations of any Person for borrowed money, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities assets in the ordinary course of business consistent with past practice practice);
(viii) incur, create, assume or (B) otherwise become liable for any indebtedness for borrowed money (Indebtedness, including through borrowings under any of the Company’s existing credit facilities, or issue or sell options, warrants, calls or other rights to acquire any Indebtedness of the Company or any guarantee of such indebtedness) solely between the Company and a wholly owned Subsidiaries, or take any action that would result in any amendment, modification or change of any term of any Indebtedness of the Company Subsidiary or between wholly owned any of the Company Subsidiaries which indebtedness is incurred in compliance with this clause Subsidiaries;
(i); except that ix) repurchase, prepay or amend or modify the terms of any loan from Indebtedness of the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregateSubsidiary;
(jx) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, (other than (Ax) immaterial loans advancement of expenses to Company Employees in connection with the performance of their duties or advances (y) to employees or independent contractors any wholly-owned Company Subsidiary in the ordinary course of business consistent with past practice, );
(Bxi) without prejudice to Section 5.1(iterminate (other than by expiration in accordance with its terms), loans solely between the Company and its wholly-owned Subsidiaries cancel, materially amend or between the Company’s wholly-owned Subsidiaries, (C) without prejudice agree to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company material change in or material waiver under any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loanor enter into any Contract that would constitute a Company Material Contract (other than entering into, guarantee, advance amending or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers supplementing Services Agreements in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be practice that are not otherwise a Company Material Contract, ); provided that the Company may materially amend a Company Material Contract described in each case other than in the ordinary course Section 3.13(a)(xviii) where such amendment does not otherwise render such Contract a Company Material Contract pursuant to any of business consistent with past practiceclauses (a)(i)-(xvii) or (a)(xx)-(xxxii) of Section 3.13;
(lxii) make make, commit to or authorize any capital expenditure expenditures that (A) involve the purchase of real property or (B) are in excess of the Company’s projected capital expenditure budget set forth on expenditures by more than 15% as disclosed in Section 5.1(l5.01(a)(xii) of the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,000;
(mxiii) except to the extent required by (iA) applicable Law, (iiB) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) as in effect on the date of this Agreement and as disclosed in Section 3.11(a) of the Company Disclosure Schedule or (ivC) contractual commitments under Contracts of the Company or any Company Subsidiary or policies with respect to severance or termination pay in existence on the date of this Agreement: (A, in each case, as disclosed in Section 3.11(a) increase the compensation or benefits payable or to become payable to any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews Disclosure Schedule and as implemented in the ordinary course of business consistent with past practicepractice (I) increase the compensation or benefits (including bonus and incentive award opportunities) payable or to become payable to its directors, officers or employees (or any of their dependents or beneficiaries) (except as set forth in Section 5.01(a)(xiii) of the Company Disclosure Schedule), (BII) grant any additional rights to severance or termination pay to, or enter into any employment or severance agreement with, any director, officer officer, stockholders, independent contractors, consultants or employee or other service provider of the Company or any Company Subsidiary (except, or any of their respective dependents or beneficiaries) (other than any agreement with a non-U.S. employee of the Company or any Company Subsidiary hired after the date of this Agreement and entered into in the case ordinary course of individuals who are not officers or directorsbusiness providing for notice of termination, such grants for payment in lieu of notice, severance or other termination pay to a new hire benefits required by applicable Law in the jurisdiction of employment of such employee or that is otherwise upon terms that are consistent with the Company forms made available to Parent prior to the date of this Agreement for employees in connection the jurisdiction of employment of such employee) containing severance protection above what is required under applicable Law, or establish, adopt, enter into or amend any plan, program or arrangement that would be a Company Benefit Plan, Company Compensation Arrangement or Company Stock Option Plan if in existence on the date hereof, (III) except as contemplated in Section 2.04, take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under, or issue new performance goals under, any Company Benefit Plan, Company Compensation Arrangement or Company Stock Option Plan, or (IV) terminate the employment of any executive officer other than for “cause”;
(xiv) hire any Person for employment with promotions the Company or any Company Subsidiary at a level of senior vice president or higher; provided, that the Company and the Company Subsidiaries may hire any Person for employment at the senior vice president level or higher to fill any currently existing senior vice president position that becomes vacant after the date hereof;
(xv) make any material changes in financial accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by GAAP, applicable Law or regulatory guidelines (in each case following consultation with the Company’s independent auditor);
(xvi) waive, relinquish, release, transfer or assign any right with a value of more than $250,000 in any individual case or series of related cases or $750,000 in the aggregate; provided that actions addressed by another subsection of this Section 5.01(a) shall not count towards such amounts;
(xvii) pay, discharge, compromise, settle or satisfy any Actions in excess of $250,000 in any individual case or series of related cases or $750,000 in the aggregate, other than claims incurred since the date of the Most Recent Balance Sheet in the ordinary course of business consistent with past practice; provided that, the payment, discharge, settlement or satisfaction of such Action does not include any obligation (other than the payment of money) to be performed by the Company or any Company Subsidiary, and; provided further that the amount of any payment for which the Company receives indemnity reimbursement from an escrow fund established pursuant to an acquisition shall not count towards the settlement thresholds set forth above;
(xviii) (A) make, change or revoke any material Tax election, change any annual Tax accounting period or change any method of Tax accounting, (B) enter into any “closing agreement” as described in Section 7121 of the Code (or any comparable or similar provisions of applicable Law), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, Tax allocation agreement, trustTax sharing agreement or Tax indemnity agreement, fund(D) settle or compromise any Liability with respect to Taxes or audit or assessment related to Taxes or file or surrender any claim for a refund of Taxes (including any such refund to the extent it is used to offset or otherwise reduce Tax Liability), policy (E) file any amended Tax Return or arrangement file any claim for the benefit of Tax refunds, (F) consent to any director, officer, employee extension or other service provider waiver of the Company limitations period applicable to any claim or any Company Subsidiary assessment with respect of Taxes; or (except, (xG) in the case of group health or medical coverage subject to annual review other than in the ordinary course of business consistent with past practice, actions take any action that would not increase voids, lessens or impedes the cost use or value of such group health any Tax incentives, Tax credits, Tax losses, deferred Tax assets or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more other favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement)Tax benefit;
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(txix) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,0001,000,000, except (A) for depreciation and amortization in accordance with GAAP consistently appliedapplied or (B) as otherwise required under GAAP;
(xx) convene any regular or special meeting (or any adjournment thereof) of the stockholders of the Company other than the Special Meeting and, if the Closing has not occurred by June 30, 2018, the Company’s 2018 annual meeting of stockholders;
(xxi) take any action to exempt or make not subject to (A) the provisions of Section 203 of the DGCL or (B) any other Takeover Law, any Person (other than Guarantor, Parent, Merger Sub or any Parent Affiliate) or any action taken by such Person, which Person or action would otherwise have been subject to the restrictive provisions thereof and not exempt therefrom;
(xxii) engage in any of the following activities in any material respect that is outside the ordinary course of business consistent with past practice: (A) any promotional sales or discount activity with any customers with the intent of accelerating to prior fiscal quarters (including the current fiscal quarter) sales that would otherwise be expected (based on past practice) to occur in subsequent fiscal quarters, (B) any practice that would have the effect of accelerating to prior fiscal quarters (including the current fiscal quarter) collections of receivables that would otherwise be expected (based on past practice) to be made in subsequent fiscal quarters, (C) any practice that would have the effect of postponing to subsequent fiscal quarters payments by the Company or any of the Company Subsidiaries that would otherwise be expected (based on past practice) to be made in prior fiscal quarters (including the current fiscal quarter) or (D) any other promotional sales or discount activity in a manner outside the ordinary course of business consistent with past practice;
(xxiii) with respect to Registered Company Intellectual Property or other material Company Owned Intellectual Property, (A) encumber, impair, abandon, fail to diligently maintain, transfer or otherwise dispose of any right, title or interest of the Company or any of the Company Subsidiaries in any Company Intellectual Property (other than in the ordinary course of business consistent with past practice in connection with the license, distribution or sale of any of the Company Products or services, or the abandonment of any Trademarks that the Company, in its reasonable business judgment, believes are not material and no longer worthwhile to the Company), or (B) divulge, furnish to or make accessible any Trade Secrets within the Company Intellectual Property to any Person who is not subject to a valid and enforceable written obligation to maintain the confidentiality of such Trade Secrets; or
(uxxiv) engage agree in writing or otherwise commit to take any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;actions restricted in the foregoing clauses of this Section 5.01.
(vb) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or If the Company delivers written notice to any of its affiliates pursuant to the individuals specified in Section 3.2(g5.01(b) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, in each case Company Disclosure Schedule with a copy to do counsel to Parent and counsel to the Company requesting a consent to permit any of the foregoing actions proscribed in clauses Section 5.01(a)(ix), (axi), (xii), (xiii), (xiv), (xvi), (xvii), (xviii), (xix), (xxii) through and (vxxiv), Parent shall not unreasonably withhold, delay or condition such consent.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. (a) The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as set forth in Section 5.1 6.1(a) of the Company Disclosure Schedule, as required otherwise expressly permitted by any other provision of this Agreement or Agreement, as required by applicable Law, unless Parent will otherwise agree Law or as consented to in writing by Parent (which agreement will consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company will will, and will cause each Company Subsidiary to (i) conduct its operations business in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve substantially intact its business organization in all material respects and (ii) maintain use its reasonable best efforts to keep available the services of the current officers, key employees and consultants of the Company and each Company Subsidiary and to preserve its assetsthe current relationships of the Company and each Company Subsidiary with each of the key customers, properties suppliers and positive other Persons with whom the Company or any Company Subsidiary has material business relationships (including employees)relations. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 6.1(a) of the Company Disclosure Schedule, as required otherwise expressly permitted by any other provision of this Agreement or Agreement, as required by applicable LawLaw or as consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company will shall not, and shall not and will cause each permit any Company Subsidiary not to (unless required by applicable Law)to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, take any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):actions:
(ai) amend or otherwise change the Company Charter or Articles of Incorporation, the Company Bylaws By-laws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any the Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)Subsidiaries;
(bii) issue, deliver, sell, pledge, transfer, encumber or otherwise dispose of, grantor authorize, transfer propose or encumber, or authorize agree to the issuance, delivery, sale, pledge, disposition, grant, transfer, encumbrance or encumbrance disposition of, any shares of capital stock of, any class or other Equity Interests in, the Company or any Company Subsidiary series of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such its capital stock or other Equity Interests, or any securities convertible into or exchangeable for, or options, warrants warrants, calls, commitments or other rights of any kind to acquire acquire, any shares of such any class or series of its capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or pursuant to the exercise of Company Accelerated Equity Awards outstanding as of Options existing on the date hereof on the terms in accordance with their terms, (ii) transactions between effect on the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylawsdate hereof);
(c) sell, pledge, dispose of, transfer, lease, license or encumber any material property or assets of the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(diii) declare, set aside, establish a record date for, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between other than dividends paid by a Subsidiary to the Company and its Subsidiaries or between to any wholly-owned Subsidiary of the Company Subsidiaries) Company), or enter into any agreement with respect to the voting of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)stock;
(eiv) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire or offer to acquire, directly or indirectly, any of its capital stock or other Equity Interests, or authorize securities convertible or propose the issuance of exchangeable into or exercisable for any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interests, except pursuant to the exercise or settlement of Company Options, employee severance, retention, termination, change of control and other contractual rights existing on the date hereof on the terms in effect on the date hereof;
(fv) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, including by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization Person or any Person (division thereof or any material portion of the assets thereof), other than (i) as required pursuant to the terms of or make any existing Company Material Contract to which the Company loan, advance or capital contribution to, or investment in, any Person or any Company Subsidiary is a party division thereof, except any such acquisitions, loans, advances, contributions or (ii) as required pursuant to the terms of any existing non-Company Material Contract, investments that are consistent with past practice and which acquisition is individually are for consideration not in excess of $10,000,000, 300,000 (or an equivalent amount in RMB) individually or $1,000,000 (or an equivalent amount in RMB) in the aggregate not in excess of $20,000,000for all such transactions by the Company and the Company Subsidiaries;
(hvi) enter into redeem, repurchase, prepay, defease, cancel, incur or otherwise acquire, or modify the terms of, any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money Indebtedness or issue or sell any debt securities (or rights to acquire debt securities) other Contracts evidencing Indebtedness or assume, guarantee or endorse, or otherwise become responsible for for, the obligations of any Person for borrowed moneyIndebtedness, in each case other than except for (A) Indebtedness incurred under the Company's or any indebtedness Company Subsidiary's existing credit facilities as in effect on the date hereof in an aggregate amount not to exceed the maximum amount authorized under the Contracts evidencing such Indebtedness, (B) Indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money practices in a principal amount not in excess of $1,000,000 (or any guarantee of an equivalent amount in RMB) for all such indebtedness) solely between Indebtedness by the Company and a wholly the Company Subsidiaries in the aggregate and (C) Indebtedness owed by any Company Subsidiary to the Company or any wholly-owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred Subsidiary;
(vii) grant any Lien on any of its assets, other than Liens granted in compliance connection with this clause (iany Indebtedness permitted under Section 6.1(a)(vi); except that , any loan from Lien on any assets of the Company or any Company Subsidiary located having a value in excess of $3,500,000 (or an equivalent amount in RMB), and (C) any Permitted Encumbrances;
(viii) sell, transfer, lease, license, assign or otherwise dispose of (including, by merger, consolidation, or sale of stock or assets) any entity, business, tangible assets or tangible properties of the United States to Company or any Company Subsidiary located outside having a current value in excess of $1,000,000 (or an equivalent amount in RMB) in the United States shall be limited aggregate (other than the sale of inventory in the ordinary course of business consistent with past practice);
(ix) sell, transfer, license, assign or otherwise dispose of (including, by merger, consolidation or sale of stock or assets), abandon, permit to lapse or fail to maintain or enforce any material Company Intellectual Property owned by the Company or a Company Subsidiary (except the granting of nonexclusive licenses in the ordinary course of business consistent with past practice), or disclose to any Person any confidential information (except pursuant to confidentiality agreements);
(x) authorize, or make any commitment with respect to, any single capital expenditure in excess of $10,000,000 100,000 (or an equivalent amount in RMB) or capital expenditures for the Company and the Company Subsidiaries in excess of $400,000 (or an equivalent amount in RMB) in the aggregate;
(jxi) make enter into any loansnew line of business outside of its existing business segments;
(xii) (A) grant or announce any stock option, guaranteesequity, advances equity-linked or capital contributions toincentive awards or change the vesting dates of any Company Option or Company Restricted Share from the vesting date for the Company Options and Company Restricted Shares set forth in Section 4.2(a) of the Company Disclosure Schedule, (B) subject to Section 6.12(b), grant or investments inannounce any increase in the salaries, bonuses or other compensation and benefits payable by the Company or any Company Subsidiary to any of the employees, officers, directors, shareholders or other Person service providers of the Company or any Company Subsidiary having a total annual base salary and incentive compensation opportunity in excess of $5,000,000 100,000 (or an equivalent amount in the aggregateRMB), other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(ihire (or enter into any employment agreements with) any employees having a total annual base salary and incentive compensation opportunity in excess of $100,000 (or an equivalent amount in RMB), (iD) as pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other employee benefit not required pursuant to the terms of by any existing Company Material Contract Plan or (E) enter into or adopt any new, or materially increase benefits under or renew, amend or terminate any existing Company Plan or benefit arrangement or any collective bargaining agreement;
(xiii) except as may be required by GAAP or as a result of a change in Law, make any change in accounting principles, policies, practices, procedures or methods;
(xiv) change any method of Tax accounting, make or change any Tax election, adopt or change any accounting method, file any amended Tax Return, settle or compromise any Tax liability, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of Taxes, enter into any closing agreement with respect to any Tax, surrender any right to claim a Tax refund or fail to pay any material Taxes as they become due and payable, except Taxes which are being or may after the date hereof be contested in good faith;
(xv) settle, release, waive or compromise any pending or threatened Action of or against the Company or any of the Company Subsidiary is a party Subsidiaries (A) for an amount in excess of $500,000 (or an equivalent amount in RMB) in the aggregate, (B) entailing the incurrence of (x) any Company Material Contract entered into after the date obligation or liability of this Agreement by the Company or any Company Subsidiary in compliance with excess of such amount, including costs or revenue reductions, or (y) obligations that would impose any material restrictions on the terms business or operations of the Company or any of the Company Subsidiaries, or (C) that is brought by or on behalf of any current, former or purported holder of any capital stock or debt securities of the Company or any Company Subsidiary relating to the transactions contemplated by this Agreement;
(xvi) or (iiA) as required pursuant to enter into, terminate (other than extensions at the terms end of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers a term in the ordinary course of business consistent with past practice;
(kbusiness) terminateor materially amend or modify any Company Material Contract or Contract that, cancelif in effect on the date hereof, modify or amend any would have been a Company Material Contract, or cancel(B) waive any material default under, modify, amend, or release, assign settle or waive compromise any rights material claim against the Company or claims liability or obligation owing to the Company under any Company Material Contract, in each case, which would reasonably be expected to adversely impact the Company or any Company Subsidiary in any material respect;
(xvii) adopt or enter into a plan of complete or amend any Contract thatpartial liquidation, if existing on the date hereofdissolution, would be a Company Material Contractmerger, in each case other than in the ordinary course of business consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Scheduleconsolidation, other than capital expenditures that are notrestructuring, in the aggregate, in excess of $5,000,000;
(m) except to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any director, officer, employee recapitalization or other service provider reorganization of the Company or any Company Subsidiary (exceptother than the Merger or any merger or consolidation among wholly-owned Subsidiaries of the Company); or
(xviii) knowingly commit, in authorize or agree to take any of the case of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice), (B) grant any additional rights to severance or termination pay to, foregoing actions or enter into any severance letter of intent (binding or non-binding) or similar agreement withor arrangement with respect to any of the foregoing actions.
(b) Nothing contained in this Agreement is intended to give Parent, any directordirectly or indirectly, officer employee the right to control or other service provider direct the operations of the Company or any Company Subsidiary (exceptprior to the Effective Time. Prior to the Effective Time, in the case each of individuals who are not officers or directorsParent and Company shall exercise, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit terms and conditions of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees complete control and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies supervision over its and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their its respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their Subsidiaries' respective directors, officers, employees or agents;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, in each case to do any of the foregoing in clauses (a) through (v)operations.
Appears in 1 contract
Samples: Merger Agreement (China Fire & Security Group, Inc.)
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees the Operating Partnership agree that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required permitted by any other provision of this Agreement or as required by applicable LawLaw or the regulations or requirements of the NYSE, unless Parent will shall otherwise agree in writing (which agreement will shall not be unreasonably withheld, delayed withheld or conditioneddelayed), the Company will and the Operating Partnership will, and will cause each Company Subsidiary to to, (a) conduct its operations in the ordinary course of business substantially consistent with past practice and (b) use its commercially reasonable efforts to (i) preserve substantially intact its business organization and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees)goodwill. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required permitted by any other provision of this Agreement or as required by applicable LawLaw or the regulations or requirements of the NYSE, the Company will and the Operating Partnership shall not, and shall not and will cause each permit any Company Subsidiary not to (unless required by applicable Law)to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will shall not be unreasonably withheldwithheld or delayed):
Section 5.1.1 amend or otherwise change the Company Charter, delayed the Company Bylaws, the Operating Partnership Certificate or conditioned):the Operating Partnership Agreement, except for amendments to the Operating Partnership Agreement to reflect transfers or redemptions of Partnership Units in accordance with the terms of the Operating Partnership Agreement;
(a) amend the Company Charter or Company Bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect);
(b) issue, deliver, sell, pledge, dispose of, grant, transfer or encumber, issue or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, issuance of (i) any shares of beneficial interest or capital stock of, or other Equity Interests in, the Company Company, the Operating Partnership or any Company Subsidiary of any classclass (other than the issuance of Company Common Shares in exchange for Partnership Units in accordance with the Operating Partnership Agreement, the issuance of Company Common Shares in accordance with the Company’s Non-employee Trustee Compensation Policy, and the issuance of Partnership Units in consideration of the acquisition of the Republic Square I property pursuant to the option agreement with respect thereto or otherwise), (ii) any securities convertible into, or exchangeable or exercisable for, for any such shares of such beneficial interest or capital stock or other Equity Interests, Interests or (iii) any options, warrants or other rights of any kind to acquire any such shares of such beneficial interest or capital stock or other Equity Interests or such convertible or exchangeable securitiesInterests, or any other ownership interest (including, without limitation, any such interest represented by Contract right), of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards outstanding as of the date hereof in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylaws;
(cb) sell, pledge, dispose of, transfer, lease, license license, guarantee or encumber any material property encumber, or assets of authorize the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license license, guarantee or encumbrance is individually not in excess of, any material property or assets of $10,000,000the Company, the Operating Partnership or in the aggregate not in excess of $20,000,000any Company Subsidiary, except pursuant to existing contracts or commitments or as otherwise permitted by this Agreement;
(d) Section 5.1.3 declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its shares of beneficial interest or capital stock stock, except for (a) dividends or Equity Interests distributions paid by a Company Subsidiary to the Operating Partnership or to any other direct or indirect wholly-owned Company Subsidiary, (except as between b) regular, quarterly cash dividends at a rate not in excess of $0.125 per Company Common Share, such declaration date to be no earlier than ten Business Days after the end of the applicable fiscal quarter, or (c) corresponding regular, quarterly cash distributions payable to holders of the Partnership Units (proportionately to all holders of Partnership Units); provided that, notwithstanding the foregoing, the Company and its Subsidiaries or between the Operating Partnership (proportionately to all holders of Partnership Units) shall be permitted to make distributions reasonably necessary for the Company Subsidiaries) to maintain its status as a REIT under the Code and avoid the imposition of corporate level Tax or excise Tax under Section 4981 of the Code;
Section 5.1.4 enter into any agreement with respect to the voting of its shares of beneficial interest or capital stock or other Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)Interests;
(e) Section 5.1.5 other than in the case of Company Subsidiaries wholly owned directly or indirectly by the Operating Partnership or redemptions of Partnership Units in accordance with the Operating Partnership Agreement, reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its shares of beneficial interest or capital stock stock, other Equity Interests or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interestssecurities;
Section 5.1.6 except as otherwise permitted by this Agreement, (fa) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) or enter into any interest option, commitment or agreement to acquire, ownership of or any Equity Interest in any business, division, organization person or any Person (or any material portion of the assets thereof)assets, other than (i) as required the acquisition of the Republic Square I property pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contractoption agreement with respect thereto, and which acquisition any other acquisitions for consideration that is individually not in excess of $10,000,0001,000,000, or in the aggregate aggregate, not in excess of $20,000,000;
3,000,000 for the Company, the Operating Partnership and the Company Subsidiaries taken as a whole or (hb) enter into any new line of business that is material option, commitment or agreement to the Company;
commence any development activity on any Company Property other than (i) directly or indirectlythe ongoing development at 1000 00xx Xxxxxx, incurX.X., assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities Xxxxxxxxxx, X.X. and (or rights to acquire debt securitiesii) or assume, guarantee or endorse, or otherwise become responsible for tenant improvements in the ordinary course of business consistent with the obligations of under Company Leases or new leases at a Company Property entered into in accordance with Section 5.1.10;
Section 5.1.7 make any Person for borrowed moneymaterial change in accounting policies or procedures, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) except as required by GAAP, by applicable Law or by a Governmental Entity;
Section 5.1. 8 incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse the obligations of any person (or any guarantee of such indebtedness) solely between the Company and other than a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which Subsidiary) for borrowed money, except for (a) indebtedness is for borrowed money incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practicebusiness, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries including borrowings under or between refinancings of the Company’s, the Operating Partnership’s wholly-owned Subsidiaries, or any Company Subsidiary’s existing credit facilities (C) without prejudice to Section 5.1(iincluding construction loans), (ib) as required indebtedness for borrowed money incurred in order to finance the acquisition of the Republic Square I property pursuant to the terms of any existing Company Material Contract to which option agreement with respect thereto or (c) indebtedness for borrowed money incurred in order for the Company to pay (and/or the Operating Partnership to pay) dividends, distributions or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,000;
(m) except to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice), (B) grant any additional rights to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated redemptions permitted by this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, in each case to do any of the foregoing in clauses (a) through (v).
Appears in 1 contract
Samples: Merger Agreement (Liberty Property Limited Partnership)
Conduct of Business by the Company Pending the Closing. (a) The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as expressly set forth in Section 5.1 6.1(a) of the Company Disclosure Schedule, as required otherwise permitted or contemplated by any other provision of this Agreement or Agreement, as required by applicable Law, unless Parent will otherwise agree Law or as consented to in writing by Parent (which agreement will such consent not to be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company will will, and will cause each Company Subsidiary to (x) conduct its operations business in the ordinary course of business consistent with past practice and (y) use its commercially reasonable efforts to (i) keep available the services of the current officers and key employees of the Company and each Company Subsidiary and to preserve substantially intact its business organization the current relationships of the Company and (ii) maintain each Company Subsidiary with each of the customers, suppliers and preserve its assets, properties and positive other Persons with whom the Company or any Company Subsidiary has material business relationships (including employees)relations. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required otherwise contemplated by any other provision of this Agreement or Agreement, as required by applicable LawLaw or as consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed), the Company will shall not, and shall not and will cause each permit any Company Subsidiary not to (unless required by applicable Law)to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, take any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):actions:
(ai) amend or otherwise change the Company Charter or Charter, the Company Bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)Subsidiary;
(bii) issue, deliver, sell, pledge, dispose oftransfer, grant, transfer encumber or encumberotherwise dispose, or authorize authorize, propose or agree to the issuance, delivery, sale, pledge, disposition, grant, transfer, encumbrance or encumbrance disposition of, any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such its capital stock or other Equity Interests, or any securities convertible into or exchangeable for, or options, warrants warrants, calls, commitments or other rights of any kind to acquire acquire, any shares of such any class or series of its capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon pursuant to the vesting, exercise or settlement or the exercise of Company Accelerated Equity Options, Company Restricted Stock or other Company Stock-Based Awards existing and outstanding as of on the date hereof on the terms in accordance with their terms, (ii) transactions between effect on the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylawsdate hereof);
(c) sell, pledge, dispose of, transfer, lease, license or encumber any material property or assets of the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(diii) declare, set aside, establish a record date for, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between other than dividends payable by a wholly-owned Company Subsidiary to the Company and its Subsidiaries or between the to any other wholly-owned Company SubsidiariesSubsidiary) or enter into any agreement with respect to the voting of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)Interests;
(eiv) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire or offer to acquire, directly or indirectly, any of its capital stock or other Equity Interests, or authorize securities convertible or propose the issuance of exchangeable into or exercisable for any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interests, except pursuant to the vesting, exercise or settlement of Company Options, Company Restricted Stock or Company Stock-Based Awards, employee severance, retention, termination, change of control and other contractual rights existing on the date hereof on the terms in effect on the date hereof;
(fv) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, including by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization Person or any Person (division thereof or any material portion of the assets thereof), other than (i) as required pursuant to the terms of or make any existing Company Material Contract to which the Company loan, advance or capital contribution to, or investment in, any Person or any Company Subsidiary is a party division thereof, except any such acquisitions, loans, advances, contributions or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become responsible for the obligations of any Person for borrowed money, in each case other than investments (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities made in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (consideration not in excess of $3,000,000 individually, or any guarantee of $15,000,000 for all such indebtedness) solely between transactions by the Company and a wholly owned Company Subsidiary or between wholly owned the Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(jvi) make any loansredeem, guaranteesrepurchase, advances prepay, defease, cancel, incur or capital contributions tootherwise acquire, or investments inmodify the terms of, any other indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person for borrowed money, except for (A) indebtedness incurred under the Company’s existing credit facilities not in excess of $5,000,000 10,000,000, (B) indebtedness for borrowed money in a principal amount not in excess of $20,000,000 for all such indebtedness by the Company and the Company Subsidiaries in the aggregateaggregate (including indebtedness incurred under the Company’s existing credit facilities pursuant to the preceding clause (A)), and (C) indebtedness owed by any wholly-owned Company Subsidiary to the Company or any other wholly-owned Company Subsidiary; provided, that any indebtedness for borrowed money incurred or otherwise acquired, modified or assumed under this Section 6.1(a)(vi) shall be subject to prepayment without penalty at any time;
(vii) grant any Lien on any of its material assets, other than Permitted Encumbrances and Liens granted in connection with any indebtedness permitted under Section 6.1(a)(vi);
(viii) (A) immaterial loans enter into, terminate or advances to employees amend or independent contractors modify any Company Material Contract or Contract that, if in effect on the date hereof, would have been a Company Material Contract, other than in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i)waive any term of or any default under, loans solely between or release, settle or compromise any material claim against the Company and its wholly-owned Subsidiaries or between material liability or obligation owing to the Company’s wholly-owned SubsidiariesCompany under, any Company Material Contract, other than in the ordinary course of business consistent with past practice, or (C) without prejudice enter into any Contract which contains a change of control or similar provision in favor of the other party or parties thereto that would require a payment or give rise to Section 5.1(i)any rights to such other party or parties in connection with the Merger and/or the other transactions contemplated in this Agreement;
(ix) sell, transfer, lease, license, assign, abandon or otherwise dispose of (iincluding, by merger, consolidation, or sale of stock or assets) as required pursuant to the terms any entity, business, assets, rights or properties of any existing Company Material Contract to which the Company or any Company Subsidiary is (but excluding all Company Intellectual Property and the rights therein) having a party current value in excess of $5,000,000 in the aggregate, other than sales of inventory and obsolete equipment in the ordinary course of business in accordance with past practice;
(x) sell, transfer, assign, abandon or otherwise dispose of, or grant any license or sublicense with respect to, any material Company Material Contract entered into after the date of this Agreement Intellectual Property (other than non-exclusive licenses or sublicenses granted by the Company or any Company Subsidiary in compliance the ordinary course of business consistent with past practice);
(xi) authorize, or make any commitment with respect to, any single capital expenditure in excess of $5,000,000 or capital expenditures for the terms Company and the Company Subsidiaries in excess of this Agreement$15,000,000 in the aggregate, except for capital expenditures that are contemplated by the Company’s existing plan for annual capital expenditures for 2012, and previously made available to Parent;
(xii) or enter into any new line of business outside of its existing business segments;
(iixiii) as required pursuant except to the terms of any extent required by applicable Law or by a Company Plan or other agreement or arrangement existing non-Company Material Contract, in effect as of on the date of this Agreement that has been disclosed or made available to Parent, (A) grant or announce any stock option, equity or incentive awards or any increase in the salaries, bonuses or other compensation and which loanbenefits payable by the Company or any Company Subsidiary to any of the employees, guaranteeofficers, advance directors, shareholders or capital contribution other service providers of the Company or any Company Subsidiary, (B) hire new employees, unless such hiring is individually in the ordinary course of business consistent with past practice and is with respect to employees having an annual base salary and incentive compensation opportunity not to exceed $200,000 in the aggregate for any such employee, (C) pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit not required by any existing Company Plan or other agreement or arrangement in effect on the date of this Agreement to any employee, officer, director or other service provider of the Company or any of its Subsidiaries, whether past or present, or take any action to accelerate vesting of any right to compensation or benefits, (D) enter into or amend any Contracts of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base salary and incentive compensation opportunity not to exceed $100,000 in the aggregate for any such employee, or (E) except as required to ensure that any Company Plan is not then out of compliance with applicable Law, enter into or adopt any new, or materially increase benefits under or renew, amend or terminate any existing Company Plan or collective bargaining agreement;
(xiv) pay, discharge, settle or satisfy any material claims or obligations (absolute, accrued, contingent or otherwise) in an amount in excess of $10,000,0002,500,000 in the aggregate, other than (A) performance of contractual obligations in accordance with their terms, (B) payment, discharge, settlement or satisfaction in the ordinary course of business consistent with past practice, or (C) payment, discharge, settlement or satisfaction in accordance with their terms, of claims, liabilities or obligations that have been (1) disclosed in the aggregate not most recent financial statements of the Company included in excess the Company SEC Filings filed prior to the date hereof to the extent of $20,000,000 and such disclosure or (D2) extended payment terms for customers incurred since the date of such financial statements in the ordinary course of business consistent with past practice;
(kxv) terminateexcept as may be required by GAAP or as a result of a change in Law, cancelmake any material change in accounting principles, modify policies, practices, procedures or amend methods;
(xvi) change any Company Material Contractmaterial method of Tax accounting, make or cancelchange any material Tax election, modifyfile any material amended Tax Return, amendsettle or compromise any material Tax liability, claim or assessment, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of any material amount of Taxes, enter into any closing agreement with respect to any Tax or surrender any right to claim a Tax refund;
(xvii) settle, release, assign waive or waive compromise any rights pending or claims under threatened Action of or against the Company or any of the Company Material ContractSubsidiaries (A) for an amount in excess of $2,500,000 in the aggregate, or enter into (B) entailing the incurrence of (1) any obligation or amend liability of the Company in excess of such amount, including costs or revenue reductions, or (2) obligations that would impose any Contract that, if existing on the date hereof, restrictions that would be material to the business or operations of the Company or any of the Company Subsidiaries, taken as a whole;
(xviii) fail to maintain in full force and effect material insurance policies covering the Company Material Contractand the Company Subsidiaries and their respective properties, assets and businesses in each case other than in the ordinary course of business a form and amount consistent with past practice;
(lxix) make adopt or authorize any capital expenditure in excess enter into a plan of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedulecomplete or partial liquidation, other than capital expenditures that are notdissolution, in the aggregatemerger, in excess of $5,000,000;
(m) except to the extent required by (i) applicable Lawconsolidation, (ii) the existing terms of any Company Benefit Planrestructuring, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any director, officer, employee recapitalization or other service provider reorganization of the Company or any Company Subsidiary (except, other than the Merger or any merger or consolidation among wholly-owned Company Subsidiaries);
(xx) adopt or implement a shareholder rights plan;
(xxi) amend or modify in any material respect the case engagement letter of individuals who are not officers the Company Financial Advisor;
(xxii) implement a plant closing or directors, mass layoff of employees that implicates the WARN Act or similar foreign Laws (disregarding for increases in connection such purpose any aggregation of any employment terminations effectuated by the Company or any Company Subsidiary before the Effective Time with promotions or periodic reviews in the ordinary course of business consistent with past practice), (B) grant any additional rights to severance or termination pay toemployment terminations that Parent may effectuate, or enter into cause to be effectuated, after the Effective Time); provided that this Section 6.1(a)(xxii) shall not restrict the Company or any severance agreement withCompany Subsidiary from terminating any employee for cause at any time; or
(xxiii) agree or commit to take any of the foregoing actions.
(b) Nothing contained in this Agreement is intended to give Parent, any directordirectly or indirectly, officer employee the right to control or other service provider direct the operations of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable prior to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material Effective Time. Prior to the Company Effective Time, each of Parent and the Company Subsidiariesshall exercise, taken as a whole, consistent with the terms and (z) for awards in cash in lieu conditions of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees complete control and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies supervision over its and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their its Subsidiaries’ respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, in each case to do any of the foregoing in clauses (a) through (v)operations.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and or the termination of this Agreement in accordance with Article 7Agreement, except as set forth in Section 5.1 6.1 of the Company Disclosure ScheduleSchedule or as specifically required or permitted by this Agreement or required by Law, unless Acquiror shall otherwise consent thereto in writing, the Company shall, and shall cause each of its Subsidiaries to: conduct its operations only in the ordinary and usual course of business consistent with past practice and, to the extent consistent therewith, use its reasonable best efforts to preserve intact its business organizations and maintain its rights, franchises and existing goodwill and relations with customers, suppliers, creditors, lessors, lessees, employees and business associates. In addition, the Company shall not, and shall not permit its Subsidiaries to, take any action that the Company knows, at the time it prepares to take or takes such action, would (i) materially adversely affect or delay the ability of the Company or Acquiror to perform any of their respective material obligations in a timely basis under this Agreement or (ii) have a Material Adverse Effect with respect to the Company. By way of amplification and not limitation, except as set forth in Section 6.1 of the Company Disclosure Schedule or as specifically required or permitted by any other provision of this Agreement or as required by applicable Law, unless Parent will otherwise agree in writing (which agreement will not be unreasonably withheld, delayed or conditioned), the Company will and will cause each Company Subsidiary to conduct its operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve substantially intact its business organization and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees). Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required by any other provision of this Agreement or as required by applicable Law, the Company will not and will cause each Company Subsidiary not to (unless required by applicable Law), between the date of this Agreement and the earlier of the Effective TimeTime or the termination of this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):Acquiror:
(a) amend the Company Charter or Company Bylaws otherwise change its certificate of incorporation or bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)documents;
(b) issue, deliver, sell, pledge, dispose of, grant, transfer or transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, of any shares of capital stock or Rights of, or other Equity Interests in, the Company or any Company Subsidiary of its Subsidiaries of any class, or securities convertible into, or exchangeable or exercisable for, for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract contract right), of the Company or any Company Subsidiaryof its Subsidiaries, other than (ix) the issuance of Shares Company Common Stock pursuant to the Company’s DRIP and/or 401(K) Plan, (y) the issuance of Company Common Stock upon the vesting, settlement exercise or the exercise conversion of Company Accelerated Equity Awards Options outstanding as of the date hereof in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries terms or (iiiz) the issuance granting of options to purchase up to 25,000 shares of Company Common Stock upon in the conversion aggregate in the ordinary course of shares of Company Preferred Stock in accordance business consistent with the Company Charter and Company Bylawspast practice;
(c) sell, pledge, dispose of, transfer, lease, license license, guarantee or encumber any material property encumber, or assets of authorize the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license license, guarantee or encumbrance is individually not in excess of, any material property or assets (including Intellectual Property) of $10,000,000the Company or deposits of the Company Bank, except pursuant to existing Contracts or commitments or the sale or purchase of goods or the pledge of securities in the aggregate not in excess ordinary course of $20,000,000business consistent with past practice;
(d) other than regular quarterly dividends on Company Shares of $0.15 per Company Share, declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries) or enter into any agreement with respect to its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)stock;
(e) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock stock, other Equity Interests or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interests;
(f) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stock) any interest in any business, division, organization or any Person (or any material portion of the assets thereof)securities, other than (i) as required the repurchase of Company Shares following termination of employment with, or provision of services to, the Company or any Subsidiary, pursuant to the terms of any Company Option or agreement existing Company Material Contract on the date of this Agreement pursuant to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms shares of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to restricted stock were issued by the Company;
(if) enter into any agreement or otherwise agree to acquire, directly or indirectlyindirectly (whether by merger or consolidation, incuracquisition of stock or assets or by formation of a joint venture or otherwise), assume any business or guarantee any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or any interest therein;
(g) incur any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) trust preferred securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for for, the obligations of any Person person (other than a wholly owned Subsidiary of the Company) for borrowed money, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company deposits, federal funds borrowings and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan borrowings from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside Federal Home Loan Bank of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers San Francisco in the ordinary course of business consistent with past practice;
(h) make any loan, loan commitment or renewal or extension thereof to any person which would, when aggregated with all outstanding loans, commitments for loans or renewals or extensions thereof made to such person and any affiliate or immediate family member of such person, exceed $3,000,000 without submitting complete loan package information customarily submitted to the board of directors of the Company or applicable Subsidiary or the loan committee of the Company or applicable Subsidiary in connection with obtaining approval of such action to the chief credit officer of Acquiror for review with a right of comment at least one (1) full Business Day prior to taking such action; provided, that, if Acquiror objects in writing to such loan or loan commitment or renewal or extension thereof prior to the end of such Business Day, the Company or applicable Subsidiary shall obtain the approval of a majority of the members of the board of directors of the Company or applicable Subsidiary or the loan committee, as the case may be, prior to making such loan or loan commitment or renewal or extension thereof (for the sake of clarity, the issuance of or the commitment to issue a letter of credit by the Company or applicable Subsidiary on behalf of or for the benefit of a third party shall constitute a loan or loan commitment under this clause);
(i) other than in securities transactions as provided in (ii) below and purchases of DPC assets, make any investment either by contributions to capital, property transfers or purchase of any property or assets of any person and (ii) other than purchases of (w) direct obligations of, or obligations secured by the full faith and credit of, the United States of America with a remaining maturity at the time of purchase of one year or less, (x) securities issued by U.S. Government Agencies, (y) federal funds, or (z) certificates of deposits of any commercial bank, purchase or acquire securities of any type; provided, however, that in the case of investment securities, the Company or applicable Subsidiary may purchase investment securities if, within one (1) Business Day after the Company requests in writing (which request shall describe in reasonable detail the investment securities to be purchased and the prices thereof) that Acquiror consent to the making of any such purchase, Acquiror has approved such request in writing or has not responded in writing to such request;
(j) except as required by applicable law or regulation or the FRB, FDIC or DFI, (i) implement or adopt any material change in its interest rate and other risk management policies, procedures or practices, (ii) fail to follow in any material respect its existing policies or practices with respect to managing its exposure to interest rate and other risk or (iii) fail to use commercially reasonable means to avoid any material increase in its aggregate exposure to interest rate risk;
(k) take any action or omit to take any action that may result, individually or in the aggregate with any other actions or omissions, in a material violation of the Bank Secrecy Act, the anti-money laundering laws and regulations or the policies and procedures of the Company or any of its Subsidiaries with respect to the foregoing;
(l) terminate, cancel, modify cancel or amend request any Company Material Contractchange in, or cancel, modify, amend, release, assign or waive agree to any rights or claims under any Company Material Contractchange in, or enter into any contract or amend any Contract thatagreement that calls for aggregate annual payments of $25,000 or more and which is not terminable at will or with 30 days or less notice without payment of a premium or penalty, if existing on the date hereof, would be a Company Material Contract, in each case other than loans and loan participations in the ordinary course of business and consistent with past practice;
(l) make or authorize any capital expenditure practice and in excess of the Company’s capital expenditure budget set forth on accordance with Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,0006.1(h);
(m) except to the extent required by (i) applicable Lawenter into, (ii) the existing terms renew or allow to renew automatically, make any new grants of awards under, amend or otherwise modify any Company Benefit Planemployment, Foreign Benefit Plan or Company CBAconsulting, (iii) this Agreement or (iv) contractual commitments with respect to transition, termination, severance or termination pay in existence on the date of this Agreement: (A) similar agreements or arrangements or increase the compensation or benefits payable or to become payable to any directorits directors, officer, employee officers or employees other service provider of the Company or any Company Subsidiary (except, than increases in the case of individuals compensation for employees who are not officers or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business and consistent with past practice), provided that no such increase or increases shall result in an annual adjustment of more than 3% in the aggregate cash compensation that is payable to all employees as a group; (Bii) grant or increase any additional rights to severance or termination pay to, or enter into any employment or severance agreement with, any director, officer employee or other service provider employee of the Company or any Company Subsidiary (exceptof its Subsidiaries, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, termination employment, termination, severance or severance other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officerofficer or employee, except to the extent required by applicable Law or this Agreement; or (iii) take any affirmative action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan, other than as expressly permitted by this Agreement; and provided, further, however, that nothing in this Section 6.1 shall prohibit the Company or Company Bank from (y) awarding and paying bonus compensation in accordance with the terms and conditions of its 2005 management performance plan as in existence on the date hereof and accrued in accordance with GAAP, and (z) adopting and subsequently implementing annual or quarterly incentive compensation programs for fiscal 2006 for their officers and employees consistent with their past practice, so long as the Company provides Acquiror at least three (3) business days prior written notice of the intended adoption of, and consults with Acquiror concerning, such program or programs for fiscal 2006.
(n) hire any person as an employee or other service provider of the Company or any of its Subsidiaries or promote any employee, except (i) to satisfy contractual obligations existing as of the date hereof and set forth in Schedule 3.11 of the Company Subsidiary (exceptDisclosure Schedule, (xii) in persons hired to fill any vacancies arising after the date hereof and whose employment is terminable at the will of the Company or applicable Subsidiary upon and after the consummation of the Holding Company Merger or Bank Merger, as the case may be, and (iii) any person hired to fill a newly created position with the Company or the Company Bank if such person’s base salary and any guaranteed bonus, in each case considered on an annual basis, will not exceed $75,000 during his or her first year of group health employment;
(o) accelerate the payment of any material liabilities or medical coverage subject to annual review obligations (absolute, accrued, contingent or otherwise), except in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health ;
(p) materially change any actuarial or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable other assumptions used to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material calculate funding obligations with respect to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as contemplated may be required by this Agreement)GAAP, ERISA or the express terms of any such plan;
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(oq) forgive any loans to Service Providers directors, officers or employees of the Company or any of their respective affiliatesits Subsidiaries;
(pr) make any material change in accounting policiespolicies or procedures, practices, principles, methods or procedures or payment or collection of accounts, other than except as required by GAAP or by applicable Lawa Governmental Entity;
(qs) waive, release, assign, commencesettle or compromise any material claims, compromiseor any material litigation or arbitration for an amount in excess of $50,000, individually, or $100,000 in the aggregate or which would impose any material restriction on the business of the Company or Acquiror or any of their Subsidiaries or would reasonably be expected to create precedent for claims that are reasonably likely to be material to the Company or Acquiror or any of their Subsidiaries;
(t) make any material tax election, settle or agree to settle compromise any Proceeding (including material liability for Taxes, amend any Proceeding relating to this Agreement Tax Return or the transactions contemplated hereby) file any refund for Taxes, other than compromises, settlements or agreements in the ordinary course of business or as may be required by a Governmental Entity;
(u) make any capital expenditures other than capital expenditures in the ordinary and usual course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) in amounts not in excess of exceeding $5,000,000 25,000 individually or $10,000,000 500,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract agreement or otherwise make any commitment, in each case commitment to do any of the foregoing in clauses (a) through (v)foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as set forth in Section 5.1 6.01 of the Company Disclosure Schedule, Schedule or as required expressly contemplated by any other provision of this Agreement or as required by applicable Lawthe Management Agreement, unless Parent will shall otherwise agree in writing writing, (which agreement will not be unreasonably withheld, delayed or conditioned), x) the respective businesses of the Company will and will cause each the Company Subsidiary to conduct its operations in Subsidiaries shall be conducted only in, and the Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practice and (y) the Company shall use commercially all reasonable efforts to (i) keep available the services of such of the current officers, significant employees and consultants of the Company and the Company Subsidiaries and to preserve the current relationships of the Company and the Company Subsidiaries with such of the corporate partners, customers, suppliers and other persons with which the Company or any Company Subsidiary has significant business relations in order to preserve substantially intact its business organization organization. By way of amplification and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees). Without limiting the foregoing, and as an extension thereofnot limitation, except as set forth in Section 5.1 6.01 of the Company Disclosure Schedule, Schedule or as required expressly contemplated by any other provision of this Agreement or as required by applicable LawAgreement, neither the Company will not and will cause each nor any Company Subsidiary not to (unless required by applicable Law)shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (Parent, which consent will shall not be unreasonably withheld, delayed withheld or conditioned):delayed:
(a) amend the Company Charter or Company Bylaws otherwise change its certificate of incorporation or bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)documents;
(b) issue, deliver, sell, pledge, dispose of, grant, transfer transfer, lease, license, guarantee or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license or encumbrance of, (i) any shares of capital stock of, or other Equity Interests in, of the Company or any Company Subsidiary of any class, or securities convertible into, into or exchangeable or exercisable for, for any shares of such capital stock or other Equity Interestsstock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securitiesstock, or any other ownership interest (including, without limitation, any such interest represented by Contract rightphantom interest), of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards outstanding as of the date hereof in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylaws;
(c) sell, pledge, dispose of, transfer, lease, license or encumber any material property or assets of the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(d) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries) or enter into any agreement with respect to its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries);
(e) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interests;
(f) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stock) any interest in any business, division, organization or any Person (or any material portion of the assets thereof), other than (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become responsible for the obligations of any Person for borrowed money, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,000;
(m) except to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice), (B) grant any additional rights to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, in each case to do any of the foregoing in clauses (a) through (v).
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this the Initial Merger Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7and the Effective Time (the "Interim Period"), except as set forth in Section 5.1 of the Company Disclosure Schedule, Letter or as specifically permitted or required by any other provision of this Agreement or as required by applicable LawAgreement, unless Parent will shall otherwise agree in writing (which agreement will not be unreasonably withheld, delayed or conditioned)writing, the Company will will, and will cause each Company Subsidiary to of its Subsidiaries to, conduct its operations only in the ordinary and usual course of business consistent with past practice and use commercially reasonable efforts to (i) keep available the services of the current officers and Key Employees of the Company and each of its Subsidiaries and to preserve the current relationships of the Company and each of its Subsidiaries with such of the customers, suppliers and other Persons with which the Company or any of its Subsidiaries has significant business relations as is reasonably necessary to preserve substantially intact its business organization and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees)organization. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, Letter or as specifically permitted or required by any other provision of this Agreement or as required by applicable LawAgreement, the Company will shall not and will cause each Company Subsidiary not to (unless required by applicable Law), between and shall not permit any Subsidiary of the date of this Agreement and Company to, during the Effective TimeInterim Period, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):Parent:
(a) amend the Company Charter or Company Bylaws otherwise change its certificate of incorporation or by-laws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)documents;
(b) (i) issue, deliver, sell, pledge, dispose of, grant, transfer or transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, of any shares of capital stock of, or other Equity Interests Capital Securities in, the Company or any Company Subsidiary of its Subsidiaries (whether by merger, consolidation or otherwise) of any class, or securities convertible into, or exchangeable or exercisable for, for any shares of such capital stock or other Equity InterestsCapital Securities, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests Capital Securities or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract contract right), of the Company or any Company Subsidiaryof its Subsidiaries, other than (i) the issuance shares of Shares Company Common Stock issuable upon the vestingconversion of Company Preferred Stock, settlement or the exercise of Company Accelerated Equity Awards Options, or warrants to purchase shares of Company Capital Stock, in each case outstanding as of the date hereof of the Initial Merger Agreement and in accordance with their respective terms, (ii) transactions between accelerate, amend or change the period of exercisability of options or other equity incentive awards granted under any Company and a wholly-owned Stock Option Plan or authorize cash payments in exchange for any options or other equity incentive award granted under any Company Subsidiary or between wholly-owned Company Subsidiaries Stock Option Plan; or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylaws;
(c) sell, pledge, dispose of, transfer, lease, license license, guarantee or encumber any material property encumber, or assets of authorize the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license license, guarantee or encumbrance is individually not of, any property or assets (including Intellectual Property) of the Company or any of its Subsidiaries, including through merger, consolidation or otherwise, with a value in excess of $10,000,00075,000, except pursuant to existing contracts or commitments or the sale or purchase of goods or services in the aggregate not in excess ordinary course of $20,000,000;business consistent with past practice.
(dc) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between other than dividends paid by a wholly owned Subsidiary of the Company and its Subsidiaries or between to the Company Subsidiariesor to any other wholly owned Subsidiary of the Company or issuance of additional warrants to purchase shares of Company Common Stock contemplated by agreements existing as of the date of the Initial Merger Agreement) or enter into any agreement with respect to the voting of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)stock;
(ed) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock stock, other Capital Securities or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interestssecurities;
(fe) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(gi) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization person or any Person (division thereof or any material portion of the assets thereof), other than (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or assets; (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee incur any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise as an accommodation become responsible for for, the obligations of any Person (other than a wholly owned Subsidiary of the Company) for borrowed money, in each case other than (A) any except to the extent that the aggregate indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries at any time outstanding does not exceed $10,000,000; (iii) refinance or between otherwise replace any of the Company’s wholly-owned SubsidiariesExisting Company Indebtedness, except with the consent of Parent, which consent shall not be unreasonably witheld, (Civ) without prejudice terminate, cancel or request any material change in, or agree to Section 5.1(i)any material change in, (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
; (lv) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule2005 Budget, other than capital expenditures that are not, in the aggregate, not individually in excess of $5,000,00015,000, or in the aggregate in excess of $50,000 per month, for the Company and its Subsidiaries taken as a whole; or (vi) with respect to clauses (i) and (ii) above, enter into or amend any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1.5;
(mf) except to as disclosed in Section 3.17 or Section 5.1 of the extent required by Company Disclosure Letter: (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or its directors, for increases officers, employees or consultants except in connection with promotions or periodic reviews in the ordinary course of business annual adjustments consistent with past practice), practices; (Bii) grant any additional rights to severance or termination pay to, or enter into any agreement to provide severance agreement benefits with, any director, officer or other employee or other service provider consultant of the Company or any Company Subsidiary (exceptof its Subsidiaries, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, termination employment, termination, severance or severance other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider consultant, except as required by applicable Law; or (iii) take any affirmative action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Employee Plans.
(g) (i) pre-pay any long-term debt in an amount not to exceed $10,000 in the aggregate for the Company and its Subsidiaries taken as a whole, or pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, contingent or otherwise), except for borrowings under revolving credit lines existing as of the Company or any Company Subsidiary (except, (x) date of the Initial Merger Agreement in the case ordinary course of group health business consistent with past practice and in accordance with their terms; (ii) fail to collect notes or medical coverage subject accounts receivable in the ordinary course of business consistent with past practice or enter into a factoring or discounting arrangement with a third party with respect to annual review accounts receivable; (iii) fail to pay any account payable in the ordinary course of business consistent with past practice, actions that would not increase or (iv) vary the cost of such group health or medical coverage plan by more than 5% or result Company's inventory practices in an employer/employee cost sharing arrangement that is more favorable to any material respect from the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement)Company's past practices;
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(ph) make any change in accounting policies, practices, principles, methods policies or procedures or payment or collection of accountsprocedures, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance except as required by GAAP or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agentsby a Governmental Authority;
(r) (i) make or change any material Tax electionwaive, (ii) adopt or change any material Tax accounting methodrelease, (iii) file any material amendment to a Tax Returnassign, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim material claims, or assessment in respect of any material Taxeslitigation or arbitration;
(j) file any amended Tax Return, (vi) consent to make any extension Tax election or waiver of the statutory period of limitations applicable to enter into any claim or assessment agreement in respect of Taxes, including the settlement of any Tax controversy, claim or assessment, adopt or change of any accounting method in respect of Taxes, surrender any right to claim a refund of Taxes if such action would have the effect of increasing by a material amount the Tax liability of the Company or any of its Subsidiaries, or would give rise to a Tax lien (viiother than statutory Liens for current Taxes not yet due) enter into on any material Tax sharing of the Company's or similar agreementits Subsidiaries' assets;
(sk) terminate or modify in any material respect any Insurance Policytake, or fail agree to maintain take, any Insurance Policy with at least substantially action that would prevent the same coverage and on terms and conditions not less advantageous to Merger from qualifying as a reorganization within the insured than such existing Insurance Policymeaning of Section 368(a) of the Code;
(tl) adopt or implement any stockholder rights plan;
(m) modify, amend or terminate, or waive, release or assign any material rights or claims with respect to any confidentiality or standstill agreement to which the Company is a party;
(n) write up, write down or write off the book value of any tangible assets, individually or in the aggregate, in excess of $5,000,000for the Company and its Subsidiaries taken as a whole, except for depreciation and amortization in accordance with GAAP consistently appliedapplied and any write-offs of inventory or accounts receivable that do not exceed $25,000 individually or $50,000 in the aggregate.
(o) take any action to exempt the Company from (i) the provisions of Section 203 of the DGCL, or (ii) any other state takeover law or state law that purports to limit or restrict business combinations or the ability to acquire or vote shares any person or entity (other than Parent, Merger Sub or any of Parent's Subsidiaries) or any action taken thereby, which person, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(p) open or close, or enter into an agreement to open or close, any facility or office except as disclosed in Section 5.1 of the Company Disclosure Letter;
(q) take any action that is intended or would reasonably be expected to result in any of the conditions to the Merger set forth in Article 6 not being satisfied;
(r) fail to be in material compliance with the terms of instruments evidencing indebtedness incurred by the Company other than any such failure that is waived by the party to whom such indebtedness is owed within a reasonable time after the commencement of such material non-compliance and provided Parent with a copy of such waiver;
(s) allow any insurance policy relating to the Company's business to lapse without obtaining replacement insurance coverage of comparable amount at similar cost;
(t) enter into any contract that contains any non-compete or exclusivity provisions with respect to any customer, line of business or geographic area with respect to the Company, any of its Subsidiaries or any of the Company's current or future affiliates, or which restricts the conduct with respect to any customer, of any line of business by the Company, any of its Subsidiaries or any of the Company's current or future affiliates or any geographic area in which the Company, any of its Subsidiaries or any of the Company's current or future affiliates may conduct business, or which otherwise restricts operation of the Company's business, in each case in any material respect, in each case other than non-compete agreements signed by employees incident to their employment by the Company or any of its Subsidiaries;
(u) take any formal action or grant any consent or approval concerning any joint venture outside the ordinary course of business consistent with past practice; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract agreement or otherwise make any commitment, in each case commitment to do any of the foregoing in clauses (a) through (v)foregoing.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Digital Generation Systems Inc)
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required specifically permitted by any other provision of this Agreement or as required by applicable LawLaw or the regulations or requirements of NASDAQ, unless Parent will shall otherwise agree consent in writing (which agreement will consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company will and will cause each Company Subsidiary to (A) conduct its operations in the ordinary and usual course of business substantially consistent with past practice and (B) use its commercially reasonable efforts to (i) preserve substantially intact its business organization and (ii) maintain goodwill, including maintaining channel and preserve warehouse inventory at levels consistent with past practices and consistent with the Company’s business plans. Between the date of this Agreement and the Effective Time, the Company will periodically provide Parent updates regarding any material developments regarding the Company or its assets, properties and positive material business relationships (including employees)operations. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required specifically permitted by any other provision of this Agreement or as required by applicable LawLaw or the regulations or requirements of NASDAQ, the Company will not and will cause each Company Subsidiary not to (unless required by applicable Law)shall not, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will shall not be unreasonably withheld, delayed conditioned or conditioneddelayed):
(a) Section 5.1.1 amend the Company Charter or Company Bylaws otherwise change its certificate of incorporation or bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)documents;
Section 5.1.2 (bA) issue, deliver, sell, pledge, dispose of, grant, transfer or encumber, issue or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, issuance of any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), securities of the Company or any Company SubsidiaryCompany, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards outstanding as of the date hereof in accordance with their terms, (iiw) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares exercise of Company Preferred Options or vesting of Company Restricted Stock Units outstanding on the date hereof or granted in accordance with the ordinary course of business, (x) Company Common Stock upon the exercise of Company Warrants outstanding on the date hereof, (y) Company Restricted Stock Units pursuant to the Company’s director compensation policy as in effect as of the date hereof, or Company Common Stock upon the exercise of such Company Restricted Stock Units, or (z) Company Restricted Stock Units pursuant to employment agreements entered into by the Company Charter and as in effect as of the date hereof, or Company Bylaws;
Common Stock upon the exercise of such Company Restricted Stock Units, or (cB) sell, pledge, dispose of, transfer, lease, license license, guarantee or encumber any material property encumber, or assets of authorize the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license license, guarantee or encumbrance is individually not in excess of, any material property or assets of $10,000,000the Company, except pursuant to existing contracts or written commitments or the sale or purchase of goods or other property or assets in the aggregate not in excess ordinary course of $20,000,000business;
(d) Section 5.1.3 declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries) or enter into any agreement with respect to the voting of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)stock;
(e) Section 5.1.4 other than exercise of Company Options or warrants to purchase Company Common Stock or net settlement of Company Restricted Stock Units, reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock stock, other Equity Interests or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interestssecurities;
(f) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, Section 5.1.5 acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization person or any Person (or assets of any material portion of the assets thereof)other person, other than (i) as required pursuant to the terms acquisitions of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or assets in the aggregate not in excess ordinary course of $20,000,000business;
(h) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee Section 5.1.6 incur any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise as an accommodation become responsible for for, the obligations of any Person person for borrowed money, in each case other than (A) any except for indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any other indebtedness for borrowed money (or any guarantee with a maturity of such indebtedness) solely between the Company and not more than one year in a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are principal amount not, in the aggregate, in excess of $5,000,000200,000;
(m) Section 5.1.7 except to the extent as may be required by (i) applicable Law, (ii) the existing terms of Law or any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay corporate policies in existence on the date of this AgreementAgreement as set forth in the Company Disclosure Schedule: (A) increase the compensation or benefits payable or to become payable to any directorits directors, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, for increases in connection with promotions employees; or periodic reviews in the ordinary course of business consistent with past practice), (B) grant any additional rights to severance or termination pay to, or enter into any employment or severance agreement with, any director, officer employee or other service provider employee of the Company or any Company Subsidiary (exceptCompany, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, termination employment, termination, severance or severance other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officerofficer or employee, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable except to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as extent required by GAAP or by applicable Law;
(q) waiveSection 5.1. 8 terminate, releasecancel or request any material change in, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Companymaterial change in, any Company Subsidiary or any of their respective directors, officers, employees or agentsMaterial Contract;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, in each case to do any of the foregoing in clauses (a) through (v).
Appears in 1 contract
Samples: Merger Agreement (Pernix Therapeutics Holdings, Inc.)
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between Between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Closing or, except as set forth in Section 5.1 on Schedule 7.1 of the Company Disclosure ScheduleSchedules, as required specifically contemplated by any other provision of this Agreement or as required by applicable LawLegal Requirements, unless Parent will Buyer shall otherwise agree consent in writing (which agreement will consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), Sellers shall and shall, and shall cause the Company will and will cause each the Subsidiaries to (A) conduct the operations of the Company Subsidiary to conduct its operations and the Subsidiaries in the ordinary course Ordinary Course of business consistent with past practice and Business (including using commercially reasonable efforts to keep available the services of the Employees), (B) use commercially reasonable efforts to (i) preserve substantially intact its the Company’s and the Subsidiaries’ business organization and the goodwill of those having business relationships with them, including material suppliers, distributors, licensors, licensees and others to whom the Company or a Subsidiary has contractual obligations or material business dealings, so that all such relationships and goodwill will be preserved after the date of this Agreement, (iiC) use commercially reasonable efforts to protect, prosecute, maintain and preserve its assets, properties and positive material business relationships enforce against infringement the Company Intellectual Property (including employeesnot waiving any rights, and taking affirmative actions to preserve any claims, relating to the Company Intellectual Property), and (D) use commercially reasonable efforts to comply with applicable Legal Requirements and the requirements of all Material Contracts. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 on Schedule 7.1 of the Company Disclosure ScheduleSchedules, as required specifically contemplated by any other provision of this Agreement or as required by applicable LawLegal Requirements, the Company will not and will cause each Company Subsidiary not to (unless required by applicable Law)shall not, between the date of this Agreement and the Effective TimeClosing, directly or indirectly, do, or agree to do, do any of the following without the prior written consent of Parent Buyer (which consent will shall not be unreasonably withheld, delayed conditioned or conditioneddelayed):
(a) amend Amend or otherwise change the Company Charter or Company Bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)Organizational Documents;
(b) issue, deliver, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards outstanding as of the date hereof in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylaws;
(c) sell, pledge, dispose of, transfer, lease, license license, guarantee or encumber any material property encumber, or assets of authorize the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license license, guarantee or encumbrance is individually not in excess of, any material property or assets of $10,000,000the Company or a Subsidiary, except pursuant to existing Contracts or written commitments or the sale or purchase of goods or other property or assets in the aggregate not Ordinary Course of Business;
(c) cancel any debts or waive any claims or rights, except in excess the Ordinary Course of $20,000,000Business;
(d) declare, set aside, make any capital expenditure or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries) or enter into any agreement with respect to its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries);
(e) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interests;
(f) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stock) any interest in any business, division, organization or any Person (or any material portion of the assets thereof)commitment, other than (i) as required pursuant to in the terms Ordinary Course of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or Business; (ii) as required pursuant to existing commitments or business plans disclosed in writing to Buyer prior to the terms date hereof; or (iii) which is not material to the results of any existing non-Company Material Contractoperations, and which acquisition is individually not in excess of $10,000,000financial condition, or in the aggregate not in excess business of $20,000,000the Company and the Subsidiaries taken as a whole;
(he) enter into incur any new line of business that is material to Indebtedness (other than the Company;
(iPermitted Indebtedness) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise as an accommodation become responsible for for, the obligations of any Person person for borrowed money, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(jf) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) except as may be required pursuant to the terms of any existing Company Material Contract to which the Company by applicable Legal Requirements or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are not, in the aggregate, in excess of $5,000,000;
(m) except to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Employee Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay corporate policies in existence on the date of this Agreement: , (Ai) materially increase the compensation or benefits payable or to become payable to any directorEmployee, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice), (Bii) grant any additional rights to severance or termination pay to, or enter into any employment or severance agreement with, any directorEmployee, officer employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into into, or amend any collective bargainingEmployee Plan, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) except in the case Ordinary Course of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement)Business;
(ng) hire terminate, cancel, or appoint request any Company executive officer (as defined by Rule 3b-7 promulgated under material change in, or agree to any material change in, any of the Exchange Act) or directorMaterial Contracts;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(ph) make any material change in (i) accounting policies, practicespolicies or procedures or (ii) Tax elections or Tax accounting methods, principles, methods or procedures or payment or collection of accountspractices, in each case, other than in the Ordinary Course of Business or except as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently appliedEntity; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(wi) authorize or enter into any Contract agreement or otherwise make any commitment, in each case commitment to do any of the foregoing in clauses (a) through (v)foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required specifically permitted by any other provision of this Agreement or as required by applicable LawLaw or the regulations or requirements of NASDAQ, unless Parent will shall otherwise agree consent in writing (which agreement will consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company will and will cause each Company Subsidiary to (A) conduct its operations in the ordinary and usual course of business substantially consistent with past practice and (B) use its commercially reasonable efforts to (i) preserve substantially intact its business organization and (ii) maintain goodwill, including maintaining channel and preserve warehouse inventory at levels consistent with past practices and consistent with the Company’s business plans. Between the date of this Agreement and the Effective Time, the Company will periodically provide Parent updates regarding any material developments regarding the Company or its assets, properties and positive material business relationships (including employees)operations. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required specifically permitted by any other provision of this Agreement or as required by applicable LawLaw or the regulations or requirements of NASDAQ, the Company will not and will cause each Company Subsidiary not to (unless required by applicable Law)shall not, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will shall not be unreasonably withheld, delayed conditioned or conditioneddelayed):
(a) Section 5.1.1 amend the Company Charter or Company Bylaws otherwise change its certificate of incorporation or bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)documents;
Section 5.1.2 (bA) issue, deliver, sell, pledge, dispose of, grant, transfer or encumber, issue or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, issuance of any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), securities of the Company or any Company SubsidiaryCompany, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards outstanding as of the date hereof in accordance with their terms, (iiw) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares exercise of Company Preferred Options or vesting of Company Restricted Stock Units outstanding on the date hereof or granted in accordance with the ordinary course of business, (x) Company Common Stock upon the exercise of Company Warrants outstanding on the date hereof, (y) Company Restricted Stock Units pursuant to the Company’s director compensation policy as in effect as of the date hereof, or Company Common Stock upon the exercise of such Company Restricted Stock Units, or (z) Company Restricted Stock Units pursuant to employment agreements entered into by the Company Charter and as in effect as of the date hereof, or Company Bylaws;
Common Stock upon the exercise of such Company Restricted Stock Units, or (cB) sell, pledge, dispose of, transfer, lease, license license, guarantee or encumber any material property encumber, or assets of authorize the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license license, guarantee or encumbrance is individually not in excess of, any material property or assets of $10,000,000the Company, except pursuant to existing contracts or written commitments or the sale or purchase of goods or other property or assets in the aggregate not in excess ordinary course of $20,000,000business;
(d) Section 5.1.3 declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries) or enter into any agreement with respect to the voting of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)stock;
(e) Section 5.1.4 other than exercise of Company Options or warrants to purchase Company Common Stock or net settlement of Company Restricted Stock Units, reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock stock, other Equity Interests or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interestssecurities;
(f) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, Section 5.1. 5 acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization person or any Person (or assets of any material portion of the assets thereof)other person, other than (i) as required pursuant to the terms acquisitions of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or assets in the aggregate not in excess ordinary course of $20,000,000business;
(h) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee Section 5.1. 6 incur any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise as an accommodation become responsible for for, the obligations of any Person person for borrowed money, in each case other than (A) any except for indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any other indebtedness for borrowed money (or any guarantee with a maturity of such indebtedness) solely between the Company and not more than one year in a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(l) of the Company Disclosure Schedule, other than capital expenditures that are principal amount not, in the aggregate, in excess of $5,000,000200,000;
(m) except to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice), (B) grant any additional rights to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, in each case to do any of the foregoing in clauses (a) through (v).
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required expressly permitted or contemplated by any other provision of this Agreement or as required by applicable LawLaw or the regulations or requirements of the NYSE, unless Parent will shall otherwise agree in writing (which agreement will shall not be unreasonably withheld, delayed withheld or conditioneddelayed), the Company will will, and will cause each Company Subsidiary to to, (A) conduct its operations in the ordinary course of business substantially consistent with past practice (including with respect to underwriting matters, except that the Company and the Company Subsidiaries may make changes in underwriting matters or reduce prices in response to competitive activities by Parent or the Parent Subsidiaries or otherwise arising from announcement of the transactions contemplated hereby), (B) use its commercially reasonable efforts to maintain its relationships with officers, key employees and customers and to renew policies with current insureds and (iC) use its commercially reasonable efforts to preserve substantially intact its business organization and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees)goodwill. Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required expressly permitted or contemplated by any other provision of this Agreement or as required by applicable LawLaw or the regulations or requirements of the NYSE, the Company will shall not, and shall not and will cause each permit any Company Subsidiary not to (unless required by applicable Law)to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will shall not be unreasonably withheld, delayed withheld or conditioneddelayed):
(a) Section 5.1.1 amend the Company Charter its certificate of incorporation or Company Bylaws by-laws or equivalent organizational documents of any Company Subsidiary (other than routine amendments as necessary to the organizational documents make shares of any Company Subsidiary Common Stock eligible to participate in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respecta direct registration program);
Section 5.1.2 except as set forth on Section 5.1.2 of the Company Disclosure Schedule (bA) issue, deliver, sell, pledge, dispose of, grant, transfer or encumber, issue or authorize the issuance, sale, pledge, disposition, grant, transfer, or encumbrance of, issuance of any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, any such interest represented by Contract right), securities of the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards outstanding as of the date hereof in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares exercise of Company Preferred Stock Options outstanding on the date hereof or the settlement of any deferred stock awards outstanding on the date hereof or granted or sold in accordance with the Company Charter and Company Bylaws;
ordinary course of business pursuant to existing plans or (cB) sell, pledge, dispose of, transfer, lease, license license, guarantee or encumber any material property encumber, or assets of authorize the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license license, guarantee or encumbrance is individually not in excess of, any material property or assets of $10,000,000the Company or any Company Subsidiary, or except in the aggregate not in excess ordinary course of $20,000,000business substantially consistent with past practice;
(d) Section 5.1.3 declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between other than dividends paid by a wholly-owned Company Subsidiary to the Company and its Subsidiaries or between the to any other wholly-owned Company SubsidiariesSubsidiary) or or, subject to Section 5.6, enter into any agreement with respect to the voting of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)stock;
(e) Section 5.1.4 other than in the case of Company Subsidiaries and other than cashless exercises of Company Options or repurchases of Company Deferred Stock or Company Restricted Stock or in connection with investment management in the ordinary course of business, reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock stock, other Equity Interests or other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other Equity Interestssecurities;
(f) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, Section 5.1.5 acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stockstock or assets) any interest in any business, division, organization person or any Person (all or any material portion substantially all of the assets thereofof any person, other than in connection with investment management in the ordinary course of business;
Section 5.1.6 make any material change in accounting policies or procedures (including making any material change in actuarial policies or procedures or ceasing to use a third party consulting actuary), other than (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become responsible for the obligations of any Person for borrowed money, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business substantially consistent with past practice or except as required by GAAP, Statutory Accounting Practices, applicable Law or a Governmental Authority;
Section 5.1.7 (Bi) make, change or revoke any indebtedness for borrowed money material election in respect of Taxes, (ii) adopt or change any guarantee material accounting method in respect of Taxes, (iii) enter into any material Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement, (iv) settle or compromise any material claim, notice, audit report or assessment in respect of Taxes or (v) surrender any right to claim a material refund of Taxes;
Section 5.1.8 enter into, amend, renew or exercise any option to terminate or extend, in each case in any material respect, any material real estate lease (as lessor or lessee) other than as described on Section 5.1.8 of the Company Disclosure Schedule; enter into, amend or terminate, in each case in any material respect, any Company Material Contract to which it is a party or by or to which it or its assets, properties or business are bound or subject, except as otherwise permitted by this Section 5.1 or in the ordinary course of business substantially consistent with past practice (it being understood that correspondence regarding interpretation of such indebtedness) solely between contracts or claims handling activities by any party to such contracts in the ordinary course of business or the reservation of rights under such contracts do not constitute an amendment or termination for purposes of this Section 5.1.8); or enter into or amend any change in control or indemnification agreement with any director or officer of the Company and (other than a wholly owned Company Subsidiary new director appointed or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (ielected after the date hereof or a new hire under Section 5.1.16(C); except that any loan from the Company ) or any Company Subsidiary located in Material Contract pursuant to which it agrees to refrain from competing with any third party (other than confidentiality agreements or licenses of Intellectual Property);
Section 5.1.9 other than as required by any judgment, order or arbitral award, enter into any agreement relating to the United States commutation of any assumed reinsurance program or assumed reinsurance treaty existing on the date hereof, except for (i) individual commutations where the aggregate settlement amount (net of applicable recoverables from reinsurance) exceeds the related reserves held with respect to any Company Subsidiary located outside such program or treaty (net of applicable recoverables from reinsurance) as of June 30, 2007 by not more than $500,000 (other than with respect to the assumed reinsurance program identified on Section 5.1.9 of the United States Company Disclosure Schedule, which excess shall not be limited more than $1,500,000) and (ii) aggregate commutations where the aggregate settlement amount (net of applicable recoverables from reinsurance) exceeds the related reserves held with respect to such program or treaty (net of applicable recoverables from reinsurance) as of June 30, 2007 by not more than $10,000,000 5,000,000 in the aggregate;
(j) Section 5.1.10 renew its ceded reinsurance program other than in the ordinary course of business substantially consistent with past practice;
Section 5.1.11 make any loanscapital expenditures or commitment for any capital expenditures in excess of $500,000 in the aggregate (other than pursuant to budgeted amounts in the ordinary course of business);
Section 5.1.12 settle any Action or threatened Action, guarantees, advances or capital contributions to, or investments in, except in the ordinary course of business substantially consistent with past practice and except for any other Person such Actions that would not reasonably be expected to have a Company Material Adverse Effect;
Section 5.1.13 incur any material indebtedness for money borrowed in excess of $5,000,000 in the aggregate, except for borrowings under existing lines of credit and refinancings of existing indebtedness and existing lines of credit;
Section 5.1.14 enter into any material line of business other than (Aa) immaterial loans or advances providing medical malpractice insurance and related liability insurance products (including directors and officers liability insurance for healthcare entities, errors and omissions coverage for managed care organizations, billing errors and omissions coverage for the medical profession and professional excess liability insurance) to employees or independent contractors physicians, oral surgeons, healthcare facilities and others engaged in the ordinary course healthcare industry in Arizona, California and Delaware (hospital and dental liability insurance being specifically excluded from the permitted lines of business consistent with past practiceunder this Section 5.1.14(a)); and (b) other existing lines of business in run-off;
Section 5.1.15 make any material loan or advance to, (B) without prejudice to Section 5.1(i)guarantee any material indebtedness for money borrowed of, loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiariesotherwise incur such material indebtedness on behalf of, (C) without prejudice to Section 5.1(i)any third party, (i) as required pursuant to the terms in each case, except for obligations of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business substantially consistent with past practice;
(l) make or authorize any capital expenditure in excess of the Company’s capital expenditure budget set forth Section 5.1.16 except as described on Section 5.1(l) 5.1.16 of the Company Disclosure ScheduleSchedule (i) grant or pay any increase, other than capital expenditures that are notor announce or promise any increase, in the aggregatewages, in excess salaries, compensation, bonuses, incentives, severance, pension or other direct or indirect compensation or benefits payable to any of $5,000,000;
its employees, officers, directors, agents or consultants (m) except other than legal counsel, investment bankers, actuaries and accountants), including, without limitation, any increase or change pursuant to the extent required by (i) applicable Lawany Company Benefit Plan, or (ii) establish or increase or promise to increase any benefits under any Company Benefit Plan, in either case except (A) as required by the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement or (iv) contractual commitments with respect to severance or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any directorhereof, officer, employee or other service provider of the Company or any Company Subsidiary (exceptlaw, in the case of individuals who are not officers rule or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice)regulation, (B) grant any additional rights to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the involving ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business increases substantially consistent with past practice that involve only or (C) in connection with the payment hiring of monetary damages (net an individual to replace any existing executive officer of any payments or proceeds received through insurance or indemnity arrangements) the Company the base salary of whom is not in excess of $5,000,000 individually or $10,000,000 in 150% of the aggregate, base salary of the executive officer whom such individual replaces (and in any case without provided that the imposition Company shall be permitted to amend any existing Company Benefit Plans to bring them into compliance with or to secure an exemption from Section 409A of equitable relief on, or the admission of wrongdoing by, the Company, Code);
Section 5.1.17 fail to timely file any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) SEC Filing other than (i) make or change any material Tax electionreport filed after the applicable deadline in accordance with Rule 12b-25 of the Exchange Act, which has been filed within the time period prescribed by that rule; and (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxesany matter that is required to reported solely pursuant to Item 1.01, (v1.02, 2.03, 2.04, 2.05, 2.06, 4.02(a) settle or compromise any claim 5.02(e) of Form 8-K and which is reported in the next periodic report on Form 10-Q or assessment in respect of material Taxes, (vi) consent Form 10-K required to any extension or waiver of be filed after the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous event giving rise to the insured than requirement to report under such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applieditem; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) 5.1. 18 authorize or enter into any Contract agreement or otherwise make any commitment, in each case commitment to do any of the foregoing in clauses (a) through (v)foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7Time, except as set forth in Section 5.1 6.01 of the Company Disclosure ScheduleSchedule or as specifically required or permitted by this Agreement or required by Law, unless Parent shall otherwise consent thereto in writing, the Company shall, and shall cause each of its Subsidiaries to, conduct its operations only in the ordinary and usual course of business consistent with past practice and, to the extent consistent therewith, use its reasonable best efforts to preserve intact its business organizations and maintain its rights, franchises and existing goodwill and relations with customers, suppliers, creditors, lessors, lessees, employees and business associates. In addition, the Company shall not, and shall not permit its Subsidiaries to, take any action that the Company knows, at the time it prepares to take or takes such action, would (i) materially adversely affect or delay the ability of the Company or Parent to perform any of their respective material obligations in a timely basis under this Agreement or (ii) have or be reasonably expected to have a Company Material Adverse Effect. By way of amplification and not limitation, except as set forth in Section 6.01 of the Company Disclosure Schedule or as specifically required or permitted by any other provision of this Agreement or as required by applicable Law, unless Parent will otherwise agree in writing (which agreement will not be unreasonably withheld, delayed or conditioned), the Company will and will cause each Company Subsidiary to conduct its operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve substantially intact its business organization and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees). Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required by any other provision of this Agreement or as required by applicable Law, the Company will not and will cause each Company Subsidiary not to (unless required by applicable Law), between the date of this Agreement and the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, do, or agree to do, any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):Parent:
(a) amend the Company Charter or Company otherwise change its Articles of Incorporation or Bylaws or equivalent organizational documents of or take any Company Subsidiary action to exempt any Person (other than routine amendments to the organizational documents Parent or its Subsidiaries) or any action taken by any Person from any Takeover Statute or terminate, amend or waive any provisions of any Company Subsidiary confidentiality or standstill agreements in the ordinary course of business consistent place with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)third parties;
(b) issue, deliver, sell, pledge, dispose of, grant, transfer or encumbertransfer, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, transfer or encumbrance of, of any shares of capital stock or rights of, or other Equity Interests in, the Company or any Company Subsidiary of its Subsidiaries of any class, or securities convertible into, or exchangeable or exercisable for, for any shares of such capital stock or other Equity Interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securities, or any other ownership interest (including, without limitation, including any such interest represented by Contract contract right), of the Company or any Company Subsidiaryof its Subsidiaries, other than (ix) the issuance of Shares Company Common Stock upon the vesting, settlement exercise or the exercise conversion of Company Accelerated Equity Awards Stock Options outstanding as of the date hereof in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iiiy) the issuance of shares of Company Common Stock upon under the conversion Company Director Fee Plan or (z) the granting of options to purchase up to 50,000 shares of Company Preferred Common Stock in accordance the aggregate during 2006 in the ordinary course of business consistent with past practice to the individuals set forth on Section 6.01(b) of the Company Charter Disclosure Schedule and Company Bylawsonly after consultation with Parent;
(c) sell, pledge, dispose of, transfer, lease, license license, guarantee or encumber any material property encumber, or assets of authorize the Company or the Company Subsidiaries (other than non-exclusive grants of Intellectual Property Rights in the ordinary course of business) except pursuant to (i) any Company Material Contract in effect as of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license license, guarantee or encumbrance is individually of, any material property or assets of the Company or deposits of the Bank, except pursuant to existing Contracts or commitments or the sale or purchase of goods or the pledge of securities in the ordinary course of business consistent with past practice;
(d) other than (x) regular quarterly dividends on shares of Company Common Stock, at a rate not in excess of $10,000,0000.10 per share of Company Common Stock during 2006 and $0.11 per share of Company Common Stock during 2007, in each case with the record dates and payment dates set forth on Section 6.01(d) of the Company Disclosure Schedules, (y) dividends or in distributions on the aggregate not in excess Company’s outstanding debentures and related trust preferred securities and (z) payment of $20,000,000;
(d) dividends by a Subsidiary of the Company to the Company, declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries) or enter into any agreement with respect to its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries)stock;
(e) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or stock, other Equity Interests, or authorize or propose the issuance of any other securities in respect of, in lieu or any securities or obligations convertible into (whether currently convertible or only convertible after the passage of time or in substitution the occurrence of certain events) or exchangeable for any shares of its capital stock or other Equity Interests;
(f) merge or consolidate with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization or file a petition in bankruptcy or consent to the filing of any bankruptcy petition under any applicable Law;
(g) directly or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stock) any interest in any business, division, organization or any Person (or any material portion of the assets thereof), other than (i) as required the repurchase of shares of Company Common Stock following termination of employment with, or provision of services to, the Company or any Subsidiary, pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000Stock Option;
(hf) enter into acquire, directly or indirectly (whether by merger or consolidation, acquisition of stock or assets or by formation of a joint venture or otherwise), any new line of business that is material to the Companyor any Person or division thereof or any interest therein;
(ig) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become responsible for the obligations of any Person for borrowed money, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, in effect as of the date of this Agreement and which loan, guarantee, advance or capital contribution is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000 and (D) extended payment terms for customers in the ordinary course of business consistent with past practice;
(k) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case other than in the ordinary course of business consistent with past practice, incur any indebtedness for borrowed money or issue any debt securities or trust preferred securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person (other than a wholly owned Subsidiary of the Company) for borrowed money (it being understood and agreed that the creation of deposits, federal funds borrowings, federal home loan bank borrowings, sales of certificates of deposit and entering into repurchase agreements shall be considered to be in the ordinary course of business consistent with past practice);
(h) other than in the ordinary course of business consistent with past practice, make any loan, loan commitment or capital contribution to, or investment in, or renewal or extension thereof, to any Person;
(i) restructure or materially change its investment securities portfolio or its gap position, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported;
(j) except as required by applicable Law, (i) implement or adopt any material change in its Policies, Practices and Procedures; (ii) fail to follow in any material respect its existing Policies, Practices and Procedures with respect to managing its exposure to interest rate and other risk; or (iii) fail to use commercially reasonable means to avoid any material increase in its aggregate exposure to interest rate risk;
(k) take any action or omit to take any action that may result, individually or in the aggregate with any other actions or omissions, in a material violation of the Bank Secrecy Act, the anti-money laundering Laws or the policies and procedures of the Company or any of its Subsidiaries with respect to the foregoing;
(l) make terminate, cancel or authorize request any capital expenditure in excess change in, or agree to any change in, or enter into any contract or agreement that calls for aggregate annual payments of the Company’s capital expenditure budget set forth on Section 5.1(l$75,000 or more and which is not terminable at will or with thirty (30) days or less notice without payment of the Company Disclosure Schedulea premium or penalty, other than capital expenditures that are not, loans and loan participations in the aggregate, in excess ordinary course of $5,000,000business and consistent with past practice;
(m) except to the extent required by (i) applicable Lawenter into, (ii) the existing terms renew or allow to renew automatically, make any new grants of awards under, amend or otherwise modify any Company Benefit Planemployment, Foreign Benefit Plan consulting, transition, stock option or Company CBAother equity based, (iii) this Agreement or (iv) contractual commitments with respect to change in control, retention, bonus, termination, severance or termination pay in existence on the date of this Agreement: (A) similar agreements or arrangements or increase the compensation or benefits payable or to become payable to any directorits directors, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, for employees other than (x) regular annual increases in connection with promotions or periodic reviews compensation in the ordinary course of business and consistent with past practice)practice in an aggregate amount not exceeding 3.5% of the aggregate annual base salary compensation that is currently payable to all employees as a group and (y) additional retention payments, bonuses or other additional compensation consistent with past practice and in an aggregate amount not exceeding 1.5% of the aggregate annual base salary compensation currently payable to all employees as a group, with at least five (B5) grant Business Days’ prior notice to Parent; (ii) except to the extent permitted under Section 6.01(m)(i)(y) above, increase any additional rights to retention, change in control, bonus, stock option or other equity based, severance or termination pay or benefits to, or enter into any new retention, change in control, bonus, stock option or other equity based, employment or severance agreement with, any director, officer employee or other service provider employee of the Company or any Company Subsidiary (exceptof its Subsidiaries, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, compensation, stock option or other equity based, pension, retirement, deferred compensation, termination employment, termination, severance or severance other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officerofficer or employee, except to the extent required to comply with applicable Law or this Agreement, including Section 409A of the Code; or (iii) take any affirmative action to amend or waive any performance criteria to vesting which are unrelated to service or otherwise accelerate vesting, exercisability, or funding under any Company Benefit Plan, other than to the extent required to comply with applicable Law, including compliance with Section 409A of the Code or as expressly permitted by this Agreement;
(n) hire any new employee or other service provider of the Company or any Company Subsidiary of its Subsidiaries at an annual compensation rate in excess of customary practice or, in any event, in excess of $100,000 per annum;
(excepto) accelerate the payment of any material liabilities or obligations (absolute, (x) in the case of group health accrued, contingent or medical coverage subject to annual review otherwise), except in the ordinary course of business consistent with past practice;
(p) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan subject to Section 302 or Title IV of ERISA or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, actions except as may be required by GAAP, ERISA or the express terms of any such plan;
(q) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(r) make any material change in tax or financial accounting policies, principles or procedures, except as required by GAAP or by a Governmental Entity;
(s) commence, waive, release, assign, settle or compromise any material claims, or any material litigation or arbitration for an amount in excess of $50,000 individually or $100,000 in the aggregate or which would impose any material restriction on the business of the Company or Parent or any of their Subsidiaries or would reasonably be expected to create precedent for claims that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable are reasonably likely to be material to the employee Company or Parent or any of their Subsidiaries; (t) make any material tax election, settle or compromise any material liability for Taxes, amend any Tax Return or file any refund for Taxes, other than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not or as may be required by a Governmental Entity, or fail to make any material Tax Return filing due prior to the Company and the Company Subsidiaries, taken as a whole, and (z) for awards in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements Closing in the ordinary course of business and consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agentspractice;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, in each case to do any of the foregoing in clauses (a) through (v).
Appears in 1 contract
Conduct of Business by the Company Pending the Closing. The During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Closing (should there be any time between the effective date of this Agreement and the Closing), the Company Shareholder and the Company covenants and agrees that, between unless Parent shall otherwise agree in writing, the Company shall and the Company Shareholder shall cause the Company to
(i) conduct its business only in, and shall not take any action except in, the Ordinary Course of Business and in a manner consistent with past practice,
(ii) use reasonable commercial efforts to preserve substantially intact the business organization of the Company,
(iii) keep available the services of the present officers, employees, agents and consultants of the Company and
(iv) preserve the present relationships of the Company with customers, suppliers and other Persons with which the Company has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, the Company shall not and the Company Shareholder shall cause the Company not, during the period from the date of this Agreement and continuing until the earlier of the Effective Time and the termination of this Agreement in accordance with Article 7, except as set forth in Section 5.1 of or the Company Disclosure Schedule, as required by any other provision of this Agreement or as required by applicable Law, unless Parent will otherwise agree in writing (which agreement will not be unreasonably withheld, delayed or conditioned), the Company will and will cause each Company Subsidiary to conduct its operations in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (i) preserve substantially intact its business organization and (ii) maintain and preserve its assets, properties and positive material business relationships (including employees). Without limiting the foregoing, and as an extension thereof, except as set forth in Section 5.1 of the Company Disclosure Schedule, as required by any other provision of this Agreement or as required by applicable Law, the Company will not and will cause each Company Subsidiary not to (unless required by applicable Law), between the date of this Agreement and the Effective TimeClosing, directly or indirectly, indirectly do, or agree propose to do, any of the following without the prior written consent of Parent (which consent will not be unreasonably withheld, delayed or conditioned):Parent:
(a) amend or otherwise change the Company Charter Company’s Articles of Incorporation or Company Bylaws or equivalent documents of any Company Subsidiary (other than routine amendments to the organizational documents of any Company Subsidiary in the ordinary course of business consistent with past practice which are not reasonably likely to result in any adverse impact to Parent in any material respect)Bylaws;
(b) issue, deliver, sell, pledge, dispose of, grant, transfer of or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, disposition or encumbrance of, any shares of capital stock of, or other Equity Interests in, the Company or any Company Subsidiary of any class, or securities convertible into, or exchangeable or exercisable for, any shares of such capital stock or other Equity Interests, or any options, warrants warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock or other Equity Interests or such convertible or exchangeable securitiesstock, or any other ownership interest (including, without limitation, any such interest represented by Contract right), of phantom interest) in the Company or any Company Subsidiary, other than (i) the issuance of Shares upon the vesting, settlement or the exercise of Company Accelerated Equity Awards outstanding as of the date hereof in accordance with their terms, (ii) transactions between the Company and a wholly-owned Company Subsidiary or between wholly-owned Company Subsidiaries or (iii) the issuance of shares of Company Common Stock upon the conversion of shares of Company Preferred Stock in accordance with the Company Charter and Company Bylawsits Affiliates;
(c) sell, pledge, dispose of, transfer, lease, license lease to others or encumber otherwise dispose of or subject to any encumbrance any material property assets or assets properties of the Company or the Company Subsidiaries purchase, lease from others or otherwise acquire any material assets or properties (other than non-exclusive grants except for (I) purchases or sales of Intellectual Property Rights assets in the ordinary course Ordinary Course of businessBusiness and in a manner consistent with past practice, (II) except pursuant to dispositions of obsolete or worthless assets, and (iIII) any Company Material Contract in effect as purchases or sales of the date of this Agreement or (ii) any non-Company Material Contract, in effect as of the date of this Agreement and which sale, pledge, disposition, transfer, lease, license or encumbrance is individually immaterial assets not in excess of $10,000,000, or in the aggregate not in excess of $20,000,00020,000);
(d) (I) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, stock or property or a any combination thereof) with in respect to of any of its capital stock, (II) split, combine or reclassify any of its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries) or enter into any agreement with respect to its capital stock or Equity Interests (except as between the Company and its Subsidiaries or between the Company Subsidiaries);
(e) reclassify, adjust, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other Equity Interests, issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (III) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any Person to purchase, repurchase, redeem or otherwise acquire, any of its securities, including shares of Company Common Stock [or Preferred Stock] or any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock[ or Preferred Stock];
(e) (I) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other Equity Interestsbusiness organization or division thereof; (II) incur any indebtedness for borrowed money, except for borrowings and reborrowing under the Company’s existing credit facilities or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any Person, or make any loans or advances, except in the Ordinary Course of Business consistent with past practice; (III) authorize any capital expenditures or purchases of fixed assets which are, in the aggregate, in excess of the amount set forth in Section 4.1 of the Company Disclosure Schedule for the Company; or (IV) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by subparagraph (e) of this Section 4.1;
(f) merge or consolidate with make any Person or adopt a plan change in the rate of complete or partial liquidation or resolutions providing for a complete or partial liquidationcompensation, dissolutioncommission, consolidation, restructuring, recapitalization bonus or other reorganization remuneration payable, or file a petition in bankruptcy pay or consent agree or promise to the filing of pay, conditionally or otherwise, any bankruptcy petition under bonus, extra compensation, pension or severance or vacation pay, to any applicable Law;
(g) directly director, officer, employee, salesman or indirectly, acquire (including, without limitation, by merger, consolidation, acquisition of assets or acquisition of stock) any interest in any business, division, organization or any Person (or any material portion agent of the assets thereof), other than (i) as required Company except in the Ordinary Course of Business consistent with prior practice and pursuant to the terms or in accordance with plans disclosed in Section 2.14.2 of any existing Company Material Contract to which the Company or any Company Subsidiary is a party or (ii) as required pursuant to the terms of any existing non-Company Material Contract, and which acquisition is individually not in excess of $10,000,000, or in the aggregate not in excess of $20,000,000;
(h) enter into any new line of business Disclosure Schedule that is material to the Company;
(i) directly or indirectly, incur, assume or guarantee any indebtedness for borrowed money or issue or sell any debt securities (or rights to acquire debt securities) or assume, guarantee or endorse, or otherwise become responsible for the obligations of any Person for borrowed money, in each case other than (A) any indebtedness for borrowed money incurred by the Company or any Company Subsidiary pursuant to the Existing Credit Facilities in the ordinary course of business consistent with past practice or (B) any indebtedness for borrowed money (or any guarantee of such indebtedness) solely between the Company and a wholly owned Company Subsidiary or between wholly owned Company Subsidiaries which indebtedness is incurred in compliance with this clause (i); except that any loan from the Company or any Company Subsidiary located in the United States to any Company Subsidiary located outside of the United States shall be limited to $10,000,000 in the aggregate;
(j) make any loans, guarantees, advances or capital contributions to, or investments in, any other Person in excess of $5,000,000 in the aggregate, other than (A) immaterial loans or advances to employees or independent contractors in the ordinary course of business consistent with past practice, (B) without prejudice to Section 5.1(i), loans solely between the Company and its wholly-owned Subsidiaries or between the Company’s wholly-owned Subsidiaries, (C) without prejudice to Section 5.1(i), (i) as required pursuant to the terms of any existing Company Material Contract to which the Company or any Company Subsidiary is a party (or any Company Material Contract entered into after the date of this Agreement by the Company or any Company Subsidiary in compliance with the terms of this Agreement) or (ii) as required pursuant to the terms of any existing non-Company Material Contract, were in effect as of the date of this Agreement and which loanor make any increase in or commitment to increase any employee benefits, guaranteeadopt or make any commitment to adopt any additional employee benefit plan or make any contribution, advance other than regularly scheduled contributions, to any Employee Benefit Plan;
(g) take any action to change accounting practices, policies or capital contribution is individually not in excess procedures (including procedures with respect to revenue recognition, payments of $10,000,000accounts payable or collection of accounts receivable);
(h) make any material tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability or agree to an extension of a statute of limitations, except to the extent the amount of any such settlement has been reserved for in the aggregate not in excess of $20,000,000 and Company Financial Statements;
(Di) extended payment terms for customers pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction when due, in the ordinary course Ordinary Course of business Business and consistent with past practice of liabilities reflected or reserved against in the Company Financial Statements or incurred after the Company Balance Sheet Date in the Ordinary Course of Business and consistent with past practice;
(kj) terminate, cancel, modify or amend any Company Material Contract, or cancel, modify, amend, release, assign or waive any rights or claims under any Company Material Contract, or enter into any transaction, contract or amend any Contract that, if existing on the date hereof, would be a Company Material Contract, in each case commitment other than in the ordinary course Ordinary Course of business consistent with past practice;Business; or
(lk) make take, or authorize agree in writing or otherwise to take, any capital expenditure in excess of the Company’s capital expenditure budget set forth on Section 5.1(lactions described in Sections 4.1(a) through (j) above, or any action which would make any of the representations or warranties of the Company Disclosure Schedule, other than capital expenditures that are not, contained in the aggregate, in excess of $5,000,000;
(m) except to the extent required by (i) applicable Law, (ii) the existing terms of any Company Benefit Plan, Foreign Benefit Plan or Company CBA, (iii) this Agreement untrue or (iv) contractual commitments with respect to severance incorrect or termination pay in existence on the date of this Agreement: (A) increase the compensation or benefits payable or to become payable to any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, for increases in connection with promotions or periodic reviews in the ordinary course of business consistent with past practice), (B) grant any additional rights to severance or termination pay to, or enter into any severance agreement with, any director, officer employee or other service provider of the Company or any Company Subsidiary (except, in the case of individuals who are not officers or directors, such grants for severance or termination pay to a new hire employee or in connection with promotions in the ordinary course of business consistent with past practice), (C) or establish, adopt, enter into or amend any collective bargaining, welfare, fringe benefit, incentive compensation, equity compensation, bonus, profit sharing, thrift, pension, retirement, deferred compensation, termination or severance plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer, employee or other service provider of the Company or any Company Subsidiary (except, (x) in the case of group health or medical coverage subject to annual review in the ordinary course of business consistent with past practice, actions that would not increase the cost of such group health or medical coverage plan by more than 5% or result in an employer/employee cost sharing arrangement that is more favorable to the employee than is the case as of the date hereof, (y) in the case of collective bargaining agreements, amendments in the ordinary course of business that are not material to prevent the Company and the Company Subsidiaries, taken as a whole, Shareholder from performing or cause the Company or the Company Shareholder not to perform its covenants and (z) for awards agreements in cash in lieu of (A) stock option awards or cash incentives that, but for this Agreement, would otherwise be granted to newly hired employees and (B) restricted stock unit awards or cash incentives that, but for this Agreement, would otherwise be granted to employees who are not officers in accordance with Company policies and practices for purposes of retention with a payout period of no more than one (1) year, with an aggregate cash award amount under sub clauses (A) and (B) of no more than $1,000,000), (D) terminate any Company Benefit Plan or Foreign Benefit Plan (except as contemplated by this Agreement);
(n) hire or appoint any Company executive officer (as defined by Rule 3b-7 promulgated under the Exchange Act) or director;
(o) forgive any loans to Service Providers or any of their respective affiliates;
(p) make any change in accounting policies, practices, principles, methods or procedures or payment or collection of accounts, other than as required by GAAP or by applicable Law;
(q) waive, release, assign, commence, compromise, settle or agree to settle any Proceeding (including any Proceeding relating to this Agreement or the transactions contemplated hereby) other than compromises, settlements or agreements in the ordinary course of business consistent with past practice that involve only the payment of monetary damages (net of any payments or proceeds received through insurance or indemnity arrangements) not in excess of $5,000,000 individually or $10,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company, any Company Subsidiary or any of their respective directors, officers, employees or agents;
(r) (i) make or change any material Tax election, (ii) adopt or change any material Tax accounting method, (iii) file any material amendment to a Tax Return, (iv) enter into any closing agreement with a Governmental Entity with respect to Taxes, (v) settle or compromise any claim or assessment in respect of material Taxes, (vi) consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes, or (vii) enter into any material Tax sharing or similar agreement;
(s) terminate or modify in any material respect any Insurance Policy, or fail to maintain any Insurance Policy with at least substantially the same coverage and on terms and conditions not less advantageous to the insured than such existing Insurance Policy;
(t) write up, write down or write off the book value of any tangible assets, in the aggregate, in excess of $5,000,000, except for depreciation and amortization in accordance with GAAP consistently applied; or
(u) engage in any transactions, arrangements or understandings with any Affiliate or other Person that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;
(v) enter into any contract, make any commitment or take any action that requires consent of Apollo Global Management, LLC or any of its affiliates pursuant to Section 3.2(g) of the Preferred Certificate of Designation;
(w) authorize or enter into any Contract or otherwise make any commitment, in each case to do any of the foregoing in clauses (a) through (v).
Appears in 1 contract